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CONSUMERS AND FINANCIAL MANAGEMENT-UK-APRIL 2018

Published By :

Mintel

Published Date : Apr 2018

Category :

Banking

No. of Pages : N/A

Open Banking is on the cusp of full implementation, and the financial management landscape feels ripe for a shake-up. That said, many are still comfortable using spreadsheets or paper-based methods, while financial confidence is being undermined by a lack of formal financial education. Providers can step in to provide support that is sorely needed.

Table of contents

OVERVIEW
What you need to know
EXECUTIVE SUMMARY
The market
Many young people have never dealt with a higher interest rate environment
Figure 1: Annual average Bank of England base rate, FY 1975-Q1 2018
Companies and brands
Banks, challengers, and PFM apps set out their stalls for Open Banking
The consumer
Nine in ten people rate themselves as financially confident
Figure 2: Confidence in managing finances, February 2018
Insurance products draw the only stand-out switching rates
Figure 3: Product switching behaviour, February 2018
Parents are most likely to have an influence on financial management
Figure 4: Influences on financial management, February 2018
Online and in-branch banking are the dominant management techniques
Figure 5: Tools and services used to manage finances, February 2018
Free information sources favoured due to accessibility
Figure 6: Sources of financial management information, February 2018
Gap in financial education at school prompts strong feeling
Figure 7: Attitudes towards financial management, by generation, February 2018
What we think
ISSUES AND INSIGHTS
Providers can succeed where schools and universities fall short
The facts
The implications
Cash infrastructure still holds an important place in financial management
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Interest rates expected to rise further and Open Banking stalls
RECENT DEVELOPMENTS
Big banks delay Open Banking implementation as challengers push on
First interest rate rise in almost a decade sparks speculation
Figure 8: Annual average Bank of England base rate, FY 1975-Q1 2018
Link has proposed a reduction of interchange fees charged to banks
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Banks, challengers, and PFM apps jostle for position
COMPANY STRATEGIES
Traditional banks and building societies
High street banks return to the advice market
First Direct launches Artha app in partnership with Bud
Digital challenger banks
Starling Bank presses ahead with marketplace concept
Tandem follows Harrods Bank buy with Pariti purchase
Personal financial management (PFM) apps
Emma makes a move into the payments space
Yolt gathers up a strong share of users in first six months
Bean looks to grow with help with recurring payments
THE CONSUMER – WHAT YOU NEED TO KNOW
Nine in ten people rate themselves as financially confident
Motivation and confidence drive higher switching of general insurance products
Parents are most likely to have an influence on financial management
Online and in-branch banking are the dominant management techniques
Free information sources favoured due to accessibility
Gap in financial education at school prompts strong feeling
CONFIDENCE IN MANAGING FINANCES
Nine in ten people rate themselves as financially confident
Figure 9: Confidence in managing finances, February 2018
The confident and the unconfident: who are they?
The confident
The unconfident
Figure 10: Confidence in managing finances, by age and gender, February 2018
PRODUCT OWNERSHIP AND SWITCHING
Insurance products draw the only stand-out switching rates
Figure 11: Product ownership and switching behaviour, February 2018
Figure 12: Proportion of product owners who have switched in the past 5 years, February 2018
Higher earners are more likely to have switched
Figure 13: People who have switched any product in the past 5 years, by gross annual household income, February 2018
Confidence and switching are positively correlated
Figure 14: Confidence in managing finances, by product switching behaviour, February 2018
INFLUENCES ON FINANCIAL MANAGEMENT
Parents are most likely to have an influence on financial management
Figure 15: Influences on financial management, February 2018
Banks and friends come in a distant second
Schools and universities are at the bottom of the pile
Younger people more likely to feel influenced across the board
Figure 16: Influences on financial management, by age and gender, February 2018
FINANCIAL MANAGEMENT TOOLS AND SERVICES
Online and in-branch banking are the dominant management techniques
Figure 17: Tools and services used to manage finances, February 2018
Figure 18: Number of tools/services used to manage finances, February 2018
PFM apps struggle to rival spreadsheet management
Figure 19: Tools and services used to manage finances, by generation, February 2018
SOURCES OF FINANCIAL MANAGEMENT INFORMATION
Free information sources favoured due to accessibility
Figure 20: Sources of financial management information, February 2018
Figure 21: Number of sources of financial management information used, February 2018
25-34s extend voucher and deal website use into financial services
Figure 22: Sources of financial management information, by age, February 2018
ATTITUDES TOWARDS FINANCIAL MANAGEMENT
Gap in financial education at school prompts strong feeling
Figure 23: Attitudes towards financial management, February 2018
A fifth of Millennials say it’s too late to make changes to financial management
Figure 24: Attitudes towards financial management, by generation, February 2018
Robo-advice could help empower the financially unconfident
Figure 25: Interest in receiving automated online financial advice tailored to personal situation, by confidence in managing finances, February 2018
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology

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