Navigating a Recession: The crucial role of banks in proactive individual support 

90% of under-25s shy away from conversations about their finances; Zahra Hassan, co-founder of Eligible, asserts that banks need to be harnessing AI to detect vulnerable customers and provide proactive advice

 



The UK’s descent into recession aligns with findings from Citizens Advice revealing a doubling in the number of young individuals seeking financial advice since 2019. For those under 25, navigating their first steps into independence has become increasingly challenging due to the tightening cost of living. According to TSB more than 1 in 5 under 25s are currently worried most about debt. Despite this worry and rising financial pressures 90% of under 25s shy away from conversations about their finances, and would rather talk about sensitive topics like health issues, politics or religion instead of money. Zahra Hassan, co-founder, and banking expert at Eligible – the UK’s first platform used by banks/lenders to provide consumers with bespoke financial expertise – is available to provide insights on the crucial role of banks to provide proactive support to their customers.

Amidst growing financial strain among Brits, effective financial communication is not just advantageous but imperative, especially with the introduction of the new consumer duty requiring financial institutions to exercise additional care in assisting their customers. Currently, Brits are turning to unregulated sources of financial advice. It’s estimated that 39% have used Google and 22% have turned to parents for financial education yet, one in five UK adults reports having low financial capability. The reality is that the onus is on banks to provide their customers with proactive and clear information surrounding their products to allow them to make sound financial decisions. 

Further illustrating the effects that the lack of financial literacy may be having on behaviour, the OECD report also found that only 26% of adults compare financial products across providers and only 24% of adults seek advice from independent sources when purchasing financial products and services. Whilst this signals a clear call to action for financial institutions, policymakers, and the broader community to address and rectify the existing gaps in financial literacy. According to Hassan, the adoption of technology by banks may be the key to repairing the strained relationship between lenders and customers.

The advent of artificial intelligence can allow for vast quantities of customer data to be analysed at an incalculable pace, identifying consumers that are most at-risk – providing tailored support where needed. The incorporation of learning algorithms also enables service providers to demystify concepts, providing a vital lifeline to the 7-in-10 Brits that feel overwhelmed by financial jargon.

Zahra Hassan, co-founder of Eligible, comments on the potential for AI to transform customer support structures:

“AI has the power to transform customer support from a reactive relationship to a proactive one. Instead of banks providing support only when the customer asks for it, AI can detect those who are likely to need assistance and proactively engage with them, fostering education and active dialogue.

“What AI can do today is interact with customers and measure the level of understanding of their existing product before providing bespoke financial expertise. Based on this, we can start to form views on the likelihood that they could struggle to meet their payments.”