How Financial Providers Can Help Ease Rising Consumer Money Stress

Recent world events combined with stubborn inflation have heavily impacted consumer finances, leading to increased stress around money. CNBC’s latest Financial Confidence survey shows 70% of Americans are feeling financially stressed and 58% are living paycheck to paycheck. According to the survey, "nearly 60% of respondents cited inflation as the main contributor to their financial stress, followed by economy-wide instability (43%), rising interest rates (36%) and a lack of savings (35%).”

Our own research has continually shown money as one of the leading causes of stress and anxiety. And, how consumers handle financial stress varies. For younger generations, many may be choosing to ignore the problem as their financial health worsens. Credit Karma found that the average credit card debt for Millennials increased 29% and shot up 40% for Gen Z from this time last year.  

Financial providers can play a crucial role in helping consumers navigate financial concerns and stress. Central to the conversation should be building trust with consumers — keeping their money and personal financial data safe, providing solutions and services to help them meet their financial goals, and ensuring transparent, permission-based data sharing. 

Be proactive. An ever-growing number of consumers, especially in younger generations, now expect financial service providers to proactively reach out with actionable insights to guide them toward achieving their financial goals. Rather than watching and waiting for customers to learn from their money mistakes, financial institutions and fintechs should offer guidance around saving, investing, and managing debt.

Prove you understand them. In today’s hyper-connected digital world, it can feel like we’re constantly sharing our data with businesses. As a result, consumers now expect their data to be used to their advantage. Businesses can demonstrate they know and understand their customers by offering personalized experiences informed by their financial behavior data.

Put them in control of their data. Businesses should ensure consumers have visibility and control over who has access to their financial data and how it is being used. In fact, consumers overwhelmingly agree (89%) that they own their financial data and should be able to control who has access to it. With secure access to their own financial data, consumers can make more informed decisions about their own finances.