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UK citizens who are “terrified” by the potential impact of a second wave of Covid-19 infections are turning to mobile money management apps to help them get their finances in order.
The use of mobile money management apps has accelerated during the lockdown as people prepare for the worst, according to research commissioned by global innovation foundation Nesta.
The research found that more than half (54%) of Brits now regularly use mobile apps to manage their money after take-up increases during the lockdown boosted confidence and trust.
According to the survey of 2,000 people carried out by Opinium, 36% now feel more comfortable using banking and money management apps and 23% trust online banking more since lockdown.
“With many struggling financially, the use of these apps is important to help people make the most of their money,” said Nesta.
The survey found that 39% of people are terrified about the possible impact of a second peak of Covid-19 on their finances. It found that 30% are already preparing financially for a second lockdown, with 20% concerned that their finances won’t last if it happens.
Major global events such as the coronavirus pandemic shape changes in society and business. For example, had it not been for the global financial crisis of 2008, many of today’s fintechs might not be around. It was a combination of traditional banks cutting back their services and consumers looking for alternatives that created an audience for fintech.
Once people get used to using banking methods such as mobile money management apps, they are likely to continue using them when things get back to normal.
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Lubaina Manji, senior programme manager at Nesta Challenges, said: “While the economic picture coming out of the pandemic seems bleak, it is encouraging to see many people actively seeking out tech solutions to manage their money and preparing for further uncertainty.
“The lockdown has contributed to a stark rise in app, mobile and online usage, which is not only helping more people become tech savvy, but is 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.”
David Beardmore, ecosystem development director at the Open Banking Implementation Entity, 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 is more important than ever that people have access to technologies that make managing their finances easier.”
Fintech entrepreneur Matthias Kroener, who founded an early challenger bank, said there will be a much bigger consumer audience for digital services once the pandemic had passed.
“Due to new ways of working and living during the pandemic, digital living is not a myth any more,” he said. “Even people who had never done a video conference before now know Zoom.”
Kroener added that the pandemic will influence the next round of fintech innovation.