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How Financial Institutions Can Appeal to and Help Customers through the Cost of Living Crisis

There’s a great deal of uncertainty for consumers as we approach the winter months, with news on energy bills never being positive and constant reports of high inflation and petrol prices.

Posted: 25th November 2022 by Finance Monthly
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While the UK government looks to be acting to help in some ways, most get the idea that they’ll have to temper their lifestyles when the cold crunch arrives.

That said, there are some more positive reports filtering through, such as the fact that inflation did fall after a drop in petrol prices in August to 9.9 per cent. Overall, however, people are looking for ways to stave off the Cost of Living Crisis. This is where financial institutions should step up. Naturally, a business isn’t going to just give away free money, but small offers and gestures that will help will almost certainly be well-received.

Exploring buy now, pay later

People still need to make purchases, and many are seeing their rainy day funds start to get eaten into by everyday expenses. To help them to continue to make major purchases that are necessary, integrating a buy now, pay later (BNPL) scheme can be very appealing. With this, the business foots the bill to the supplier, and the customer pays them back to a set plan over the next few months.

This is an increasingly popular way of appealing to customers, with under-30s finding it particularly enticing. So, those offering BNPL need to have competitive rates for not just interest on each payment, but also late fees. It was found that 42 per cent of consumers that have used such schemes have made one or more late fee payments. People do like having the option to divide big payments, which is why BNPL is on the rise.

Offering interest-free whenever possible

A lot of consumers have admitted to using their credit cards to pay energy bills and other living essentials already as they don’t have the current account funds. Of course, with credit cards, what always sits at the back of peoples’ minds is the interest and the accruing debt. So, putting up an interest-free window can offer the respite that they crave.

These have to be well-structured, however. The interest-free credit cards need to have a decent window of no interest, such as 17 months, be devoid of an annual fee, and have a competitive representative variable rate for when the interest-free window on purchases expires. It offers the cushion of a credit card but without the catch.

Increase any cashback offers

Offering cashback on certain service and goods payments has become popular among many financial businesses, helping to encourage spending in the right areas and giving back on essential purchases. Wherever these cashback promotions are in place, they would certainly appeal to customers if the percentages were to get a bump. Cashback on the likes of electricity or purchases at major supermarkets being bumped will certainly catch the eye.

Establish a support team within your customer service

Regardless of the offers that you can make, a lot of customers simply aren’t financially savvy enough to feel secure with the headlines running as they are. It also doesn’t help that the internet is now built to entice you to make purchases. Establishing a support team specific to this who can even implement custom safeguards – such as blocking purchases to specific sites or venues – would assist many people seeking answers and help.

Another means by which some financial service providers are supporting their customers is by creating a space dedicated to tools and ideas that can help them ease the rising cost of living. Visitors to such spaces can register to attend online webinars or access information on arranging more favourable overdraft measures temporarily. Gathering this under a single page is a simple way to make it easier for such a business to communicate it to customers and for customers to use it.

With consumers across the country worrying about their money, it should be up to financial institutions and businesses to lend a helping hand wherever possible.

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