Banking on Digital Growth
Banking on Digital Growth

Episode · 8 months ago

137) #ExponentialInsights: Financial Literacy: All It Takes Are the Right Stories


Biology explains why kids trust their parents, but why their teachers?

Education — that’s the key to building trust.

Financial brands who get that will thrive and may just fix our culture’s financial literacy problems in the process.

That’s what Arindam Nag, Chief Executive Officer at CentSai, is banking on. At CentSai, he’s telling the right stories to help build financial literacy — and he was gracious enough to share them in today’s episode.

We discuss:

- The issues with financial literacy

- Why smart money management doesn’t take a career in Wall Street to learn

- Why education (and the trust it builds) will shape the future of finance

You can find this interview and many more by subscribing to Banking on Digital Growth on Apple Podcasts, on Spotify, or here.

Listening on a desktop & can’t see the links? Just search for Banking on Digital Growth in your favorite podcast player.

...if the bank plays the role of an educator and money and finance, it will be able to build trust. If you build trust among your members and customers you can retain them, they will be with you, they will refer you, they will encourage other people to join your bank. Mhm mm. You're listening to banking on digital growth with James Robert lay a podcast that empowers financial brand marketing, sales and leadership teams to maximize their digital growth potential by generating 10 times more loans and deposits. Today's episode is part of the exponential insight series where James robert interviews the industry's top marketing sales and fintech leaders, sharing practical wisdom to exponentially elevate you and your team. Let's get into the show greetings and hello I am James robert ley and welcome to episode 1 37 of the banking on digital growth podcast. Today's episode is part of the exponential insight series and I'm excited to welcome our and damn nag to the show are and um is helping financial services industry embraced financial literacy as part of the overall customer engagement because he's the chief executive and co founder of Sense eight dot com. Now I'm a big believer in empowering and elevating others through education. In fact, education is a core part of our business model here at the digital Growth Institute and there's really no bigger, no more important topic when it comes to education than to provide education for consumers around money. That's because money, it impacts all parts of our life, it impacts our health, it impacts our wealth, it impacts our happiness, our relationships and I believe that when you can transform someone's wallet, you really can truly begin to transform their entire life in all of these different areas And more often than not, that transformation must begin with training. It must begin with education to help the unaware become aware of what the possibilities of an even bigger, better, brighter future look like. So with that welcome to the show are and I'm looking forward to our conversation today. Thank you very much. It's a real pleasure to be on your podcast before we get into talking financial literacy, financial education, financial wellness, financial empowerment. I always like to start off on a positive note what has been good for you personally, professionally? It's always your pick. Oh my goodness. Well, I think number one I personally survived Covid. Uh I probably had one of the worst experiences and when my family members, my whole family was done with Covid but I was in bed literally, I was literally running the company horizontally for almost six weeks, March in april, I was in the hospital twice, so I'm glad, I'm...

...grateful that I'm sitting here talking to you upright. I can do all the normal things right now. But again, if I may take the opportunity, Covid Israel, those, a few are still not vaccinated, please get vaccinated. Covid. Israel is painful. On the professional front. I would say that we launched two products, one for the school kids and one for financial services sector Exactly 11 months ago and we didn't realize despite the Covid that we will actually come through and be where we are today, that we have paid clients, people are using us. People like Pat is getting a good response to the marketplace. So overall, I would say while in many We did have challenges, but I'm grateful for the last 11, 12 months. Yes. And I think it's always looking for the positive and you know, it's so funny. You mentioned your, your Covid experience, my family. We came down with Covid and and I will tell you, I was sitting there And probably had like 102° fever and just feeling really, really horrible. But I kept thinking this is just a moment in time. I've got so many more things that I want to accomplish, so many more people that I want to help. So I didn't get trapped in that present moment. I was really living in my mind in the future of all the other things. Even this conversation, right? It's just I enjoy doing this podcast and learning from from, from people like, like yourself and, and I want to talk about like getting up to this point in just your own personal journey, what's what's the inspiration? What's the purpose behind launching this because it's important work. It's meaningful work, can you provide some perspective of of just the whole purpose that you're working towards here. Sure. I think I would say It goes back to two seminal events in my life. One was as a 17 year old when I was growing up in Calcutta, I had the privilege and the honor for spending some time at mother Teresa's missionaries of charity and it was voluntary work just like you know, most many of my classmates did it. I did it too. I just spent a little bit more time there and I saw many people fall off the wagon. They were I saw poverty. I saw people who had a lot in their lives earlier, but for whatever reason could be famine could be bad decisions, addiction. They were homeless and they were dying almost dying of hunger. So I instantly knew the value of respecting money, respecting wealth. But fast forward as I grew in my financial journalism Korea, writing about people, talking about people understanding economics and how countries and nations and how the policies interacted with each other along with the corporate world, I realized that a lot of financial decisions were taken by companies and policymakers that impacted data their lives of normal people. But when it came to financial literacy, the normal people were waved...

