introduction to cfsi and financial health · the center for financial services innovation is an...

MEMBERSHIP | CONSULTING | RESEARCH | INNOVATION

Leading the Nation in Consumer Financial Health

Introduction to CFSI and Financial HealthOctober 2018

©2016 Center for Financial Services Innovation. All rights reserved

About CFSI

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The Center for Financial Services Innovation is an authority on consumer financial health, leading a network of financial services innovators committed to building better consumer products and practices.

InformWe provide deep consumer insights and industry research.

InnovateWe seed and test promising new ideas.

AdviseWe offer consulting services to both

for-profit and nonprofit providers.

ConnectWe foster dialogue and collaboration through CFSI events and networking opportunities.

CFSI

What is financial health and how financially healthy are people in the United States?


Financial Health

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Day-to-DayManagement Resilience Opportunity

Financial health comes about when your daily systems help you build resilience and pursue opportunities.

Are you prepared for the unexpected?

Are you able to pursue your financial aspirations?

Do your financial products support resilience and opportunity?


The State of Financial Health in the U.S.

� 2014 nationwide, representative online survey

� Financial behaviors, product use, demographics

� Financial health segmentation

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Healthy Coping Vulnerable

Thriving 12%

29M adults

Focused 15%

36M adults

Stable 16%

39M adults

Striving16%

39M adults

Tenuous12%

29M adults

Unengaged16%

39M adults

At Risk12%

29M adults

28% Vulnerable68M Adults

28% Coping68M Adults

43% Healthy104M Adults


Income & Financial Health

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Healthy Not Healthy

More than 1/3 of those in the healthy segments have annual income under $60,000

More than 1/3 of those in the unhealthy segments have annual income over $60,000


Planning, Saving & Financial Health

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* These findings emerged from a regression analysis that looked at impact on financial health segment when controlling for behavioral and demographic variables.

Households that plan ahead to make sure they have the money to pay for large irregular expenses

10x more likely to be in a Healthy segment than those who cannot or do not

Those whose primary time frame for saving for the future is 5 years or more

8x more likely to be in a Healthy segment than those whose primary time frame is less than 5 years

Those with a planned saving habit 4x more likely to be in a Healthy segment than those who do not

Households with annual income at or over $100k

1.4x more likely than those < $30k

How are we going to improve the financial health of people struggling with it?


Applying Financial Health Insights

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Financial Health Measurement

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Measuring member financial health metrics alongside business metrics will enable credit unions to understand whether they are making a quantifiable difference in their members’ financial lives.

You can't manage what you can't measure.

If you can't measure it, you can't improve it.

For more detail, see: Eight Ways to Measure Financial Health

You are financially healthy when you…

SPEND

1. Spend less than income

2. Pay bills on time and in full

SAVE

3. Have sufficient liquid savings

4. Have sufficient long-term savings or assets

BORROW

5. Have a sustainable debt load

6. Have a prime credit score

PLAN

7. Have appropriate insurance

8. Plan ahead for expenses


CFSI Financial Health Score™

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� Provides a holistic, moment-in-time snapshot of an individual’s or group of customers’ financial health.

� Based on eight multiple choice questions that align with CFSI’s indicators of financial health.

� Provides one CFSI Financial Health Score™ and four sub-scores.

� The score is designed to be simple, straightforward, and easy-to-use; a starting point to measure and improve your customers’ financial health.

Spend76

Spend76

Save62

Save62

Borrow71

Borrow71

Plan63

Plan63

Fin Health Score68

Fin Health Score68


2018 Financial Health Leaders

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Members on the forefront of financial health measurement.


The Future of Financial Health Measurement

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Survey Data

TransactionalData

Executional simplicity��

Holistic view of customers’ situation��

Objectivity of data��

Ability to update frequently to track progress��

Ability to measure all customers��

Chicago New York San Francisco Washington, D.C.

Connect with us

cfsinnovation.com YouTube@cfsinnovation #finhealth LinkedIn Facebook

Thank You!

Darren Easton, Senior Director, [email protected]

introduction to cfsi and financial health · the center for financial services innovation is an...

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