According to a recent study, a lack of financial education has led to some consumers in North America having inadequate household and retirement savings, and high levels of credit card and student loan debt - a worrying statistic as the global economic downturn continues.

The U.S. ranked 14th in the world for basic financial skills, with only 57% of adults considered financially literate, according to Standard & Poor’s Global Financial Literacy Survey. A number of countries, including Australia, Canada, Denmark, Finland, Germany and the United Kingdom had financial literacy rates of 61% or higher.

As of 2022, the U.S. also found itself in the top four for highest debt per capita, with more than 30% of U.S. adults not having enough in savings to cover a $400 emergency. 

But how can digital solutions, accessible anytime, and from anywhere, help people take control of their money, understand their own personal situations and make healthier financial decisions?

Few people feel comfortable discussing their finances, especially if they are struggling or in arrears. Knowing where to turn can be difficult and many feel overwhelmed by the sheer complexity of the debt management, restructuring and repayment process. 

If you combine this with the pressure on businesses to search for alternatives to call centres as wage inflation and business rates continue to rise, there’s a real need to explore user-friendly alternatives, designed to guide consumers and provide essential support.

It’s understandable that a large percentage of adults feel anxious or nervous when discussing their finances, deeming it a ‘no go’ topic of conversation, but that shouldn’t hinder them from being able to access good-quality credit. 

Digital solutions, such as Aryza Recover, are designed to restore consumer faith, digitally guiding consumers step-by-step through their money management journey, explaining their options in an easy to understand format and helping to improve their overall financial wellbeing.  

By utilising open banking data and smart software, these systems connect customer accounts, cards, debts, and assets, identifying the most appropriate and helpful offers available. Helping to bring peace of mind to an individual during a stressful situation, they also ensure that consumers and lenders can access all the information they need via a single system. 

With built-in checks to help identify vulnerability, consumers can feel confident that they are accessing the most appropriate plan to suit their financial circumstances. If they’d prefer, there is always the option to speak to an advisor who can help them through the journey.

Once this data is collated, consumers can view the repayment options available to them, and depending on what the affordability check calculates, decide to continue with their existing journey or consider other options such as payment breaks or revised payment plans - eliminating lengthy telephone calls or in branch discussions. 

Of course, people are rightly sceptical of handing over their personal and financial data online, and it is a completely new idea to ask customers to give up so much information via a digital solution. Some consumers still prefer to input the data manually over open banking, and we envisage it’ll be a while before certain demographics feel fully at ease with the process.  

Open banking really is a revolution in the way consumers engage with lenders and with a wave of economic uncertainty approaching, it may be the key to empowering consumers to help themselves out of tough financial situations.