...behind and I saw that firsthand when as a writer for Dow jones and Wall Street Journal in 2000 and 7 2000 and eight, I was covering the credit crisis and I realized that while it was very fashionable to blame Wall Street, but the real problem was lack of financial literacy and it was a systemic problem and that's what triggered the thought that I would I do want to do something. Yeah. And it's it's easy, it's easy to blame others. I think that once again we're going to talk about transformation once we take responsibility for ourselves, our and and and money money runs deep right? Like it comes back to family of origin, it comes back to environment. It comes back to the beliefs and the relationships that we have. You talked about the the challenges, the systemic challenges and they do run deep where in your mind are those challenges rooted first and foremost. So I think number one is h word hyperbole. So, and I see it repeating time and again. I mean it was today we're talking about crypto. People are saying, oh Kryptos hot, A lot of people are making money in crypto. I should also jump into the fray a year ago. I remember around this time we had this very unfortunate incident where a young 19 or 20 year old took his own life because he was trading on Robin Hood, public peers were doing, but he did not know anything about how the options market worked. So then if I go backwards, I remember having this conversation with my landlady, she said, oh I have a second home in Miami and I don't know what to do because the value of it has fallen a lot. So I asked her how much more do you have on it and she said well I actually got 100% mortgage. But on the day of signing my mortgage papers I was I was even offered another extra $10,000 for renovation. Why did you do that? And she said well I was promised that property prices in my block has is always going to increase by 7% every year. So then I asked her that look If the GDP of America is growing by only by 2.5, 3% every year And your property is growing by 7% every year. Then in theory 50 years later or 100 years later the value of your home will be more than value of the United States. Right? And then she heard me and said oh yeah when you put it like that you make a lot of sense. So the simple thing that asset prices don't go up forever inflation rate, you cannot borrow and spend all the time. Those are some of the basics that I think are key challenges that an average american has to face day in and day out. It's funny you talk about the...

