Talking and tech: How UK Millennials are managing finance
In new research released from Europe...
According to Klarna, millennials are managing their finances unlike any other generation. FinTech investigates.
In new research released from Europe’s biggest fintech, Klarna, titled “Money management in a new age”, it has been found that generation X, or “millennials” (ages 18-38) are leading the way in the redefinition of customer tastes in banking. The research was conducted across 10 markets, and Klarna engaged with over 20,000 consumers about their financial preferences and attitudes when managing money.
Perhaps unsurprisingly, millennials are leading the way with the adoption of technology when it comes to managing money. 78% of millennials say that technology has had a major impact on how they manage finances as opposed to previous generations, to which 67% of which agreed.
Particularly in the UK, discussing finances and salaries has always been something of a taboo. Yet this is changing, according to the Swedish fintech, who shares that millennials are far more likely to talk openly about finances as opposed to previous generations. 50% of millennials express the importance of openly discussing finances. This transparency extends to financial providers too. 27% of this generation expressed a firm need for clarity from financial providers – whether they are digital startups or traditional banks – particularly with regards to terms and conditions, saying that this will increase their trust and loyalty to a provider.
Viveka Söderbäck, Consumer Behaviour Expert at Klarna, said: “Every generation has its own identity. Technology evolves — as does how people work, live, and shop. Each generation also treats money differently.”
She continues, “While millennials tend to have the reputation of being less financially responsible, our research shows that this is not necessarily the case. Instead, they seem to be developing their own unique strategies for managing their money effectively.”
Did you know? Another interesting fact to emerge from the research is that cash very much remains king in Germany, Austria and Spain.
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CMA warns UK and Irish banks over bank transaction histories
Specifically, the CMA named prominent challenger bank Monzo, the Bank of Ireland, NatWest Group, and Virgin Money as not providing customers with records of their bank transactions within the maximum outlined timescale (40 days after closing the account).
Such information is crucial not only for ensuring a smooth transition from one bank to another, but also to provide a foundation for credit applications in the future.
According to the Retail Banking Market Investigation Order 2017, 95% of bank and building society customers should receive their bank transaction histories in at least 10 days.
Reputation: A bank’s greatest asset?
Of the 150,000 customers affected, Monzo was by far the main contributor - 143,000 (95.3%) - with the other three dividing the remaining 7,000.
The extent to which the magnitude of its mistake is attributable to being a digital-only bank is not clear, although it may give some customers pause for thought. With a superior customer experience being among the bank’s greatest assets, continued reputational damage is something that it cannot afford to sustain.
Although the CMA’s action in this instance has been to issue each bank a warning and order the immediate dispatch of all outstanding information, it has warned that future breaches will carry heavier consequences. Measures could include legally enforceable compliance audits on a yearly basis.
Helping customers get a better deal
Condemning the banks for negligence that could negatively impact customers’ desires to take out loans or mortgages, Adam Land, CMA Senior Director of Remedies Business and Financial Analysis, promised that his organisation would remain vigilant to similar behaviour moving forward.
“Banks must comply with all the rules – that includes providing a full transaction history promptly.
“We will be watching closely to make sure these leading names stick to their word and don’t let their customers down again. The Bank of Ireland, Monzo, Natwest Group, and Virgin Money should be in no doubt that the CMA stands ready to take further action if these failures are repeated.
Image source: gov.uk