The way forward for monetary expertise? Empowering the buyer
Janine Hirt is Chief Operating Officer of Innovate Finance, the industry association for UK fintech. Here he discusses the role of fintechs – and the wider financial services ecosystem – in supporting and developing the growth of financial literacy.
For me, financial competence is a very personal and subjective concept. It is the ability to understand how your money works and how to make it, save it, and grow it.
An important question is: What is a company’s duty to help their customers stay financially healthy for a lifetime?
In my view, their responsibilities are great and far-reaching.
Financial competence over several generations
Our efforts to improve financial literacy should not only focus on young people. Brands need to think about how to connect with people of all ages.
In recent years, fintech brands have risen to the challenge of creating technologies that appeal to younger audiences and help them improve their financial literacy.
However, middle and older generations also need resources to help them learn – especially as financial decisions become more complex and effective as life goes on.
For example, the average customer of the investment management company Scalable Capital is 48 years old and nearly half of the customers are over 50 years old.
We need to make sure we see fintech as a solution for educating all populations, not just the youngest.
Maximize the potential of the technology
The essential and positive role technology plays in improving financial literacy cannot be ignored. Technology helps people learn quickly, at a time and place of their choice, while having fun!
To advance education and knowledge we also need to challenge the stigma of talking about money, to which technology contributes.
Brands have a responsibility to invest in technology in this area, but it’s also a missed opportunity if they don’t.
Both here in the UK and around the world we see interesting trends that reflect this.
In Brazil, challenger banks offer well-rounded offers to improve their customers’ financial literacy.
Similarly, UK challenger brands like Monzo, Starling, Revolut and even large established companies like NatWest are finding ways to simplify, or in some cases even gamify, financial understanding and education.