New research from data enrichment and payment services platform Tink suggests that consumers in the United Kingdom who use digital financial management tools are better off. They average an additional £37.08 better off per month, or £4451 better off per year, compared to pre-adoption.
Today, as many as 7.6 million Brits are already using digital financial management tools, meaning this group is gaining up to a total of £3.384 billion collectively each year. If every person in the UK over the age of sixteen started using digital financial management tools, it would send £24.5 billion going into consumer wallets each year.
Tink’s research comes at a time when an estimated 75% of consumers surveyed across the UK say they are mindful about what they are buying because the cost of goods is so high.
When asked about personal finance goals for the year ahead, 49% of consumers surveyed said they wanted to build savings pots, 27% wanted to cut off unnecessary expenses, and 26% wanted to build an emergency fund.
Consumers use the money saved through digital financial management tools to work towards these personal finance goals: 39% used the extra funds to increase their savings contributions and 23% paid down their debt. This suggests a clear link between using these services and improved financial health.
Banks seeking a competitive edge can capitalize on clear consumer demand for digital financial management tools. Half of consumers (50%) would like their banking app to help them track spending on subscriptions, and 37% would like their bank to give them better visibility over their finances.
The survey also suggests some consumers are more likely to consider switching banks to gain access to better support and tools to help them manage their finances. Roughly 36% of respondents told Tink they would switch to another bank if it provided them with tailored support to meet their financial goals, while 32% would switch to another bank if it provided them with tools to track and manage their spending.
Respondents from a separate Tink survey of banking executives reported additional benefits from providing these services. Almost half (46%) of banks offering digital financial management tools reported increased ‘top of wallet’ behaviour in consumers such as greater card usage and higher payment volumes.