...home, I can't remember if it was rich, dad, poor dad or if it was the millionaire next door. But one of the big lessons was you never look at your home as an asset. That's one of the most dangerous things that, that I think people do and you're you're touching on to that point right now, uh when we look at just the relationship that people have with money and some of the challenges, is it educational? Is it relational? Is it a mix of both? What what's your take? Because you've been writing and thinking of doing this for a long time? No, you're right. And I think, I think it's a combination of both. But let's talk about education first. So because that's where it all starts, right? I mean if you don't have the right education, you're not properly trained if you're not properly trained, that you're not able to come to terms with the challenges that life throws at you. So, and this is the came out from the research that that me and my co founder, Doria, when we came together and we started looking around Why are people financially illiterate for lack of a better word? And we realized that it was not taught the right way. So it's like a lot of people say I'm bad at maths. No, you're not bad in math, we just had a bad maths teacher in Grade five. So you're not bad in the finance, just that you're not being taught finance the right way. So that's the first challenge. The second challenge is certain things you society and our policy makers have to make it compulsory, like just like you have to study stem classes in your middle school high school, you cannot pass high school without some knowledge in reading arithmetic and basic languages, you have to, you know, you have to be able to craft a sentence similarly, you have to be able to know how to balance a checkbook, where the money comes from. Now, question is why? Well from the 87 or eight, you're pretty much asking your parents for your pocket money cannot buy candy, can I buy a toy? That's when this, that is the starting bell for training your kid. That money does not grow on trees and that's the basis and that's what we need to work on. So that's why there's a lot of importance. We had sensor and other people who think like us, they're paying attention to personal finance for kids, Children, teenagers and when you, when you talk about kids and Children and that's the best place to start and I know you're doing that, you're going into schools, you're working with financial brands to bring this into a community because the curriculum is lackluster at best and here's a question for you, is it ever too late for someone to start learning about financial well being? Is it, is it, is it ever too too late to help someone say maybe even transform their relationship with money by the time they reach their twenties or thirties or are those habits, those beliefs already ingrained, what's your take on that. So uh, I would say it is never too late. You can always learn how to... it. But right now, we are also living in a time when you're like, if you are, if you had bad financial habits all your life and if you are one year away from the time and and you have no savings whatsoever, Then we have a problem, then maybe it is too late. But then we may have to think about alternatives about. Can you delay your retirement? Can you sell any of your family assets? Can you sell any of your assets? Can you downsize your home? Can you, can we plan out the drawdown of its social security, but broadly speaking, even if you're 45 50 and a lot of people are in those situations today because they have either gotten divorced or the pandemic, they've lost their businesses. So it is never too late to have to embrace strong financial habits. But you have to understand what are the pain points you are trying to tackle? Yes. And once you identify the financial pain points, it is much easier to find answers and then you can go with the flow, but it will be much more structured flow. This is why I see there's such a strong correlation between financial financial well being and physical well being, Financial well being and, and mental well being because it's, it's all interconnected here. I'm even hypothesizing that the, the we've we've had the covid crisis. And but but really, I think there's a much deeper crisis that's going to be at play over the next 5, 10, 15, 20 years, which is the, The financial crisis, but not like the 2008, like the the epidemic toll that financial stress is has and will continue to take on people on their health. I mean, stress is the number one reason people go to the emergency room. Um you know, and and and that stress it just, it just really will destroy the body. Were not designed to be in a constant state of, you know, stress and tension. One of the things that, that you note, it's on your website, it's only about page taking the fear out of finance. I really connected with that because of a lot of the just the research that we've done around this subject. And I'm curious to get your take what are the biggest fears that hold people back from learning about money? Yeah. And I think that's a very good question because I remember, So let me answer this question with the anecdotal story a few years ago, this young friend of mine, she was an editor at the Dow Jones Wall Street Journal Group and we were talking about money finances and I think she was really married maybe like 18 months, two years and there was this massive crash in the stock market and she just blurted out saying, oh, I hope, I think her husband's name was rick. So...

I hope rick has, you know, knows what he's doing because you know, he takes for the follow on finances. And I asked her, Do you know where your 401K. Is? And he said, Oh no, I don't know it, I don't understand it. So Rick takes care of it. I was scratching my head and this is a smart woman. She went to Stanford University and she understands she started history. But her education, which was liberal arts, almost put an automatic barrier in her mind that numbers are hard, finances hard and in the reality, if you have the right educational content engagement and if she was exposed to that. And this is the problem, that sense is trying to solve, then probably she would have been able to be in a much more firmer ground. And that is a problem with a lot of people say it's numbers, money is managed by smart people on Wall Street. Hence I'm not I'm not smart enough. So hence I should not be understanding. And it's the conversation around money that they refused to have because they believe the origin disadvantage. It's almost like trying to get a kid to get into the first swimming class, just just dive in and you will be able to figure it out, Yes, you may need some hand holding by the coach or a lifeguard. But after that it is not difficult. So a lack of clarity leads to a lack of confidence. The lack of confidence leads to a lack of conversation. I think a lot of times the conversations that we need to have begin with ourself. Gotcha, gotcha. That makes that makes a lot of sense right there. And from when you think about financial education, particularly from the lens of banking, I know banks, credit unions, they've dabbled in this probably for the past 10 years. It's been a part of the macro level conversations, but I want to get your take on this. What what is one of the common beliefs when it comes to financial education from the lens of banking, from the lines of credit unions? What is a common belief that others might have that you just disagree with? Where might they be falling short right now. So I think at a very strategic level. I don't think it offers too many banks and I'll give you an example. I was having a conversation with the ceo of a credit union. Somewhere that, and I would say not in the west coast, but somewhere in the middle. And I asked him directly how relevant is important financial education for your members. And his answer was not very relevant. I don't believe in it. And I think I still have those messages in my email interaction with him and but that's the microcosm of how many credit union ceos or banking ceos They still have those...

