Equipping Consumers with Digital Financial Literacy Skills

Financial well-being allows consumers to feel in control over their finances, giving them the ability to stay on top of their financial goals while also being able to absorb a financial shock or unexpected life event.

Financial literacy — understanding concepts like budgeting, saving, investing, building and improving credit, borrowing, and repaying debt — plays a key role in attaining financial well-being. 

Digital tools that allow consumers to use technology to manage their money are critical tools that further foster financial well-being.  

“Mobile banking and access to digital wallets play an increasingly important role in building financial well-being, managing finances, and being part of the modern-day economy,” says Adam Davis, Vice President of Financial Health, Inclusion, and Liquidity at Capital One. “Digital literacy, combined with access to digital tools, enables lower- and moderate-income consumers to participate in the economy and manage their finances in a way that might not have been possible in the past.”

Online and Mobile Knowledge Are No Longer Barriers to Banking for Majority of Americans

The Capital One Insights Center recently released new research examining digital financial literacy - the combination of core financial knowledge, knowledge of and comfort with digital tools, and the ability to protect oneself online from financial scams and other attacks - skills across users of all ages. The study surveyed 3,000 consumers nationwide in August and September of 2023. 

Its 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. 

• 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. 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 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.” 
• 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.

Partnering with Khan Academy to Offer Free Financial Literacy Courses

Recognizing the pressing need for access to free financial education, Capital One joined forces with Khan Academy, a leader in online learning. This partnership helps consumers to become financially empowered through a free, self-paced online financial literacy course.

The Financial Literacy course breaks down complex financial concepts into a series of self-paced units, including: 

• Budgeting and Saving    
• Investments and Retirement
• Consumer Credit             
• Scams and Fraud
• Setting Financial Goals                  
• Careers and Education
• Loans and Debt                 
• Taxes and Tax Forms
• Insurance

Each unit is designed to give consumers the skills and tools they need to take charge of their finances through individual lessons that include engaging instructional videos, articles, and exercises — all in one easy-to-access online platform. 

Capital One also offers other free products and services designed to support financial well-being including:

• CreditWise from Capital One: Empowers people with the tools to effectively monitor their credit.
  • Available to any adult in the U.S. with a social security number and a bureau report, this tool includes targeted advice and alerts to help individuals monitor their credit. 
• The Money & Life Program: Offers self-guided exercises, mentoring, and on-demand workshops available online and in our Cafés to help support financial well-being, regardless of whether the individual banks with Capital One or not.
  • Resources include: 
    • Money Mentoring: Participants receive three, 60-minute 1:1 sessions with a certified Money & Life Mentor to help evaluate current behaviors and meet financial goals
    • Money & Life Exercises: Self-guided exercises for participants to help map their spend, visualize their current spending habits and adjust where needed
    • Money Workshops: Tailored sessions with certified Money & Life Mentor are available for individuals or groups, so students can bring their study partners
• SpringFour: Capital One joined forces with SpringFour to connect individuals to local, nonprofit, and government resources that can help people save money and live a better financial life. SpringFour’s free online tool makes it easy for individuals to find organizations that they can contact to see if they qualify for assistance. 
• Pre-approval tools: This allows customers and potential customers to navigate possible credit choices without impacting their credit score.
• Credit cards that could help build credit: Student and Secured credit cards may be used to establish or build credit by using the cards responsibly. Responsible card use includes making on time payments, paying more than the minimum amount, and staying below your credit limit. 

What They’re Saying: Capital One Convenes Lawmakers and Experts to Discuss Financial Literacy 

Capital One recently partnered with POLITICO to convene Members of Congress, regulators, financial institutions, and nonprofits to discuss how to improve financial literacy education for all. The event was later followed by the Financial Literacy Resource Fair hosted by Reps. Joyce Beatty (D-OH) and Young Kim (R-CA), where Capital One engaged Members of Congress and Congressional staffers with Financial Well-Being resources. 

“Regardless of your background, or what zip code you live in, you should not be discriminated against any access to capital, just because you don't know what resources are available,” says Young Kim (R-CA), Member, House Financial Services Committee and Co-Chair of the House Financial Literacy Caucus. “All Americans should be aware of their finances so they can take better control of their future and live the American Dream."

Additionally, Capital One signed its support for the Young Americans Financial Literacy Act (H.R. 2821), authored by Rep. Andre Carson (IN-07), which establishes a Consumer Financial Protection Bureau (CFPB) grant program to support research, development, planning, and implementation of effective financial literacy education programs for young Americans and their families.

Supporting Organizations Committed to Expanding Digital Financial Literacy

Capital One also provides grant funding to organizations that seek to help individuals across the U.S. improve their ability to leverage digital tools to manage their money.

Those organizations include:

American Library Association (ALA): Capital One supports ALA’s Community Connect Program, an initiative that offers grants and resources to help support digital access and financial capability in rural communities nationwide. The selected libraries represent 14 different states and serve communities with an average population of 8,000.

The program's first iteration provided 20 rural public libraries with five Wi-Fi hotspots (including service contract) for lending to patrons, a stipend to support implementing financial capability programs, curated book lists, and more. The second stage, Community Connect: Fostering Digital Access, built off this work by providing rural libraries with the necessary resources to help community members establish and sustain home internet connections.

Since November 2020, sites have lent out hotspots more than 2,200 times. 

GreenPath: For more than a decade, Capital One has supported GreenPath’s credit counseling services, supporting more than 20,000 participants.

This organization empowers people to lead financially healthy lives through providing education and counseling in debt and credit management, student loans, homeownership, and foreclosure prevention.

Many of Capital One’s efforts to support digital financial literacy are made possible through the Capital One Impact Initiative — a multi-year commitment that strives to catalyze economic growth in low- and moderate-income communities and close gaps in equity and opportunity.