A new study by ThoughtWorks, a global software consultancy, found that as many as six in ten people (61%) in the UK feel they did not have the necessary skills to manage their money properly.
The findings come at a time when seven in ten Britons say that life through lockdown has fundamentally changed the way they manage money, with 62% saying they are now in better control of their money than they were before COVID struck.
Asking about basic education when it came to personal finances, almost half (46%) of people believed that money skills should be part of the national curriculum. Amongst people aged over 55, this figure rose to three in five (61%). Meanwhile, over a quarter (29%) believed the banks themselves should educate people on money skills, from saving to budgeting.
Similarly, the results showed that more than a third of people (37%) would like to see the banks offering a programme for the elderly to help manage their money in the digital age. Again, this rose most among older people (over 65s) to 51%.
Insufficient access to financial services
As the campaign for more laptops in schools gathers momentum, the research suggested there was a problem that needs addressing in financial services too. Almost a third of respondents (31%) believed that banks should provide tech/mobile devices for those that cannot afford them. This would enable everyone to participate in online money management. This was particularly the case for those that lived in rural areas (38% vs 27% of those in cities), further exacerbated by often poor connectivity in rural areas.
Furthermore, around a quarter (27%) would like to see banks actively engaging with customers who have previously felt excluded.
Technology as the solution
Many felt that the solution in simplifying and improving these shortcomings lay with technology. The figures showed that 28% would like all their financial products streamlined into a ‘one stop shop’, while roughly the same proportion would like to see more transparency on their credit score. Around one in ten (10%) would be happy for artificial intelligence and machine learning to help them with their financial affairs to suggest improvements and efficiencies.
Phil Hingley, director of financial services at ThoughtWorks UK said: “For millions of people mystery shrouds aspects of their personal finances – from how much to save to how to budget properly. Consequently, this creates anxiety and worry that then drives people away from taking charge of their long-term financial future. However, lockdown has created a seismic shift when it comes to people’s mind-set around personal finance. For the first time, vast numbers of people feel that they are starting to gain control of their outgoings and incomings, which is a promising position upon which to build. This change in attitude could have a long tail, particularly for future generations if the right infrastructure and education is put in place now.”
Clearly, technology has a key role to play in cementing change for the future. As increasing numbers of people manage their finances online and in isolation, the challenge is to ensure they feel sufficiently equipped and supported to make decisions. The future of personal banking will be radically transformed over the next ten years, as behaviours change and digital platforms continue to develop, from open APIs to improvements in user experience. The key for banks is in predicting the most likely changes, and investing in the right technology now so as not to fall behind competitors.