...ideas that I'm the banker. I know best. I will teach my customers what they need to know. That tone at the top has to change that tone at the top. Has to change. I mean what people need to embrace us. If you do not play an active role in financial literacy among your credit union members, you are not managing risk properly. It has to be part of your risk management solution because and why? Because it does not take too long for all of a sudden for a prime customer to become subprime customer, all that you need to do is put in a in a financial situation where you're skipping three loans or three payments right? So that needs to be acknowledged. Technology has transformed our world and digital has changed the way consumers shop for and buy financial services forever. Now consumers make purchase decisions long before they walk into a branch if they walk into a branch at all, but your financial brand still wants to grow loans and deposits, we get it. Digital growth can feel confusing, frustrating and overwhelming for any financial brand, marketing and sales leader, but it doesn't have to because James robert wrote the book that guides you every step of the way along your digital growth journey, visit www dot digital growth dot com to get a preview of his best selling book banking on digital growth or order a copy right now for you and your team from amazon inside you'll find a strategic marketing manifesto that was written to transform financial brands and it is packed full of practical and proven insights you can start using today To confidently generate 10 times more loans and deposits. Now. Back to the show. You share that story. I've I've I've heard the same thing and I think story, I think story is an important part of this and I know story is even big with what you're bringing to bear in the marketplace because story is what connects people together stories, what it binds us, it bonds us. And I literally literally just had a conversation uh Ceo and the banking on digital Growth program, their entire leadership team is going through learning together and they just went through a module around story selling and understanding story arc type and narrative. And he, his comment was this, he goes, I've never really thought of us as being a helpful guide, an Obi wan Kenobi a mr Miyagi, but it was like this light bulb moment. It went off and I think it's that mindset transformation when you think about story and narrative, How are you utilizing this as you're part of just go to market because it's not just the numbers and cents. It's the stories behind the stories. What's your take on narrative here.

So well, one thing that we do believe in is that uh Economics, Economics is a dangerous flood because, economics can kind of triggers you're scaring me with Economics because Economics in college one and two, I hated those classes, barely scraped by with the D and it was just happy to get out and get to the other side. Yeah, you're absolutely right. I mean like, I mean I give this example to people is that, look, I can talk to you about rate of inflation and why inflation happens etcetera. Or I can say, hey, why do you why do you think you ended up spending more money this summer on your gas and food bill? The second question you're actually engaging more because you actually have an answer, you actually will probably, someone will actually say, well I pay more on gas because it just went up, there were more cars that people are traveling more and I've paid more on food now. You know this as probably better than I do that. We're going to supply chain crisis. Look at labor. Yeah, absolutely. And in the UK for instance, which is almost my second home. I grew up there and in the U. K. People are running out of oil at the petrol stations because not enough drivers. Two black truck, my wife is Lebanese and his family in Lebanon. And the same thing looking out of power. Yeah. Food power, oil. I mean it's it's yeah, it's definitely supply chain disruption and I think again it's also happening because of free because of the lack of free flow of labor because pandemic and the restrictions and at some point people will have to ask themselves. And again this is part of economics but if you're restricting movement of labor and kept and other services then the impact that it has on day to day life and that's part of financial wellness as well. Yes. Yes. When you think about financial wellness through the lens of a community institution, a bank or credit union, what are the biggest opportunities that you see available for them to in fact make this a key part of their future growth strategy. You mentioned risk profile. But let's go deeper there. What are the big opportunities to go beyond of at that That important to this is core to our purpose. Yes. So I think the high level first of all trust and this is again in grading the tenets of biology. Kids trust their teacher, kids trust their parents. Now trusting parents we can easily establish because they're looking after you. Well why does a child trust his or her teacher with no blood relation or my teacher said so why? Because they are learning from the teacher, if the if the bank plays the...

