CBA - Consumer Bankers Association
04/23/2024 | Press release | Distributed by Public on 04/23/2024 16:47
Capital One’s Insights Center Releases Survey Data to Drive Digital Financial Literacy
"Financial literacy is key to owning our financial lives and futures," says Adam Davis, VP of Financial Health, Inclusion, and Liquidity at Capital One. Capital One has been focused on educating consumers, fostering financial literacy, and deploying digital tools so users can leverage the boom in online financial management to achieve their financial goals. Last month, the Capital One Insights Center released new research on consumers' financial and digital literacy rates. The survey engaged 3,000 consumers across the United States, measuring digital literacy by evaluating digital safety knowledge; it evaluated financial literacy through core financial concepts like credit, debit, and interest.
Older Americans Have Higher Digital Financial Literacy
The survey found that most Americans (86 percent) understand one of the key pillars of digital literacy - how to protect themselves and their information online. However, far fewer Americans possess basic financial knowledge. More than 40 percent of respondents struggle with basic knowledge, such as managing debt and building credit. Only about 55 percent of Americans are both digitally and financially literate, with older Americans scoring high in both categories, demonstrating that Americans are gaining more digital financial literacy as they age.(See figure below.)
Though younger Americans are more digitally savvy, there is a gap between younger and older Americans when it comes to financial knowledge. The Insights Center's study shows the importance of impressing financial literacy on younger consumers and that the key to greater financial knowledge could lie in many of the same digital channels they already use in their daily lives.
Most Americans Prefer to Bank Online
The survey also found that most Americans prefer to use a mobile app or website for their banking needs. Even those who scored low on digital literacy are strongly inclined to do their banking through digital tools, with 45 percent of respondents preferring mobile apps and another 19 percent preferring to access services through a website. (See figure below.)
Overall, roughly 86 percent of consumers who use digital banking check their balances and transactions digitally, 77 percent pay their bills digitally, and 60 percent transfer money digitally.
Additionally, consumers use online financial management tools to monitor credit scores or manage budgets and subscriptions to help improve their financial health. The survey uncovered an opportunity for education among Americans who scored low on financial literacy: these individuals also often use online financial tools, indicating a willingness to learn more about how to be more financially responsible.
Dive Deeper
Based on the survey's findings, the Insights Center encourages financial educators to meet consumers where they are, especially because consumers of all digital and financial literacy levels indicate that they prefer to manage their finances online. Capital One has partnered with Khan Academy to offer free online financial literacy courses to help bridge this gap.