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Ian McKenna: Using technology and education to engage potential clients

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One of the main trends I highlighted in my reporting from Finovate in San Jose last week was the increasing range of personal financial management tools that are being deployed elsewhere in the world to help consumers manage their day-to-day finances.

While such tools are generally in short supply in the UK, new research published today by The Open University Business School reinforces the urgency of addressing this gap. This highlights that despite signs of economic recovery, consumers are still struggling with daily budgeting.

The research coincides with the launch of an important new initiative which gives an example of the sort of investment I believe we should be making as an industry. In its study OUBS reveal that nearly half of all UK adults (46 per cent) never keep a household budget.

Actually from my work internationally I suspect that if anything this figure is rather on the low side, but it clearly identifies the need for action by our industry. If people don’t understand their income and expenditure how can they have the confidence to invest in regular long term savings?

To help address this need an interactive online course to help consumers navigate the personal financial maze will be available via The Open University Business School’s True Potential Centre for the Public Understanding of Finance. It is being delivered as a Massive Open Online Course – an increasingly popular way of learning that enables the best teachers and lectures to reach very large audiences.

Taking place over an eight week period, it is designed to help families better understand and manage their finances; as well as keeping pace with their children, as they begin their new financial curriculum in September 2014. Over 5,000 people have already signed up in advance for the course,which is being promoted by social media – specifically Facebook and Twitter – as well as Open University connections.

The Managing My Money course is designed to help consumers develop their personal financial capability and understanding where they have no previous experience studying the subject. Around three hours’ study is involved each week and the course is delivered via the OU’s online social-learning platform, FutureLearn.

It involves an array of audio-visual clips, interactive discussions and quizzes, and engaging resources. Topics covered include how to compile a budget; making effective decisions about saving and spending, managing and understanding personal debt; how mortgages are used to finance home ownership; the different pension products available; pension planning, and how to make rational decisions when buying insurance.

Individuals can register for Managing My Money, which is free of charge to the general public here. The first instalment will be available from Monday 12 May and people can join the course up until Sunday 25 May.

The course has been made possible by funding from True Potential but is entirely independent of the firm.  Having had advance access to some of the material, it is genuinely engaging, fun and interactive with lots of use of video and other media.

The service begins by helping users understand how they can build a personal fact find and build their own budget. Subsequently users learn to create their own household balance sheet allowing for savings and investments, and learn about issues such as net worth and gearing. This is all done at a level that should be understandable to consumers with little or no experience of personal finance.

The last two weeks of the course look at pensions and insurance and all of the tests that are undertaken as part of the process to build an overall personal score. Content is also included to help personal behavior and how behavior affects financial decisions including guidance on how to avoid bad financial habits.

Failing to help consumers with these basic issues means that as an industry we are denying ourselves millions of customers each year. While I believe this is an issue we should address as an industry, I must applaud True Potential for making the investment to make such a valuable service available to all consumers.

This service will clearly create thousands more customers suitable for advice – now we, as an industry, have the challenge of working out how to provide them with advice solutions at a price they can afford.

Ian McKenna is director of the Finance & Technology Research Centre

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  1. 1an H0m3w00d1234 12th May 2014 at 1:27 pm

    abacus test comment – please ignore

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