Examining the way in which consumer financial behaviour is impacted by technology, the third annual report shows a broad fintech adoption rate across demographic groups, with consumers looking to tighten their finances against the cost of living crisis backdrop.
Existing users’ reliance on fintech apps is increased by these financial concerns, while a new wave of fintech users that manage their finances digitally for the first time is being ushered in. Brits expect to digitally manage an approximate 72% of their finances over the next six months, an increase from the current 67%; those who are not using fintech as of now expect that they will manage 58% of their finances digitally over the same period, an increase from the current 52%.
As opposed to last year’s research, which demonstrated how consumers developed new habits following the COVID-19 pandemic, this year’s report shows that those habits have been carried over beyond the pandemic. When it comes to the benefits of fintech as reported by consumers, 41% has stated that they are enabled to have a greater understanding of their spending, thus being able to have better money management. More than half (56%) reported that fintech helps them save time, whereas 49% stated that it helps them have increased control over their finances.
Consumers’ financial stress is on the rise, 62% of consumers having stated that this has increased since 2021, with 83% citing the rising cost of living as being their main concern. The economic backdrop, with interest rates rising and inflation, influences people’s confidence when it comes to their relationship with money, this having declined to 61% in 2022 from 77% in 2021; additionally, a worrisome 41% of consumers have reported they have little to no confidence in the economy.
However, the report highlights the opportunities for enhancing consumers’ financial wellbeing; approximately three quarters of consumers (74%) have stated that they need their bank to be able to connect to the apps and services they want to use, whereas 48% have expressed a wish for seeing their bank partner up with more fintech companies. Open Finance is seen as being the next step when it comes to UK consumers’ understanding and managing of their holistic financial life, due to its enhanced connection of financial data that includes pensions, savings, and investments.
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