Faced with uncertainity about the future, hedonistic ‘you only live once’ lifestyles are growing in appeal. People want both experiences and stuff. Today, now. It’s too easy to spend.
Contactless payments have surged and in Britain debit cards have overtaken cash as the most common form of payment.58 Over half of Millennials and Gen Z globally admit they overspend because of their smartphone. Easy access to credit, low interest rates and clever marketing are feeding an addiction to cheap money, with personal debt rising in many economies – in Britain by 11% from 2016 to 2018, far exceeding rises in income.59
Despite countless warnings, the International Monetary Fund, haunted by the past, fears that history is about to repeat itself as another global crash looms. The former head of the Bank of England has said the world economy is sleepwalking into a new financial crisis.60
What does our instashopping value mean for society and financial providers in particular? How can providers help their customers? Ultimately, to dodge this potential time bomb, people must take personal responsibility. But financial providers can help by educating and guiding customers, and not tempting them with short-term goals alone. Providers should act now. Avoid lecturing consumers, but offer support and systems to help them keep their spending in check, as well as planning for the future. Create products so people can modify, but not completely change their behaviour, and use reward systems that help consumers achieve the experiences they desire.
To attract customers to these new products and services, providers need to be speaking to them via the right channels. Providers should embrace this love of online, and use it as a platform to spread educational and product messages to their customers.
Talking in the right language, using the relevant channels and promoting services that help people enjoy life now, while also preparing for the future, could soften the blow. It might not be easy, but it might not be too late.
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