Already scarce, financial literacy in America is declining, with many people unable to understand concepts like inflation or compound interest.
That’s according to a Sunday (Nov. 20) Financial Times report, which cites an investigation by FINRA, the Financial Industry Regulatory Authority. In 2009, the report says, the average person who answered FINRA’s financial literacy survey could answer three out of five questions.
Last year, the number had dropped to 2.6 questions, with only 4% of respondents able to find the correct answer to all five questions.
These numbers have real-life implications as consumers face record inflation, forcing them to stretch their dollars and struggle to rework household budgets.
Speaking to PYMNTS’ Karen Webster earlier this month, Banyan CMO Andrea Gilman and Copper CEO Eddie Behringer said financial institutions (FIs) and FinTechs could turn item-level data into new opportunities for customer engagement as offers match spend. The same information can help households manage their cash flow more efficiently.
This is especially helpful for members of Generation Z, who, along with their parents, see the value of payment tools that can help them manage their spending and develop financial literacy.
“This is really the first generation that has been hyper-tuned to the mistakes of past generations,” Behringer said in an October conversation with Webster that reflected on the spending habits of yesteryear. “[They think] it’s great to be smart with money,” he added.
FinTechs like Copper, which offers parentally supervised banking services to younger consumers, such as personalized debits, are also “data-ready,” Behringer said, and are looking to use that receipt-level information to guide families toward styles of healthier financial lives. Copper told Webster retailers would also do well to take advantage of item-level information to offer targeted, personalized offers to these younger consumers, whether they’re shopping online or out.
Teenagers and Generation Z, said Behringer, “vote with their dollars. They have awareness and affinity for the brands they buy from and the products they buy.”