How Teengle Enhances the Financial Inclusion of Teens?
February 21, 2023
The Crucial Importance of Financial Inclusion
Financial inclusion refers to the process of providing access to affordable and appropriate financial services or products offered by banks, fintech companies and financial institutions to all individuals, regardless of their income level or social status. These products can include the use of credit cards, debit cards, bank accounts, savings accounts, online transaction, mortgages, loans and insurance.
Financial inclusion is crucial as it has the potential to significantly improve the living standards:
- Poverty Reduction: It can help lift people out of poverty by providing them with access to financial services that enable them to save, borrow, invest and manage their money.
- Economic Growth: It can help stimulate economic growth by enabling individuals and businesses to access credit and other financial services, which in turn can help them to start or expand their businesses, create jobs, and contribute to overall economic development.
- Equality and Social Justice: It can help reduce inequality and promote social justice by providing access to financial services for underserved and marginalised groups, such as women, rural populations, and low-income households.
- Financial Stability: It can contribute to financial stability by providing a means for individuals and businesses to save and access credit, which can help them to better manage financial shocks and avoid falling into debt traps.
- Improved Education and Health: It can improve access to education and healthcare by providing individuals and families with the means to pay for these services.
Financial confidence is an increasing concern
However, in the current state, it is reported that less than 2 in 5 teens feel confident about managing their own money. Even less, only 3 in 10 consider themselves educated regarding financial products and services offered to them. Despite efforts to address the gap in financial education, reports indicate that fewer than half of UK schools offer basic financial education to their students. Moreover, when financial education is offered, it is often only taught as a small part of other subjects that are related to financial topics.
As a consequence, this has shown to have a knock-on effect on the UK’s personal banking sector. According to the FCA, only 39% of adults under 24 had an active current account. Furthermore, a study by the Bank of England reveals that the percentage of adults in the same age range holding any sort of financial account has dropped from 89% to 87% in only 2 years.
Such trends can have several negative effects on the economic future of the UK. Firstly, the lack of financially literate people can result in a smaller supply of indigenous labour in the financial services sector. This can ultimately lead to a weakening in the field and a shortage of skilled workers. Secondly, a lack of financial knowledge can result in poor personal financial management, leading to high levels of debt, low savings rates and poor credit scores, thereby reducing overall economic growth.
The importance of easy access to financial services for any group of people
- Bank Accounts
- Debit Cards
- Savings
- Data Protection
- Online Transaction
Financial services role in the UK economy
Financial services are not only one of the biggest and most important contributors to the UK’s economy, but they also stimulate innovation and job creation in related sectors, such as technology, and unrelated sectors, such as food services. As a result, any weakening in the financial services sector can have a significant knock-on effect on the economy, both in terms of local and foreign investment.
Furthermore, there is an additional negative consequence of a weaker financial services sector: an increase in financial crimes. This is particularly concerning because uneducated consumers may be less likely to detect or be concerned with financial frauds or other financial crimes, which can be extremely difficult to prevent or identify. This instability can lead to further problems in the economy.
In fact, this instability can lead to a “run on the bank.” When people lose confidence in the reliability and safety of financial institutions, they may withdraw their money from banks or other financial services. This, in turn, can trigger a vicious cycle of financial panic, leading to more and more people attempting to withdraw their money and causing more financial institutions to fail. This has historically caused financial institutions to fail, such as during The Great Depression, and more recently during the Northern Rock crisis of the 2008 recession.
Ultimately, these negative impacts on the broader economy can make it challenging for both individuals and businesses to obtain credit, invest, and grow.
Teengle's parental controls and educational tools on any bank account
The wide adoption of Teengle can help combat the personal, societal and economic issues caused by the previously mentioned lack of financial inclusion of teens. As studies suggest, the attention span of young people has been declining over time, therefore, it is important to build an application that can keep children interested, educate them and offer a service that is beneficial to them, accessible and convenient to use wherever they are. Teengle offers that to both children and their parents, through the mobile application that can be downloaded and used on any device in any location with an internet connection, resulting in an easy-to-use and hassle-free user experience.
In addition to that, as parents can set up accounts for children as young as 7 years old, they can gain experience and be financially literate from a young age and be able to achieve this in a safe and controlled manner, as their parents can manage and be responsible for their activities. Furthermore, the use of Teengle is more accessible to children compared to traditional financial institution branches, as the availability of electronic devices, such as smartphones, tablets and laptops, has been constantly increasing in recent years.
The UK government has also made efforts in increasing the availability of digital devices, especially for those from poorer backgrounds, as these can support improvements in education, mental well-being and development in young children in different environments, including at home and in classrooms. This means that an application such as Teengle can work in concord with government efforts to increase financial inclusion in young people, which can help improve current and future problems faced in the UK.
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