The Impact of FinTech Apps on Consumer Wellbeing

This page provides further details on an ongoing project that is developed in collaboration with FinTech West and funded by UKRI and UKFin+. 

Project background

The cost-of-living crisis highlights once more how the availability of financial resources impacts human wellbeing. In addition to income inequality, lacking access to financial support or financial literacy gaps may lead to more individuals struggling – financially and otherwise. 

Various digital apps offer access to financial services and planning tools. The design of these FinTech apps often focuses on user convenience, gamification, and technological familiarity with design philosophies that can be encountered in social media apps too. 

Yet certain interactions and habits displayed when using social media spur user anxiety, or problematic behaviours, and thus mitigate the positive aspects of these powerful digital technologies. 

The main questions addressed in this project relate to how we can ensure that potentially powerful digital tools are accessible to – and used by – those who stand to benefit the most and how to make sure these tools are inclusive and more than just a pastime. To this end, an initial survey will elicit familiarity with FinTech apps amongst a variety of demographic groups. After a randomised information-update treatment, follow-up surveys enable us to evaluate how the usage of FinTech apps influences users’ wellbeing.

Vision and main research questions

The evolution of individual financial wellbeing in recent years is characterised by two major trends: A democratisation of finance and the proliferation of financial precarity.

FinTech apps like Moneybox, Robinhood and Coinbase have revolutionised access by making investment options more convenient and affordable. They further empower users to control their finances through elements of gamification and regular feedback.

Eventually, the democratisation of finance should boost the financial wellbeing of a substantial share of the population. However, a growing segment of the population faces financial hardship, marked by rising debt and the struggle to meet basic needs. The cost- of-living crisis, rising rents and shrinking real wages are among the main driving factors. In addition to these factors, affecting younger generations over proportionately, personal unsustainable spending patterns were facilitated by the emergence of Buy Now Pay Later schemes.

Ensuring that the democratisation of finance alleviates financial precarity is a problem as wicked as it gets: Continuous product innovations, regulatory shifts, and changing consumer preferences necessitate a continuous evaluation to ensure FinTech's contribution to financial wellbeing is effective and inclusive.

The proposed project is dedicated to delivering timely insights into this wicked problem. Our core vision is to provide a better understanding of how FinTech apps help individuals achieve their financial goals and avoid financial precarity. As a first step, a pilot project helps us to establish the prevalence of FinTech app usage among young adults and consequently defines our research questions. 

RQ1: What are the usage patterns across various demographic groups and the underlying reasons for differential uptake of investment-orientated FinTech apps?

Investment-focused apps offer easy access to financial markets, potentially promoting financial wellbeing through wealth accumulation and security. However, heightened risk- taking behaviour, influenced by limited financial literacy, herd mentality in online financial communities, and advice from unreliable sources, pose a threat. Gamification elements in app design may exacerbate risk-taking tendencies, leading to increased anxiety and financial precarity. Our research questions aim at understanding decision-making processes within investment apps and their impact on users' financial outcomes and wellbeing.

RQ2: What are the sources of information and other influencing factors when saving or investing via FinTech apps?

RQ3: How effective are FinTech apps in terms of increasing financial wellbeing and what are potential trade-offs?

Acknowledging the wicked nature of the nexus of financial precarity and the democratisation of finance, our long-term vision is to generate a lasting impact by establishing a representative FinTech Innovation Feedback and Information Panel that allows a continuous evaluation of FinTech app users' (financial) wellbeing. The envisioned representative modular panel could offer invaluable timely feedback for stakeholders who are dedicated to enhancing support offers and ensuring inclusivity amid evolving technology and regulations.

Phase I: Pilot Project (September - December 2024)

The project’s goal will be achieved by implementing a piloting multi-stage survey and a randomised controlled trial. The obtained data will serve as the foundation for delivering answers regarding the effectiveness and societal impact of FinTech apps, sharing relevant findings with the UK FinTech community and other stakeholders, and developing a framework for a FinTech Innovation Feedback and Information Panel.

Phase II: Exploration phase (2025)

Building on the data collected during Phase I, more detailed results will be disseminated and the feasibility of the proposed FinTech Innovation Feedback and Information Panel will be explored.

Related publications

Weisser, R.A. (2025): Survey on the wellbeing of young adults in a cost-of-living crisis. UWE data repository [online] Available from: https://researchdata.uwe.ac.uk/id/eprint/755/

Survey Documentation