...role of an educator and money and finance, it will be able to build trust. If you build trust among your members and customers, you can retain them, they will be with you. They will refer you they will encourage other people to join your bank. So from a high level it is almost a strategic it should be a strategic mission to provide education. But beyond that when you dig deeper, you want to better understand your customer. And the only way you do that is better communication, you foster deeper communication and communication can be broken down with a couple of things. One is you're educating, having and then you're having a back and forth exchange as well. But overall the endgame is that every time you're having a meeting in an interaction with your customer, the customer is enlightened and letting the customer is always good for business. They're they're going away smarter. We're leaving. Almost like we're leaving the world. We're leaving a person better off than what we found them. And it's it's it's good to hear you talk about trust because in a recent keynote that I gave over in the Middle East, one of the things that I talked about was this idea of trust in my opening statements and I posted this on linkedin. So I'm going to read this verbatim because it was a conversation that followed that that key note I said, I touched on truth in a bit of my opening remarks as trust is the currency in which we will trade and do business in a digital world. And this truth of trust transcends all borders. It transcends all cultures. It's just how we first number one established and the number to maintain trust, which which really must happen long before someone walks into a branch? If they walk into a branch at all, it's that that right there, I think it's going to be the biggest transformation that we need to have conversations around because trust must be established way before even a human relationship is established. And you think about like, like you use your teacher example, I'm gonna use healthcare too, right? Um, I think once again, health care and money, a lot of similarities when I get sick, where's the first place that I go? Where's the first place that you go when we gotta we gotta dr google the worst place that any of us can probably go because yes, we have all the knowledge available at our fingertips. But it's like, oh my gosh, I typed in my symptoms, I'm going to die tomorrow and then we come to our senses and like, no, I need to call the doctor and it's because they have that context that provides additional level of clarity through the conversation. I want to touch on that, that conversation because you've, you've got financial literacy, financial education, financial well being. I think really to tie all of this together is a coaching aspect too, to because that's it's...

...through the coaching. That's where the big behavioral transformations can take place because I can get all the knowledge in the world. But unless I change my behaviors, my actions, my habits, I'll probably be in the same place. What's your thought on coaching? Playing into this whole dichotomy of financial education, financial, I think coaching in general see people, I think we've already accepted the fact that adults don't like going back to the school. So if you say okay, you know, let's set up some set aside some time. Let me coach you very few people will show up unless they're going through a pain point. I think the first step that we need to establish is can there be a few, you know, players or a few people who make it their business that they will be available Whenever there's a pain point that comes up. So at our company has sent some of our content is crafted in a way, it is not just a story, it actually zero ends on a financial pain point. So an example, it could be that you are 45 years old, you have two Children, you are getting a divorce now at that state of mind, you want to be coached, but you want to be ready for the coaching. How do we ensure that you are ready for coaching? So the relationship and the trust between the person who's going through that pain point and the education provider, it could be your your organization, organization or a partnership manifested through a bank. So you're talking about your financial advisor or your banker or your financial planner. Getting close to you feeling the pain and the sentiment having either from experience with dealing with other clients, making it more real. And I think what needs to happen and we're seeing this change among some people. There are actually a group of uh financial advisors there in the late thirties that broke, broken away from the Wells Fargo's of the world, another big institution, because they realized that there Framework they were working is not really flexible enough. So when I have a conversation with a couple of people, one of them is our client, she actually focuses on uh woman who are in the late 30s have gotten a divorce and they don't know what to do. So it was more pain point driven. What, that's a great point because the desire to transform must be greater than the desire to remain the same and a lot of time it's it's the pain and I think, I think I, once again, I'm gonna come back to the health example, it's, it's like I go to the doctor, doctor says, you need to make these changes or you're going to die or you're going to have these, these, this, this pain. So...

