Prosper Publishes Financial Wellness Study: Americans Struggle with Money but Fintech Can Help

Prosper Marketplace has published a survey on the “Financial Wellness” of the nation.  According to Prosper, their metrics indicate that nearly 60% of the population does not have “financial freedom” and manystruggle  to accomplish their financial goals. The survey included 1,000 Americans, aged 18 or older with decision-making power regarding their finances. Prosper stated, “the results underscore the struggle many Americans face with their finances on a daily basis, and show that improving financial wellness is a top priority in 2016 and beyond”.  Prosper is a leading marketplace lending platform that primarly services consumers looking to refinance burdensome debt at lower rates.  But Prosper is just one of many Fintech firms seeking to provide better, less costly and more efficient financial services for the masses.

Aaron VermutAaron Vermut, CEO of Prosper, said their research indicated that while the economy had pulled out from the worse elements of the Great Recession, many Americans struggle to get ahead – and stay there.

“With the current economic volatility, the power of having a clear plan in place—whether that be consolidating debt at a lower, fixed rate; cutting expenses; or creating a better strategy for saving—is instrumental in helping people feel in control of their finances,” said Vermut.

 

The Prosper data states;

  • only 29% of people feel very strongly that they are in control of their finances, and
  • nearly 50% are living paycheck to paycheck.
  • Over 50% of survey respondents said they could not absorb a financial shock. The group most likely to be impacted—Americans over 55 years old—are the most worried about their financial future, Millennials feel more secure in their finances.
  • Over 50% have less than $5,000 in their checking or savings accounts, and  more than a third have less than $1,000.
  • 60% of Americans have credit card debt and a majority of this group are going deeper into debt by not paying them off in full each month.
  • A full 22 percent do not even think about their long-term stability.

In this presidential election year, Prosper states that US citizens are determined to take control of their financial future. Of course saying and doing are two very distinct things.

According to Prosper;

  • Debt relief is ranked as a top priority (44%) for improving standing, closely followed by consistent progress in paying off debt (34%)
  • 38% of survey participants said they currently have a financial plan for themselves; another 23% claim to be making financial plans during the year
  • 30% of survey participants currently contribute to their 401(k) plan; an additional 28% will be doing so in the near future.
  • Owning life insurance (30%), investing in stocks (29%) and contributing to a 401(k) (28%) also emerged as top next steps survey participants intend to take.

Screen Shot 2016-02-09 at 10.31.22 AMFintech, along with marketplace lending platforms, remain an opportunity for many consumers to accomplish their financial goals.  It is interesting that awareness appears quite high in the Prosper survey results.

 

  • 65% of surveyed consumers are currently using technology to improve their financial well-being
  • The majority of respondents use between one and three applications to manage their financial lives, and most use those apps at least a few times a week.
  • 18% of people who are not currently using online apps or sites for finances say they plan to do so.

Prosper drives the bulk of its business by providing consumers with more affordable credit. Typical credit cards charge ridiculously high interest rates. Prosper may help some consumers easily refinance high interest rate debt online.

 

 

The summary report is embedded below.