What is the Seymour Financial Resilience Index TM and how can it benefit your organization?

 

What the Index Measures  

The Index measures a household’s ability to get through financial hardship, stressors and shocks as a result of unplanned life events. It measures this at the individual household, segment, provincial and national levels, across nine behavioural, sentiment and resilience indicators. 

Seymour Consulting launched the Index in May 2020, building on four years’ of data analysis from our national longitudinal Financial Health Index studies dataset. The index provides financial resilience scoring for Canadian households at the macro and micro-levels for all households, including non-borrowing individuals, new immigrants and others typically ‘missed’ by the credit score. This is the first Index of its kind to be launched in the world.   

With the global pandemic impacting Canada, and financial vulnerabilities and hardship of Canadians a critical issue, there are many benefits for Financial Institutions, Government and other organizations to access the Index through Seymour Consulting.   

Please contact us for more information or a consultation on how the Index, scoring and analytics can support your organization.     

Benefits and Applications 

For Financial Institutions – including banks, credit unions, lenders, fintechs, alternative financial services companies and payment organizations; insurance and wealth management companies:   

Measure, understand and track the financial resilience (and vulnerability) of your individual customers, at the individual customer/ household, segment, provincial and national levels.   

  • This can inform your decisioning and help your organization create more nuanced, targeted credit and risk strategies and customer strategies.
  • Your customers’ financial resilience score can be an augmentation and complement to their credit score and other risk models and customer data. Their score can also be provided with your organization’s mean financial resilience score, the provincial mean and national mean scores, provided through the Index.

Enhance your analytics, predictive modelling and opportunities to better understand and help improve the financial resilience, health and stress/ wellness of your customers, while building financial and operational resilience for your organization. 

  • This includes as your customers they navigate financial stressors or as a result of unplanned life events, and as controllable and less controllable challenges cause financial vulnerability, hardship and financial stress
  • Understand gaps and opportunities with relation to ‘nudging’ and supporting your customers to build and improve their financial health and resilience, including through changing their consumer or financial behaviours. Our Index data can be combined with transactional data.

Differentiate your brand: with insights on your customers’ needs and pain points highlighting opportunities to better support them, through engagement and an enhanced customer experience and support.

Gain performance tracking: on the extent to which your financial institution or company is helping to improve the financial resilience and wellness of your customers over time, and the business benefits of these investments – in terms of growing share of wallet and brand advocacy. This can inform customer experience innovations and help inform marketing and customer experience strategy for your customers and key segments.

Strengthen your community impact: linking outcomes measurement to wider social impact outcomes, including linked to the mental, emotional and physical well-being of individual customers, employees, families, small businesses and the communities you serve. The Index can also help you target your community impact initiatives for more vulnerable populations your organization is keen to support.

For Federal and Provincial Governments:

The Seymour Financial Resilience Index TM can be  harnessed to drive positive social impact, including by Government and for non-profit and other organizations looking to support Canadians who are most financially vulnerable. It measures and tracks the financial resilience of Canadian households over time, and aspects related to the connection between financial well-being and overall personal well-being, and challenges and opportunities with relation to ways to build income equality and financial health and resilience for all.

Our data and Index brings new understanding and measurement on the extent to which Covid-19 Government supports and other programs are helping to improve the financial resilience of Canadians and key segments, while improving financial security, financial health and financial well-being. This includes for more vulnerable populations, and for people and small business owners impacted by reduced hours or job losses as a result of the pandemic impacts on households and our economy. 

For Employers, Credit Counselling and Financial Help Organizations:

Employers can score and understand the financial resilience of their employees, and the proportion of employees that are less engaged or productive at work, or facing mental or physical health challenges, as a result of financial stress and/or financial challenges in their household.

The Index and complementary FHI data also shines a light on how credit counselling agencies, financial help organization and other social enterprises can have increased impact with the customer or populations they serve, including for more financially vulnerable populations and those facing systemic barriers.

For more information, go to: why measure financial health and resilience? page or contact us.

Index Release Report

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Application and Benefits

Access the Seymour Financial Resilience Index, our benchmark data and services to support your decisioning, strategy and impact. 

Financial Institutions, Government and other organizations can apply the Index and Financial Health Index studies data insights and our services to help measure, score and understand the changing financial resilience (and vulnerabilities) of their customers, portfolios, employees, citizens and communities – to inform strategies, innovation and programs at the enterprise, provincial, segment and individual household level. 

Our Index data and analytics can be combined with banking and transactional data, and insights combined with strategies and tangible action plans. This helps transform the way you engage, serve and support your customers from a holistic perspective and across the spectrum of daily financial management, saving planning and investing, debt and credit management and protection/ insurance.

Financial resilience segment population size as of June 2020

Index Development Process and Model Strength

The Index was developed through an iterative process to regressing and evaluating over 30 potential indicators against self-reported “financial resilience” or “financial stress” measures using the multiple linear regression technique. In the end, nine variables were determined to account for 584 percent of the variance in the financial resilience construct. In social sciences, a R-squared of 0.584 is considered to be a strong model.

The regression model was validated against 2017, 2018 and 2019 survey data, which revealed consistency in results, represented both by a strong R-squared as well as similar weights of the independent variables as predictors of financial resilience (note: weightings for the model are based on their overall contribution to the dependent variable in the model and are not equal).

Based on 2017 and 2018 FHI data, six out of the nine index model independent variables were available, and in in the 2019 FHI data 7 of the independent variables were available. All 9 variables including the composite variable are available based on the 2020 FHI data for February 2020.