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CFPB Financial Well-Being Report Underscores Industry Opportunity

Earlier this week, the CFPB released its first national survey on the financial well-being of U.S. consumers and a tool to help consumers see how they stack up. More than 40 percent of U.S. adults struggle to make ends meet, according to the survey.

The survey created financial well-being scores (1-100) for respondents based on a 10-question scale. The average consumer score was 54. What’s more, 34 percent of all consumers surveyed reported experiencing material hardships in the past year. Examples of material hardships include running out of food, not being able to afford a place to live, or lacking the money to seek medical treatment.

That’s not really surprising given other recent research, according to the Network Branded Prepaid Card Association’s Chief Operating Officer Ben Jackson. But, he says, it does present an opportunity for the financial services industry, including prepaid providers.

“The fundamental takeaway from this report—and it’s easy to forget if you haven’t lived that kind of life, or haven’t lived it in a long time, is how difficult it can be,” Jackson says of living paycheck to paycheck or with volatile income. “Thinking about what kinds of needs your customers may have and paying attention to where you might be able to help them is a big opportunity in a lot of ways,” he says pointing to credit, savings and budgeting tools.

Education, income and employment status all appear to have a strong relationship with financial well-being, the CFPB notes. The survey also showed that financial well-being is higher for older adults, especially those age 65 and older, whose average score was 61. Younger adults, those 34 and younger, tended to have the lowest financial well-being score with an average of 51.

“There’s no problem that can’t be solved,” Jackson adds. “It’s just that getting the right products to the right people when they need them can be a challenge. Some of it is a marketing or distribution challenge, but some of it is a regulatory challenge. … The technology and tools exist, but the regulation or the business case doesn’t always allow for it. Still, there’s an opportunity for the industry to figure out ways to deliver more value to customers.”


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