Boost financial literacy with innovative tools

NCR - Digital-First Banking - June/July 2022 - A fresh look at how financial literacy affects young consumers' expectations of digital banking

Digital banking is especially popular among members of younger generations, like Millennials and Gen Z, many of whom have never banked in a branch. However, these generations are also the least likely to have a strong understanding of financial matters. Forty-one percent of teens say their high schools don’t offer any financial literacy classes, and 34 percent of Gen Z reportedly learned about personal finance from YouTube and TikTok rather than classes or parents.NCR - Digital-First Banking - June/July 2022 - A fresh look at how financial literacy affects young consumers' expectations of digital banking

This challenge forces young adults to rely more on digital banking tools to seek the financial advice and knowledge they lack, and their expectations of technology are high. Transparency and convenience are top priorities, and financial institutions (FIs) that emphasize these qualities in their mobile banking apps are setting themselves up for success. Some banks are taking direct steps to improve their customers’ financial literacy beyond just providing seamless experiences.

In the last Digital-First Banking Tracker®PYMNTS explores why younger generations tend to lack the financial literacy of their older counterparts, what these consumers are looking for in digital banking, and how meeting these demands can produce more satisfied and loyal customers of all ages.

Around the digital-first banking space

NCR - Digital-First Banking - June/July 2022 - A fresh look at how financial literacy affects young consumers' expectations of digital bankingTeens have plenty to worry about without their financial future at stake, but money can be an added stressor for most teens. A recent study found that 54% of teens worry about funding their future, with various concerns leading to this outlook. Nearly 70% of respondents said the rising cost of pursuing higher education changed their plans after high school, and 49% said cost was their top concern. Another 43% worried about taking out student loans and 27% worried that college would not be a worthwhile investment.

Improving digital service offerings is one way to help consumers who lack financial literacy, and financial institutions (FIs) are jumping at the chance. One example is North Carolina-based Allegacy Federal Credit Union, which has partnered with NCR and Google Cloud to implement a new data analytics program. The credit union (CU) will leverage the program to help its members understand savings goals, credit scores and spending plans. The data analytics solution is also intended to help the CU on the back-end by leveraging data visualization tools, helping leaders plan new initiatives based on the performance of previous ones. Allegacy currently has 16 branches in North Carolina and manages $2 billion in assets among 166,000 members.

To learn more about these and other stories, visit Tracker news and trends.

GoBank on Improving Customer Financial Literacy

Financial literacy is a crucial life skill that is sadly lacking in many people, especially younger, less affluent generations. Lack of this know-how exposes consumers to further financial hardship, such as overdraft fees and late payments, which can quickly add up.

In this month’s feature, PYMNTS spoke with Abhijit Chaudhary, Product Manager at online checking account provider GoBank, about how the FI is deploying credit monitoring and payments consolidation to improve the financial health of its customers.NCR - Digital-First Banking - June/July 2022 - A fresh look at how financial literacy affects young consumers' expectations of digital banking

How Financial Literacy Affects Consumers’ Digital-First Banking Preferences

Digital financial services are particularly appealing to younger generations due to a lack of financial literacy compared to their older peers. In the absence of real-world experience, young consumers are coming to rely on digital banking tools to learn about financial matters, and they have high expectations of technology and tend to have a low tolerance for digital banking frictions.

This month’s PYMNTS Intelligence examines the issue of financial literacy among younger generations and how it affects both their needs and expectations for digital banking.

About Tracking

The Digital-First Banking Tracker®a PYMNTS and NCR collaboration, explores the latest in the world of digital banking, including the lack of financial literacy among younger generations and how this affects their banking expectations.