Immigrants and refugees are an important segment of the population to include in financial opportunity on a moral and ethical basis. Many financial capability programming have focused on increasing engagement and inclusion of these communities into mainstream financial resources.
However, this has often been done by focusing on the individuals’ knowledge, skills, and ability to access resources. By engaging communities in a design-process, we learned that their challenges with engagement are steeped in strained relationships with these institutions and don’t necessarily have to do with individual knowledge or the products they are offering.
We determined that creating a new financial product or financial service would NOT have the desired impact we hoped to achieve with immigrant and refugees in the U.S. But rather, investing in the quality of relationship an individual has with a financial institution can change attitudes, behaviors, and decisions to engage in ways that make sense for these communities.
It’s financial institutions responsibility to build relationships to increase financial inclusivity for immigrants and refugees.
We heard clearly that information wasn’t enough to drive dramatic change for these communities. We also believe that individuals behave in a way that best align to their life and goals – this wasn’t a matter of educating immigrants and refugees about financial products and services or imposing values of what anyone “should” do. We discovered nuanced factors in a complex system that contributes to where we’re at today. Financial institutions are in the best position to drive change for immigrant and refugee communities when it comes to increasing access to suitable services.
Trust is worth investing in.
The relationships individuals have with financial institutions make a difference in their behavior, attitudes, and decisions. The trust and quality of relationship span generations and are passed along through transitive trust among community members. The good stories and the bad stories get retold and reshared, thus extending the life and impact of potentially a single encounter beyond that moment and the people directly involved.
Even without first-hand negative experience, the social perception shared by others can impact individual behavior, which can reinforce a sense of fear and distrust.
We heard perception and concern around specific financial institutions from individuals who had no direct experience with that institution. The transitive trust that is foundational to many communities and social groups contribute to the impact of negative stories individuals shared. This kind of wisdom and insight shared from others is valuable to any community or social group, and especially those who are at a decision point about what to do next.
Insights from Payday Lenders surfaced a few key opportunities that other financial institutions could invest in to change their customer experience.
While there’s no shortage of controversy and concern for the predatory practices of payday lending, there were two things we saw payday lenders do well that financial institutions could invest in to strengthen their customer experience. The individuals we spoke to who worked at a payday lending facility created personal connections with their customers, often referring to each other on a first-name basis and asking each other about their kids, their family members, and job. This personal relationship contributed to a sense of belonging for customers that walked in the door. One of the staff members we spoke to was previously a customer and felt that they were offering services to people who wouldn’t otherwise get access to services and recognized while expensive, it felt clear what to expect. While the terms were unfavorable for interest rates and associated fees, we also heard that the services felt clear and transparent, as they were posted right behind the counter. Conversely, we heard stories of suspicion, fear, and examples of individuals feeling surprised by how a financial service worked after months of using something and felt like there were details hidden in large amounts of paperwork.
What We Designed: Immigrant and Refugee Financial Inclusion: Assessment & Action Plan
We developed a 3-part approach which puts the effort and accountability to drive change on the side of financial institutions.
With the Organizational Assessment, financial institutions can measure how inclusive their organization is through the voice of staff and leaders using a 10-minute, 13 question survey.
Using the Community Perception Assessment, financial institutions can measure how inclusive their organization is through the voice of community members through a 10-minute, 15 question survey. Both assessments measure, respect, trust, accessibility, transparency, engagement, and community representation.
The Tactics Toolkit is a catalog of actionable next steps organizations can use to drive change in their organization and their relationship with immigrant and refugee communities.
Thank you to our partners: The Financial Health for Diverse Communities Project blends a group-based financial coaching curriculum and an assessment and action program that financial institutions can launch. We want to thank Northwest Area Foundation, for their generous support of this project. Also thank you to our project partners: Global to Local and Express Credit Union, for their insight and support in developing and testing this concept.