...then what happens then I go to the gym and then I get a gym membership, but my behaviors don't change. So what I do, then I get a trainer who is that experts whose then showing me what to do, helping me establish and build new habits. So I it's it's a great point about identifying and maybe even somewhat to a degree, and you got to do this very sensitively and with a good heart, but maybe press on some of those pain points too, because I think sometimes people don't know what's hurting them. Um it's about helping the unaware become aware of, of where that pain could be, because they could be have been living in a situation or a state of mind for so long. They just lack that clarity and it's through the education now that we can bring that that clarity to bear in the marketplace if I'm a bank, if I'm a credit union and I'm listening to this and I'm like, yes, Aaron dumb. I I get it, I want to do this, I believe in this, but I don't have the buying yet from my organization, from the top down to the bottom up. What are the roadblocks that you have seen that the dear listener needs to be aware of, to first and foremost address and the number to overcome and how could they do that, I would say. So people, people talk about marketing, right? And I think uh what we haven't seen happening over the last few years despite a lot of reasons to do this is making education as part of your marketing strategy and some of the people, so I give an example to people of some of the financial institutions in the Fintech community who have done, have been able to connect better with the consumer than the traditional financial institutions. So, a good example would be people like Wealthfront or stash a couple of other platforms. Why is that because we're seeing the same thing as the Fin tech, who's really, I would say closer to the consumer more intimate, why is the Fintech there, but not the financial brand has been around for 50 100 150 years? I think it's also because Fintech in general are focused on the pain points more than the financial institutions and a lot of people, they are some of the people, mind you, they have come out from the banking institutions, have come out from uh you know, engineering or software companies and they have seen the pain points themselves. Many of the Fin techs, mind you are built upon a problem or I saw this problem when I was a banker, I saw this problem when I was a broker dealer, so I have this problem myself and I'm going to do something about it because I know there's hundreds of thousands or millions of other people who have that same problem and I would say it's an entrepreneurial mindset at that point. Yes, and I think some of these companies, the Fintech companies in particular, they have done a better job and I think what has to happen even in the traditional financial institutions... that they will have two find ways to get closer to the customers. But understand the pain points. I mean, I mean, I'm a account holder in a big bank. This bank is notorious. We have a business account there and we must shift actually at some point. But this business account business bank, Even during the pandemic, they were charging $34 overdraft. I'm like, you know, your ceo goes on television and talks about how he cares about people. But I mean, who are you hurting? I mean, exactly. So these are some of the things that we will have to address at a ground level Aaron. Um this has been such a fantastic conversation as we wrap up here. I want to get really, really practical for the dear listener. I always like to send them off with something actionable that they can apply to move forward to make progress. And a lot of times it's a very small recommendation because all progress begins with a very small, simple first step when it comes to deploying financial education, financial literacy as part of the overall, we'll call it just experience what's the very first step that you would recommend. The dear listener take on their journey here. Start with a simple ask yourself whether you need something or you want something need versus once and that's the very primal, I want this. But do you really need this the other day, My daughter who's in college brings me up because she was in the best buy. And she saw this great vacuum cleaner by, you know, by Dyson, I said, okay, but how much is the cost? $400? I said, listen, you do not need a vacuum cleaner that cost $400. You live in a dorm room, you don't need it. And you know, she really, she said, well dad, I was just trying to see if you would say yes, but I know you love me and then she's laughed. So it's this very basic thing need versus want a lot of people don't need a lot of things and that's an opportunity to a to save, that's an opportunity to save for a rainy day for your retirement kids. And even from the internal perspective of a financial brand. Um do we need a financial literacy, financial education program or do we want, I would say we need something like this because it is critical for our future growth. It is critical for the growth of people in the communities that we're serving. And if someone wants to continue the conversation, the dialogue discussion that we've started here today, what is the best way for them to reach out and say hello to connect with you? They can send an email or in them at center dot com they can write on our website. They can connect with me on any social media platforms. Uh and it will be very happy to help anyone who needs help. Fantastic. well are and um thank you so much. Great conversation, a lot of good...

...perspective, a lot of good insights, things that the dear listener can take away, think about even further because that's the goal of these conversations. It's to transform the thinking because when you can transform the thinking, that's where you can transform the doing on the other side of the equation, thank you so much. James has been a pleasure, thank you so much as always. Then until next time be well, do good and make your bed. Thank you for listening to another episode of banking on digital growth with James robert. Ley like what you hear, tell a friend about the podcast and leave us a review on apple podcast, google podcasts or Spotify and subscribe while you're there to get even more practical improvement insights visit www dot digital growth dot com to grab a preview of James roberts, bestselling book banking on digital growth or order a copy right now for you and your team from amazon inside you'll find a strategic marketing and sales blueprint framed around 12 key areas of focus That empower you to confidently generate 10 times more loans and deposits until next time be well and do good.

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