How digital finance tools could boost UK consumer wealth by £24.5bn

By Puja Sharma

The article highlights the significant financial benefits that UK consumers could gain by adopting digital financial management tools. Currently, 7.6 million Brits using these tools report being £445 better off per year, amounting to a collective gain of £3.38 billion annually. If everyone over 16 in the UK adopted these tools, the total potential gain could reach £24.5 billion per year.

The research shows that during the ongoing cost of living crisis, many consumers are turning to these tools to improve their financial health. They use the money saved to build savings, pay down debt, and cut unnecessary expenses. The article also suggests that banks offering these tools could see increased customer loyalty, as consumers express a willingness to switch banks for better financial management support.

New research by Tink, a data enrichment and payment services platform, reveals that UK consumers utilizing digital financial management tools are experiencing significant financial benefits. On average, users are £37.08 better off each month, translating to an annual saving of £445 per person compared to their financial status before adopting these tools. With approximately 7.6 million Brits currently using such tools, the collective savings amount to a staggering £3.38 billion each year.

The research further suggests that if every UK resident over the age of sixteen adopted these tools, it could potentially inject an additional £24.5 billion into the economy annually.

Digital Tools as a Financial Lifeline Amidst Rising Living Costs

The report highlights that three-quarters of UK consumers are increasingly cautious about their spending due to the soaring cost of living. Nearly half of those surveyed expressed a desire to build their savings in the coming year, while more than a quarter are focused on eliminating unnecessary expenses or establishing an emergency fund.

The benefits of digital financial management tools extend beyond mere savings. Over a third of users (39%) have funneled their extra funds into savings, while almost a quarter (23%) have used the savings to reduce debt, showcasing a direct link between these tools and enhanced financial health.

Banks: The Next Frontier for Digital Financial Tools

The study underscores an opportunity for banks to leverage consumer demand for digital financial management tools. Half of the respondents expressed interest in banking apps that help them track subscription spending, while over a third desire better overall financial visibility from their banks.

Furthermore, a significant portion of consumers indicated a willingness to switch banks for better financial tools: 36% would consider switching for more personalized financial support, and 32% would switch for better tools to manage their spending.

Banks that offer these services are also witnessing increased customer loyalty and engagement. A separate survey by Tink involving banking executives revealed that nearly half (46%) of banks providing digital financial management tools saw an increase in customer card usage and payment volumes.

Jack Spiers, UK&I Banking & Lending Director at Tink, emphasised the dual benefits of these tools: improved consumer financial health and a competitive edge for banks. He noted that these tools not only contribute to better financial management but also enhance overall wellbeing by reducing stress and freeing up time previously spent managing finances.

In a highly competitive retail banking landscape, offering digital financial management tools presents a unique opportunity for banks to differentiate themselves and meet evolving consumer expectations.