The path to financial health
People around the world are continually aiming to improve their financial lives – they do so with whatever tools are available, whether formal or informal, and with whatever knowledge they have gathered. Every day, people work hard to grow their businesses, send their children to school, save, make ends meet, and troubleshoot during tough moments. Ultimately, they aspire for greater financial health and a better life for themselves and their families.
The Financial Health Network, the Center for Financial Inclusion at Accion and Dalberg’s Design Impact Group developed a framework of six indicators for financial health in the developing world.
In order to help consumers improve their financial health, financial service providers (FSPs) can design products, tools and services that empower consumers to better understand and manage their finances and encourage them to improve financial habits. Focusing on financial health also has the potential to impact the FSP’s bottom-line: Gallup found that when customers feel that their bank looks out for their financial well-being, they are much more likely to be fully engaged with the bank.
However, in order for FSPs to successfully promote financial health, they first need to understand customers’ opportunities and obstacles to improving it.