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Benchmarking the digital and financial capability of UK consumers

Key findings and analysis of the Lloyds Bank Consumer Digital Index 2016

Overview

The Lloyds Bank Consumer Digital Index 2016 has revealed that there are potential annual saving opportunities for UK consumers of at least £3.7bn if the unbanked and digitally excluded were to fully realize the online savings potential unlocked through greater digital engagement. The Index, created in partnership with Accenture, Lloyds Banking Group, Toynbee Hall and Go ON UK, analyzes consumer trends in digital and financial capability and seeks to understand the links between the two from a UK-wide perspective.

This analysis, which considers the behavioral data of one million consumers from a UK representative population, also reveals:

  • Highly digitally capable consumers are also typically more financially resilient, making savings deposits of four times more value a month than less digital counterparts.

  • Eighty-six percent of people who manage their money online report they “worry less” because they can track their finances.

  • Digitally capable consumers also enjoy a digital dividend—70 percent say the Internet helps them save money and report an average annual saving of £744 on their spending due to digital discounts.

The Index findings point to the need for digital and financial institutions to use online money saving as a universal call to action. Digital is a key opportunity for people with low financial skills and the financially excluded, to help manage and save money.

DOWNLOAD THE FULL REPORT [PDF]

Key Findings/Analysis

Lloyds Bank UK Consumer Digital Index

Key revelations of the Lloyds Bank Consumer Digital Index 2016:

  • Asked where they are making the greatest online savings, 82 percent of internet users stated they save on holidays, followed by insurance premiums (79 percent).

  • Financial capability increases with age, while digital capability does the converse; consumers aged 40-49 are at the equilibrium of financial and digital capability.

  • Highly digitally capable consumers save 50 percent more frequently than peers with low-digital capability–they also save four times the value.

  • Ninety-six percent of consumers using Internet banking say they value the ability to manage their money 24 hours a day, 7 days a week.

  • The digitally excluded consisted mainly of older people, with 59 percent being aged 60 or over, making age a key factor in determining attitudes toward Internet use.

Recommendations

The Index reveals some key opportunities for policy makers and practitioners alike:

  • Raise awareness of the digital dividend

    The index shows that people can save significant money when using digital–irrespective of their financial wealth. Digital and financial stakeholders should therefore raise awareness of online tools and the opportunities to save money online, i.e. the digital dividend, with all of their colleagues, customers and communities.

  • Promote increased access to welfare and banking services

    There is an increased move to digital delivery of welfare services (such as universal credit payments) as well as the delivery of banking services. To ensure customers have full access to these income streams and services, digital and financial stakeholders need to promote the digital imperative.

  • Drive financial and digital capability skills by mobilizing Generation X as champions

    The index shows that Generation X–40-49 year olds–in particular are benefitting from both digital and financial capability. Generation X should therefore be mobilized to pass on skills and knowledge to other generations, younger and older. Go-ON.co.uk and Learnmyway.com have advice and training on how to become a digital champion.

  • Maximize Fintech opportunities

    Banks and Fintech startups need to collaborate to find innovative solutions for consumers with low capability. This will support the development of new products and services for customers, bringing together the experience and scale of banks with the agility and ingenuity of startups.

DOWNLOAD THE FULL REPORT [PDF]

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