The bulk of young, digitally-connected people in South Africa want banks to provide them with more financial education to enable them to manage their money better.
This is according to the first banking habits survey conducted by market insights agency Brands Laduma. While the 18 to 24 year category showed a 44% inclination towards using their peer and family groups to assess available financial products, and the 25 to 34 year category showed a greater financial awareness, across both age groups, the need for greater financial education measured at a significant 90%.
“The survey suggests very strongly that people still rely heavily on the opinions of friends and family when choosing their banks,” says Brands Laduma research manager Piet Geustyn. “Even though this community support is important, there is a much greater need for better financial information, so people can make better-informed choices.”
The need to equip people to make good financial decisions made even more sense as people got older, continued Geustyn, since up to 50% of people older than 35 years regularly used credit to buy necessaries like food and clothes to support their families.
While digital innovation is giving consumers more ways of accessing their bank accounts, up to 57% of the surveyed people preferred direct contact with another person when finding out about new financial products, or just expanding their financial education. This strongly suggests that banks should still consider good banking consultants to be a strong attractor of clients.
“We conducted the research right across the country amongst our community members who have mobile and online access. The 18-question survey took just five minutes to complete and we saw very good participation rates for this kind of exercise, with an 88,3% completion rate,” says Geustyn.
The survey also shows South Africa’s unique ‘Ubuntu Millennials’, who are both as digitally-savvy and connected as their counterparts in the developed world, but still rely on traditional community support. The community ties also extend to financial responsibilities, with these millennials often having to contribute financially to help their cash-strapped families. These responsibilities extend as they age, which contributes to their debt burden. As a result, many rely on short-term loans to help manage all their obligations and they were also very sensitive to the benefits that financial products extend in order to maximise value.
“Our survey shows the tremendous amount of financial pressure that young people especially are under,” says Brands Laduma CEO Peter du Toit. “They know this, and will naturally bank with the financial institution that is willing to help them manage their money as best they can. It’s a wake-up call for banks. People want education, not just flashy advertising.”
