Why Financial Health Matters
Our many many financial health reports published since 2017 highlight why a focus on financial health and resilience is critical. As the Government seeks to build a resilient and equitable Canada through the pandemic and beyond, and Financial Institutions seek to support the needs of their customers and communities, we also see a growing need to focus on health, with financial health an important contributor to overall health and well-being.
Our Index and FHI studies highlight that financial stress, and financial vulnerability, is a mainstream issue for Canada, despite it being one of the richest countries in the world. Less than a third of Canadians are financially resilient. And there are many populations facing financial vulnerability and hardship, including women; low income Canadians, those impacted by job losses or reduced hours as a result of the pandemic, small business owners, renters, Canadians with disabilities, Indigenous peoples, and those facing financial hardship as a result of unplanned life events such as divorce, disability or death.
Defining financial health, resilience and wellness
Within the overall construct of financial well-being
In line with our holistic framework, developed clear definitions for financial health, wellness/ stress and resilience in 2016. This framework shapes our work and the many different indicators we measure through the Seymour Financial Resilience Index TM and Financial Health Index studies.
Financial health is about your ability to balance your financial needs of today with those of tomorrow, and get through times of financial hardship.
Through our FHI studies and Index, here we measure multiple consumer and financial behaviours, such as the extent to which households plan ahead for upcoming expenses, save towards longer term goals, or manage debt. These span the spectrum of daily financial management, debt/ credit management; saving planning and investing, and protection.
Financial resilience is about your ability to get through financial hardship, financial stressors or ‘shocks’ as a result of unplanned life events.
Here we measure different aspects that impact households, including their confidence in ability to weather financial stressors and shocks as a result of unplanned life events; access to social capital in times of financial hardship, or available liquid savings buffers that can help people make ends meet if needed.
Financial wellness is about your emotional peace of mind in terms of your financial situation and current and future financial obligations. The opposite is financial stress.
These inter-related constructs together are part of over-arching construct of consumer financial well-being. Please contact us for more information about our framework, developed over many years and validated with the input of many consumers, experts, academics, financial professionals and partners.
Additional controllable and non-controllable factors that impact Canadians’ financial well-being that we track through the Financial Health Index studies relate to, for example, the cost of living, housing affordability and other factors; challenged access to relevant financial products, services, advice or support; levels of social capital; levels of support from a person’s primary Financial Institution in helping to improve their financial wellness; retirement income and sources; sufficient protection; reliance on and usage of credit for everyday expenses; positive steps taken to improve financial wellness; credit card management; usage of predatory financial services such as payday loans, and more. Please contact us for more information.
Your ability to balance your financial needs of today with those of tomorrow, and get through times of financial hardship.
Your ability to get through financial hardship, financial stressors or ‘shocks’ as a result of unplanned life events.
Your emotional peace of mind in terms of your financial situation and current and future financial obligations. The opposite is financial stress.
Why Financial Health & Resilience Matters
Financial health and resilience is vital to overall emotional and physical wellbeing, family stability and people achieving their life goals – not just for today but for generations to come. Financial stress, financial vulnerability and hardship have many negative implications for individuals, families, small businesses and communities, impacting growth and economic prosperity.
Please check out our white papers for more info, based on our longitudinal Financial Health Index studies, qualitative and quantitative financial health research and measurement work – an on-going journey.
Government, Financial institutions and Businesses are being asked to do more to support peoples’ financial well-being, in a way that puts people’s best interests, addresses real needs and pain points, and drives impact.
In business and financial services, financial health is a new avenue for customer-focused innovation and good for the financial services industry, while cementing and deepening customer relationships and loyalty. In return, financially healthy and resilient customers offer new opportunities for engagement, loyalty, enhanced risk and credit management, enhanced customer relationship management and long-term revenue streams for organizations.
Protecting and supporting consumers in relevant ways with their daily financial management, borrowing, saving, planning and investing and protection also helps them to address gaps and blind-spots – and build their financial health and resilience over the medium to longer-term throughout their lives.
Is your organization ready to embark on your financial health innovation journey for your customers, employees and communities? We can help