Digital finance management tools may be being slept on by the British banking and payments sector, according to recent research highlighting the demand for such products.
Tink, a financial services firm owned by Visa, has conducted research showing that 75% of surveyed UK consumers said they are mindful about making purchases because the costs of goods are so high.
A further 49% stated that they wanted to build saving posts, 27% wanted to cut off necessary expenses and 26% wanted to build an emergency fund – these responses were given when asked about personal finance goals for the year ahead. When costs have been cut, 39% of UK consumers increase their savings and 23% pay off debts.
As it stands, banks are providing customers with some financial management tools, but according to Tink there is somewhat of a gap which could be filled. Exactly half of respondents said that their banking app helps them track spend on subscriptions, but 37% said that they would like their bank to give them greater visibility over finances.
Digital banking in general has risen tremendously in the UK, particularly buoyed by the pandemic. With various banking services now at their fingertips, many customers seem to want the bank to give them more.
In the context of ongoing economic struggle in the UK, this is even more apparent. Although Britain’s economy has registered two separate cases of growth, each time by 0.6%, many consumers are still stressed by economic conditions and in particular the costs of living – again, while inflation has fallen from its lofty heights of 2022, it is still biting into people’s budgets.
“It’s clear that financial management tools can make a material difference to a consumer’s finances,” said Jack Spiers, UK&I Banking and Lending Director at Tink.
“In addition to improved financial health, our research shows consumers have also reported a wide range of wellbeing and lifestyle benefits. These vary from reduced stress levels to increased happiness, as well as less time spent on managing money.
“At the same time, there are clear advantages to banks offering these tools to their customers. In a competitive retail banking market, banks have an opportunity to differentiate their offer and meet evolving consumer expectations by helping their customers better manage their finances.”
Digitalisation has touched various aspects of British life, as it has in most other countries over the past two decades. Finance and banking is one of the areas most impacted by this, but it is also noticeable that Gen Z and millennial consumers are far more receptive to digital offerings.
As these generations continue to come of age, build up more of a financial presence and play a more active role in the economy, meeting their demands will become critical for banks and other payments institutions. Meeting demand for digital savings tools could prove to be an important piece in this puzzle.
