86% of Americans, including older consumers,
are digitally literate and well-equipped to use digital platforms
to meet their routine banking needs
Despite high rates of digital literacy, 40% of
consumers still lack basic financial knowledge
MCLEAN,
Va., Feb. 7, 2024 /PRNewswire/ -- The Capital
One Insights Center today released new research finding that
digital financial literacy increases with age, noting that 74% of
consumers over 65 rank highly on both digital and financial
literacy compared to only 28% of those ages 18-24. The report
defines digital literacy as understanding a combination of basic
financial knowledge and being able to protect oneself online from
phishing attacks and other financial scams.
Consumers of all ages continue to struggle with financial
literacy, the report shows, with more than 40% of consumers lacking
basic financial knowledge.
"BANKING IS DIGITAL – from paying bills to
checking bank balances, people are managing their finances online,
making digital financial literacy skills critical for consumers,"
said Shena Ashley, President,
Capital One Insights Center and Vice President, Community Impact
and Investment. "Even though an overwhelming majority of
Americans are regularly banking online, too many still lack basic
financial knowledge and skills. Capital One is committed to working
with stakeholders in the public and private sector to identify and
advance solutions to address knowledge gaps."
The Capital One Insights Center surveyed 3,000 consumers across
the U.S. from August to September of 2023. The study's key findings
include:
- Nearly 86% of Americans know how to protect themselves and
their personal information online. However, more than 40% of
consumers lack basic financial knowledge, like how to manage
debt or build credit. Previous research has shown that financial
literacy improves financial well-being.
- Despite high digital literacy scores, lower financial
literacy means only 55% of consumers are digitally financially
literate. These digitally financially literate consumers
understand a combination of basic financial knowledge and can
protect themselves online from phishing attacks and other financial
scams.
- Digital financial literacy increases with age. Older
consumers ranked higher in both digital and financial literacy. Of
the 65+ population, 74% rank highly on both digital and financial
literacy, nearly three times higher than the 18-24 year old
population.
- Consumers prefer to bank online. Even among consumers
who scored low on both digital and financial literacy, 45% said
they prefer managing their finances through a mobile app, 19%
prefer using a website, and only 9% prefer going to a bank
branch.
- Consumers are banking online regularly. 70% of U.S.
households report being enrolled in digital banking for some or all
of their accounts. Among consumers who are enrolled in digital
banking, 95% said they bank online "often" or "occasionally."
The report comes at a time when many states have moved to
mandate that high school students take financial literacy classes
before graduation. However, most curricula do not include courses
for financial education that focuses on online and mobile money
management. The report's findings suggest it is critical to invest
in digital financial education to help young adults navigate the
digital world. Capital One partners with Khan Academy, a leader in
online learning, to offer free online financial literacy courses
for all ages. Online financial education–or a combination of
digital and financial literacy training–might attract and retain
more learners.
"Financial literacy is key to owning our
financial lives and futures," said Adam
Davis, Vice President, Financial Health, Inclusion, and
Liquidity at Capital One. "But consumers increasingly say they
prefer managing their finances online, so the question we should be
asking is how can we help them master financial literacy in a
digital environment."
Click here to read the full study.
About Capital One Insights Center
The Center combines Capital One research and partnerships to
produce insights that advance Capital One's Impact Initiative. As a
platform for data and dialogue, the Center strives to
help changemakers create an inclusive society, build thriving
communities and develop financial tools that enrich lives. The
Center draws on Capital One's deep market expertise and legacy of
revolutionizing the credit system through the application of data,
information and technology. Learn more about the Insights Center
here.
Methodology
Capital One's Digital Financial Literacy Index is a nationally
representative, self-reported, anonymous survey of 3,000 randomly
selected adults in the US. Participants were surveyed between
August and September 2023.
All data in this report is from self-reported, anonymous
research of U.S. consumers broadly, not specifically from or about
Capital One customers or employees.
Respondents were asked a series of questions about financial
literacy, digital literacy and digital banking behaviors. To
measure financial literacy and digital literacy, the Insights
Center used well-tested and validated questions pulled from other
reputable studies.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/new-research-online-and-mobile-knowledge-are-no-longer-barriers-to-banking-for-majority-of-americans-including-most-seniors-302055450.html
SOURCE Capital One Financial Corporation