Chapter Two

With widespread participation in digital banking among American consumers (chapter 1 of the series found that 7 out of 10 U.S. households report being enrolled in digital banking in Q3 2023), there are opportunities to provide traditionally underserved or hard-to-reach consumers with financial education to improve financial well-being.

Americans now have access to financial education and advice from a multitude of sources. However, there is a constant burden of discerning a digital source’s validity and relevance, which can create friction for consumers trying to effectively navigate and apply content in their lives. When consumers have higher levels of digital financial literacy skills, they are more likely to be prepared to engage with financial education content, discern the accurate from inaccurate, and employ useful behaviors to improve their financial health. 

“For many consumers, their daily finances and life priorities are constantly shifting,” said Shena Ashley, President of the Capital One Insights Center and Vice President of Community Impact & Investment at Capital One. “High rates of digital financial literacy enable consumers to navigate these changes - both routine and unexpected - so that they have accurate and timely financial information, and an understanding of how saving, spending, and borrowing impacts their life regardless of where they are on their financial journey.”

A new study from the Capital One Insights Center explores how differences in consumers’ digital financial literacy may impact where Americans look to find financial education content and tips, and who they trust to provide it. 

The survey found that 72% of Americans access financial education through online tools or digital platforms. The most commonly used digital platforms are search engines (25%), bank websites or mobile apps (25%), online videos (22%), and social media (16%). Trust in banks as a source of financial education is strong - about 84% of consumers who use their bank’s website or mobile app for financial education report that they trust the information. While some consumers also trust content from platforms such as TikTok, a larger portion trust the financial education provided by their banks.

These findings highlight an opportunity for purveyors of financial education to more effectively target content to consumers by ‘meeting them where they are’ across digital and social media platforms. More specifically, there is an opportunity for financial institutions, government agencies, regulators and technology companies to form a coalition focused on ensuring that the most credible financial education content accessed through digital channels is readily accessible to all. A coalition-based approach would support the need of ensuring that the most credible and accurate financial education content and sources rises to the top of search results across digital platforms and channels. 

The survey found that over 80% of consumers, regardless of their financial literacy levels, trust their bank’s website or mobile app to learn financial management concepts or tips.

While trust in financial management concepts from banks was high, trust in financial content found on social media varied by financial literacy levels. For example, less than half (45%) of consumers with higher financial literacy reported trusting content from TikTok, as compared to more than two-thirds of respondents (68%) with lower levels of financial literacy.

The high levels of trust that consumers place in bank-provided financial education show that financial institutions have the content and license to equip consumers with critical financial education content that consumers want and need. But of all respondents who have learned new financial management concepts in the last year, only one-quarter reported using their bank’s website or mobile app as a source. 

Despite growing evidence and deeply-researched studies that show greater amounts of misinformation online and across social media, many consumers continue to place strong trust in online content. Respondents with low levels of both financial and digital literacy are almost 10x more likely to believe all online content, as compared to consumers with high levels of financial and digital literacy.    

The survey found that younger consumers are more likely to agree that content found online is always correct, whereas older consumers tend to be more skeptical of content sourced from digital sources. This finding is consistent with other research, such as findings from the Federal Trade Commission that highlights how Gen Z are more likely than older adults to report losing money to fraud. 

Misplaced trust in online content creates an opportunity for search engines to prioritize accurate financial education content from credible sources, including banks, in their ranking algorithms in order to help combat misinformation. Prioritizing these opportunities could be particularly valuable on social media platforms like TikTok, where false financial concepts have consistently been reported and can have severe negative consequences for those most likely to seek them out and to believe inaccurate tips and suggestions. By elevating trustworthy financial content in search results, both search engines and social media platforms can ensure that accurate information reaches consumers in the digital sources they most use and trust.  

Nearly three quarters (72%) of consumers who reported learning financial management concepts and tips in the last year said they learned through a digital platform, while more than half (57%) used non-digital sources. Digital platforms include search engines, bank websites or apps, online videos and social media. Non-digital platforms include books, in-person classes, advice from financial advisors, and more.

