Money management app usage increases during lockdown as trust in digital banking rises

OpenBankingExpo |

Lockdown restrictions have accelerated online and mobile money management with more than half (54%) of people now using them regularly. More than a third (36%) say they feel more comfortable using banking and money management apps since lockdown while a quarter (23%) say they trust them more than before lockdown.

Money worries may be one of the driving forces behind people seeking technology solutions to better manage their money. Four in ten (39%) feel “terrified” of the financial impact of a second peak of covid-19 while nearly a third (30%) of people across the UK are already preparing financially for a second lockdown. One in five (20%) are concerned their finances won’t last if the UK faces another lockdown. 

As a result, many people are turning to apps with more active functionality – such as those designed to help them manage debt, budget and save better. Since lockdown, almost one in five (17%) have started using an online banking service to help with these money managementgoals – such as Moneybox, Tully, Plum or Cleo. Take up among 25-34 year olds increase to 45%.

Increased mobile and online services usage is expected to continue after restrictions ease as more than two thirds (67%) of users plan to keep it up after lockdown. And nearly half (45%) say they would prefer if they could manage all of their personal finances by app.

Lubaina Manji, Senior Programme Manager, Nesta Challenges, said: “While the economic picture coming out of the pandemic seems bleak, it’s encouraging to see many people actively seeking out tech solutions to manage their money and preparing for further uncertainty. Lockdown has contributed to a stark rise in app, mobile and online usage, which is not only helping more people become tech savvy but increasing trust in these digital solutions. This is good news for an industry that is always innovating and pushing the boundaries to provide better products and services for customers.”

There are a range of apps and tools that can help people manage their money if they are concerned such as: 

  • Tully – A digital debt adviser for those struggling financially – providing online budgeting, debt advice, flexible repayments and money coaching to alleviate financial stress. 
  • Portify – Designed for modern workers with unconventional earnings patterns, this solution learns income patterns and spending behaviour to help prevent overdrafts and interest payments while offering a fee-free credit line.
  • Wagestream – Provides people with early access to earned wages to get emergency interest-free credit. Wagestream also offers financial education, savings and income smoothing.
  • Creditspring – An affordable credit subscription service offering small interest free loans for short term credit to help those with limited savings or persistent debt cope with unexpected expenses.
  • Updraft – Aimed at millennials, this is an alternative overdraft service that helps people with daily decision making to reduce overdrafts and credit card borrowing while increasing savings.

All of these solutions are finalists in the Open Up 2020 Challenge, run by Nesta Challenges in partnership with the Open Banking Implementation Entity. There are 15 finalists in total which have already received £50,000 in funding in addition to non-financial support to further develop their product and enable them to reach and help even more people across the UK. Three or four finalists will go on to be named winners in October 2020, receiving a further £150,000-200,000 each so they can help even more people to manage their money.

David Beardmore, Ecosystem Development Director, Open Banking Implementation Entity (OBIE), said: “These times of economic uncertainty are causing many to worry about their financial situations, and how they will make ends meet as well as preparing for the future. Faced with lockdown and long periods of isolation it’s more important than ever that people have access to technologies that make managing their finances easier. It is encouraging to see more people realising the help available to them through the many banking and money management apps. Over the past months, the financial services industry has risen to this challenge, using innovative open banking technology to deliver products that make a positive impact on people’s financial lives.”