Financial education doesn’t work and instead firms should work on speaking in plain English to their customers, FinTech leaders believe.
In a roundtable hosted by Mouthy Money, in association with MRM Communications, FinTech leaders said that the industry should abandon calls for the Government to increase financial education in schools.
Instead, they said, financial firms should just cut out the jargon and speak to their customers in a clearer way.
The panel included firms Lendwise, Moneyhub, OpenMoney, PensionBee, Plum and Wombat Invest.
Samantha Seaton, chief executive, Moneyhub, claimed that financial education ‘doesn’t work.’
She added: “I don’t think we should try and educate anyone. It doesn’t work. If you’re selling financial products, with the technology we have available, surely we can just make sure we get it right.
“I honestly don’t think education’s the answer. But let’s not also confuse education with transparency. The latter is vital and we need to give people the facts.”
Jonathan Lister, chief technology officer, PensionBee believes that the power of data can help consumers make easier, clearer choices:
“If you can bring the data together – and get the algorithms to present the options – then the role of education in FinTech is to describe what the real-life implications are on an individual.
“Much of this is in the future but the potential is clearly there. And this is another reason why the banks haven’t done well because they don’t analyse the data and apply it to their customers’ lives properly.”
Anthony Morrow, founder, OpenMoney, adds: “I think the issue about education and engagement is more that bank terms and conditions are Byzantine in their complexity – and they’re asking lay people to read them and make a decision with huge implications.”
Commenting on financial education, Mouthy Money co-editor Edmund Greaves says:
“We’re often told that there isn’t enough financial education for kids, and many people lament not having been taught about credit cards and mortgages by our teachers at school
“But our panellists are of the view that this isn’t necessarily an issue of education, more an issue of clarity from financial providers, and a lack of provision of products that make sense.
“I very much agree with this sentiment. Ultimately a mortgage is just a loan to buy a house. If a financial firm chooses to make its mortgage so complicated that a normal person can’t understand it, whose fault is that?
“Blaming the education system is an easy scapegoat for what really needs to happen – more transparency, and more financial products that don’t require a maths degree to understand.”
The Mouthy Money FinTech Roundtable report contains a wealth of views from our panel. Read the full article on financial education on Mouthy Money here.
To get a full copy of the report, please get in touch.
For further information, please contact:
Edmund Greaves Co-editor
020 3326 9900
078 2481 4326