Survey respondents reported using credit monitoring tools (26%), search engines (25%), their bank website or mobile app (25%), online videos (22%), and social media (16%). Across widely adopted digital platforms, consumers appear to engage with readily available financial education content at their fingertips. 

Our study found that Americans typically report using 2-3 different sources to learn about financial education topics, regardless of their rates of digital financial literacy. A fixed number of sources paints a narrower window of opportunity to reach consumers. Financial educators, from financial institutions to government and non-profit agencies, should focus their financial literacy content and deliver through digital platforms at greater scale - meeting consumers where they are already engaging.

While the vast majority of Americans (79%) reported an interest in learning financial education tips, only about half (55%) learned a new financial management concept in the past year. The gap between consumers who want to learn and those who have successfully accessed financial education suggests an unmet need for financial education content. As chapter 1 identified, many consumers have lower levels of financial literacy than digital literacy, suggesting that closing this gap between interest and learning could potentially help consumers’ navigate the digital financial landscape.

Financial educators must provide relevant content in relevant moments. Almost 85% of consumers reported seeking out financial education content during three specific moments in their own financial journey–actively trying to improve their credit score (43%), signing up for a new product (26%) and experiencing a major life change (19%). Educators, financial institutions and content creators must understand the life context and goals that consumers have top of mind during financial learning. 

The survey revealed high demand for financial education content, especially among younger consumers who are starting their financial journey.

Nine out of 10 respondents (88%) between the ages 18-24 reported learning financial management concepts in the last year. Among this group, 39% report learning as a result of experiencing a major life change - more than double compared to other age groups. These moments include going to college, moving away from home, and accepting a new job. Younger people also report learning to improve their credit score (51%) and/or while researching new financial products (32%).

Despite showing low levels of digital financial literacy, these consumers are actively engaged in learning. Three-quarters of all respondents with low digital financial literacy (73%) reported learning financial management concepts in the last year. Among consumers with lower levels of digital financial literacy who reported learning, about 43% reported regularly trying to learn new personal financial management, 41% want to learn to improve their credit, and 36% were researching new financial products. Their motivations suggest an earnest and active engagement to improve their financial literacy, though this group of consumers may be most susceptible to inaccurate financial education content, given their greater likelihood to believe that content found online is always correct. 

Whether consumers are starting their financial journey or improving it, providing financial education at pivotal moments through digital platforms, where consumers’ already engage, greatly enhances its relevance and impact. Financial educators should consider preparing content that tailors financial education to major life events and changes such as starting a new job or graduating college. Furthermore, educators can also provide resources at earlier moments, to help consumers navigate their unique financial goals such as opening a new financial product or improving their credit.

It should be no surprise that in today’s digital age, consumers have turned to digital platforms as their primary source of financial education content and tips. Whether through social media, search engines, or bank mobile apps, Americans are seeking financial education in the same digital platforms they use for other everyday activities or tasks. While banks are seen as a highly trusted source for financial education, they are often not the first place consumers turn to in the digital landscape. 

To ensure consumers are accessing reliable and accurate financial education information, educators and providers should feature content on digital platforms where consumers spend their time. There is a large opportunity to harness the reach of social media, in particular, to provide accurate and trustworthy financial education to diverse audiences, especially younger consumers who are more likely to need, search for and believe the information they find online.

Additionally, highly credible and trusted providers like banks and government agencies, should optimize financial education content for search engines. Consumers frequently use search engines for their financial questions, so ensuring that trustworthy content ranks highly in search results is essential for reducing the risk of misinformation and helping consumers make informed and beneficial financial decisions. This presents an opportunity for a coalition-based approach among financial institutions, government agencies, regulators and technology companies to ensure credible financial education is readily accessible to all. Ultimately, financial education must evolve to meet consumers’ digital habits, including the content, format, messaging and sources.