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Practice Management

Financial Savvy and the Use of Digital Tools

Ted Godbout

After a year in which many consumers had to rely heavily on digital tools for their financial needs, self-reported “financial experts” use digital tools more often than others, a recent survey finds. 

According to KeyBank’s 2022 Financial Mobility Survey, 4 in 10 Americans say that access to digital banking tools make them feel empowered to take control of their finances, the highest-reported feeling among respondents. 

Self-reported financial experts, who more heavily relied on digital tools this year, are more likely to say they are very confident in growing their finances (71%), when compared to those who report being less savvy and have less experience with digital banking tools.

The survey is based on a poll of more than 1,000 Americans on their financial and work-related priorities after more than a year of living through a pandemic, revealing the steps they have taken to become more financially mobile.

Additionally, one in four survey respondents (23%) say they have more experience with digital banking in 2021 versus 2020. Of those survey respondents who report their financial savviness as “expert,” nearly half (44%) say they relied more on digital banking tools in 2021 than the year prior.

Comparatively, of those who report their financial savviness as “savvier than most,” “somewhat savvy” and “not financially savvy,” just 24%, 18% and 17%, respectively, say they relied more on digital banking tools in 2021 than the year prior.

Survey respondents who identify as “financial experts” are surprisingly more likely to also say they have made a financial faux pas—highlighting a connection between financial experience and confidence. These so-called financial experts’ top three financial faux pas include spending their tax return instead of saving, reacting to market volatility and relying on nonexperts to make decisions, the study notes. 

“The growth in adoption of digital banking tools among consumers further solidifies their mindset of feeling savvy and confident in managing their own finances, while also looking for ease of access and efficiency of doing it at home or on-the-go,” said Jamie Warder, Executive Vice President and Head of Digital Banking at KeyBank. “As we continue down the path of digitally rooted banking experiences, it’s important for banks and financial institutions to push for education and adoption among all demographics, so no consumer is left behind.”

‘Phygital’ Approach

As such, while the pandemic accelerated the adoption of online and mobile banking, the findings of KeyBank's study also show that consumers are continuing to seek guidance from trusted financial advisors to help chart a path forward, while still leveraging technology-enabled services to move up the wealth spectrum.
Interestingly, Millennials and Gen Zers prefer a combination of digital and in-person interaction more often than older Americans, who would rather exclusively use digital tools—a surprising discovery for technology-forward younger generations who often identify as digital natives.

“Over the past year, we have seen our clients increasingly crave digital support, but the broader truth remains: We have to meet clients where they are on their individual journeys,” said Justin Hunsaker, Senior Vice President and Head of Digital Wellness and Originations at KeyBank. “For some clients, that will mean a fully digital solution, while others will want in-person expert advice. For most, the best solution will involve combining both digital and in-person financial choices for a seamless banking experience, rather than friction and confusion that having separate options may cause.”

And despite the disparities in perceived financial savviness and financial confidence, Americans across the board report that the number one thing that made them feel financially resilient during the pandemic was financial information, KeyBank notes. 

To that end, more than half (53%) report that they have become more financially aware due to challenges faced in 2021. In addition, more Americans are reporting that they identify and prioritize needs versus wants and determine a monthly budget to revisit on a weekly basis—and access to financial information is crucial to making these spending/budgeting determinations, the study notes. 

The survey was conducted online between Sept. 30 and Oct. 2, 2021, by Schmidt Market Research among 1,081 Americans, ages 18-70 with sole or shared responsibility for household financial decisions, who own a checking or savings account.