According to new research, nine in 10 Brits feel undereducated when it comes to personal finance with 47% believing it is their bank’s duty to help make financial decisions.
Pepper’s report, Banks’ Role in Modern Society, reveals that UK consumers are open to help from banks despite 24% believing they have been misled by banks.
In addition, the report found that two thirds of Brits do not feel well equipped to make the best financial decisions for themselves, with 68% admitting they are not financially observant.
Michal Kissos Hertzog, Pepper CEO, said: “Consumers want their bank to be much more than just a safe house for cash; they want more help with their money – just like they don’t use Spotify as their music storage only, they want to discover new artists through customised data.
“The UK’s financial literacy gap is preventing many Brits from making the best possible financial decisions and digital banks have a real opportunity to empower consumers to make better money choices.
“We’ve started to see this initiative with money management apps that provide personalised spending breakdowns, helping customers be better aware of how they are spending their hard-earned cash. With a flexible digital core, there’s no reason why traditional banks cannot provide such services and more, enabling customers to take charge of their finances.”
Unsure about savings
Pepper’s research showed that 72% of consumers do not currently invest in stocks and shares or in an investment fund.
Kissos Hertzog said: “In the current political and economic climate, it is unsurprising that consumers are risk averse with their cash. But so many consumers are missing out on the opportunity to grow their savings simply because they lack the know-how.
“In a low interest rate environment particularly, investments can be a great option for many consumers to grow their savings, provided they know where to start. Again, with the right technology banks can provide solutions to educate customers – just like we have done for our customers with Pepper Invest.”
In 2017, Bank Leumi launched digital challenger Pepper to allow customers to manage their banking activities via mobile.
Walnut Research conducted Pepper’s report on financial literacy, surveying over 2,000 UK consumers.