Six months into COVID-19 and the entire British economy continues to be completely upended. Entire sectors have collapsed, businesses have furloughed staff, salaries have fallen or stagnated and public debt has topped lb2 trillion for the first time ever. It has led to the UK getting into its largest recession on record having a 20.4% slump between April and June.
While there's hope that the economy will start to recover following the easing of COVID-19 restrictions, the impact of those early stages of lockdown will still be felt for some time to come. Indeed, once the furlough scheme ends in October, you will find fears that as much as two million jobs could be lost.
With so much uncertainty in news reports right now, money worries have become increasingly common. For young people, in particular, the danger of salary cuts and layoffs have exacerbated financial woes. Based on a brand new report, from MullenLowe Profero together with Censuswide, into the financial wellbeing of young people during the pandemic, 40% of 18-25-year-olds are sometimes afraid to even look at their bank account.
Education, Education, Education
During the pandemic, banks have stepped directly into provide financial support. Acting quickly in lockdown, many introduced a raft of new measures including cash delivery services, additional training and telephone support to assist customers change to online banking. In partnership with the government, banks also helped businesses survive the ongoing crisis by launching COVID-19 support packages.
For young people, however, the measures don’t appear to have hit the objective, with the same report revealing that half of young people’s concerns around managing their finances has increased since the pandemic. The survey discovered that the majority of 18-25 year olds think that banks can alleviate their financial concerns by better understanding their spending, helping them create better money management habits and making them feel safe from fraud.
In order to address these concerns, banks therefore need to look to supply more educational support for his or her customers about how exactly they can make a good financial decisions. This means designing tools and creating support services to enable customers to effectively manage their finances. Schemes such as online workshops will help build young people's money knowledge, skills, and mindsets, for instance.
With the pandemic radically shaping habits, educational services need to adapt and move online. While consumers previously may have preferred to discuss financial matters personally in a bank branch, chance of herpes and the widespread use of digital tools have meant that people are increasingly looking online for support.
The advantages of educating customers
Proving educational services, doesn't only help young adults throughout a pandemic, it also helps banks in the long term. Giving 18-25 year olds the various tools to create better financial decisions with easy and straightforward guidance will increase their chances of surviving the pressures of recession. For banks what this means is they'll become better customers and lead to an increase in using other services and products such as mortgages and investments that produce revenue for banks long term.