Tink, the data enrichment and payment services platform, has conducted research into UK consumers’ attitudes to financial management tools. It has revealed that as many as 7.6 million Brits are using such tools and as a result are saving £3.384billion a year.
The savings don’t stop here though. According to the payment services platform, if every person over the age of 16 was using a financial management tool, over £24billion could be saved. These findings are extremely timely as 75 per cent of UK consumers are mindful about what they are buying due to high costs.
As such, it comes as no surprise that more users are turning to new ways to save, like financial management tools. Thirty-nine per cent of respondents said they are using the extra funds saved to increase their savings, while 23 per cent would use them to pay off debts.
From a financial goals standpoint, including those that haven’t used a financial management tool, nearly half the respondents said they would be putting any money saved into a savings pot (49 per cent). Meanwhile, 27 per cent said they wanted to cut off unnecessary expenses. Additionally, 26 per cent said they wanted to build an emergency fund.
Jack Spiers, UK&I banking and lending director at Tink
Jack Spiers, UK&I banking and lending director at Tink comments: “It’s clear that financial management tools can make a material difference to a consumer’s finances. In addition to improved financial health, our research shows consumers have also reported a wide range of wellbeing and lifestyle benefits. These vary from reduced stress levels to increased happiness, as well as less time spent on managing money.
“At the same time, there are clear advantages to banks offering these tools to their customers. In a competitive retail banking market, banks have an opportunity to differentiate their offer and meet evolving consumer expectations by helping their customers better manage their finances.”
Adapting to cater for consumer demands
The demand for digital-first tools is growing, and banks must recognise this in order to stay ahead of the competition. One way this can be achieved is through better financial management options. Half of consumers (50 per cent) surveyed would like their banking app to help them track spending on subscriptions. Furthermore, over a third (37 per cent) would like their bank to give them better visibility over their finances.
A failure to account for this demand could be costly for banks too. The survey also suggests that some consumers are more likely to consider switching banks to gain access to better support and tools to help them manage their finances. Over a third (36 per cent) of respondents say they would switch to another bank if it provided them with tailored support to meet their financial goals. A similar number (32 per cent) would switch to another bank if it provided them with tools to track and manage their spending.
As well as driving loyalty and engagement, respondents from a separate Tink survey of banking executives reported additional benefits from providing these services. Almost half (46 per cent) of banks offering digital financial management tools reported seeing increased ‘top of wallet’ behaviour in consumers – such as greater card usage and higher payment volumes.
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