The ongoing Covid-19 pandemic is still affecting the global economy. Through lockdowns and other restrictions, financial uncertainty is at an all-time high.
Rochelle Gorey is the CEO and Co-Founder of SpringFour, a Certified B Corporation and social impact fintech company located in Chicago. Here Rochelle shares her thoughts on how banks and fintechs need to work together to remedy financial wellness amid Covid-19
Communities around the world continue to feel the aftershocks of the coronavirus pandemic that ravaged the global economy almost a year ago. Businesses have shuttered their doors, pandemic-related stress has soared, debt continues to multiply, and countless families have been left counting the tangible costs.
In the United States, no one has remained untouched – and for lower-to-middle income households, deep financial hardship persists. For many, the uncertainty of the future remains a pressing concern.
Now, more than ever, financial services organizations and fintechs must band together to help those in need. Through proactive partnerships, they can introduce more comprehensive solutions – that go beyond offering credit products – and amplify their impact to help struggling clients get back on their feet.
When national relief measures barely scratch the surface
While the extension of rent forgiveness programs and unemployment benefits has provided a much-needed lifeline, current relief measures are far from a cure-all. Even with two rounds of stimulus payments behind us and a third in the works, the federal response has been tame amidst the rumble of the fallout.
In a survey conducted last summer, 48% of respondents stated that they need over $4,000 in emergency funds to feel secure, and two-thirds expressed concern over setting aside emergency funds. More than half of those surveyed questioned their ability to afford essentials like food and healthcare.
Research from the Pew Research Center corroborates these findings, indicating that 46% of lower-income adults have struggled to pay their bills, while nearly a third have struggled to cover rent or mortgage payments. Additionally, about one in six adults have borrowed money from friends or family or turned to a food bank for assistance.
In the wake of this reality, lower-to-middle income households need a much wider safety net — one that will help them cushion the impact of the pandemic.
Thousands of additional resources exist at the local level. Unfortunately, many households are unaware that local government and nonprofit resources are available to them. Concerns over food security, healthcare access, and unemployment support continue to rank high, as do concerns over finding affordable child or elder care, paying utility bills, and filing taxes. Questions about where, and how, to get help deserve answers. But a staggering majority of households don’t have the information they need to fill in the blanks – and they run the risk of seeking help from unscrupulous actors and falling prey to scams.
Joining forces for a stronger financial future
A striking 83% of lower-to-middle income households look to and trust their banks as a source of financial guidance, support, and resources. This figure is encouraging, and it is also a call for financial institutions to consider customers’ unique circumstances and to tailor solutions accordingly. With the right support, banks have the means to wholly empower clients to address their financial challenges, seek help, and find ways to reduce their household expenses.
Leveraging the expertise of fintechs is a key step to improving the financial future of individuals and businesses alike. Digital solutions from reputable fintechs enable banks and their customer service agents to integrate curated and vetted financial assistance resources into their service offerings – and to offer digital self-service options for customers, too. Not only does this put financial resources into their customers’ hands, but it also helps customer service agents feel more positive about their ability to support their clients. For banks, the implications of partnering with fintechs — increased job satisfaction, decreased turnover, better customer engagement and satisfaction, and a healthy bottom line — are worth considering.
By combining their strengths, banks and fintechs gain the power to amplify and accelerate aid to those in need, helping clients repay loans, make payments, reduce expenses, and regain their footing faster. For families struggling to keep up, knowing that relief is within reach is just enough to keep them afloat.
The post Banks & Fintechs Must Work Together To Remedy Financial Wellness Amid COVID-19 appeared first on The Fintech Times.