Financial services firms are trying to build relationships with younger customers at a point when many are learning about money outside the banking system.
Only 3% of young people would go to a bank first for financial advice, while 49% feel uncomfortable engaging with traditional financial organisations. Yet 54% of 11 to 24-year-olds say they would turn to their banking app for guidance after first considering family support.
Those figures capture the challenge set out in Shaping Young People’s Financial Futures Together, a new report from the Compassion in Financial Services Hub at the University of Edinburgh’s Futures Institute, produced in collaboration with Young Scot.
The research, based on a survey of 300 young people aged 11 to 24, co-design workshops with more than 50 young people and interviews with 14 financial services professionals, argues that banks and financial providers need to rethink how they design products, communication and education for younger customers.
Digital money starts earlier
The report describes a generation encountering money through digital channels earlier than the financial services sector has traditionally designed for. Only 14% of 11 to 24-year-olds mainly use cash, compared with 56% using cards or phones. Among 17 to 19-year-olds, 63% regularly use Apple Pay or Google Pay.
Gaming is also becoming part of early financial experience. The report found that 43% of 11 to 13-year-olds use in-game currencies, while around 9% say they spend real money in games daily. For financial providers, that creates a gap between where young people first handle digital money and where regulated financial guidance tends to begin.
Many children and teenagers are already making spending decisions through games, subscriptions, app stores and social platforms before they have much direct engagement with banks. The report says this raises questions for policymakers and providers around age thresholds, safeguards and financial education in online environments.
The advice gap
Parents remain an important source of financial guidance, but the report found that older teenagers are increasingly turning to online sources, social media and self-directed learning. Among 15 to 18-year-olds, reliance on parents for financial guidance has fallen from 80% to 41%, while self-taught learning has risen to 24%.
The issue is not only access to information. The report identifies an ‘information-trust gap’, with young people relying more heavily on online sources while often remaining unsure what to believe. It also found that school-based financial education is seen as patchy and often disconnected from real money decisions.
Young Scot volunteer Emmanuella Shodunke, who contributed to the report, said: “Money is already a big part of our lives, but a lot of the support out there doesn’t feel made for us. We’re learning through apps, games and online, but it can be confusing and sometimes hard to know what to trust.”
She said clearer advice and tools linked to milestones such as starting work or managing rent for the first time would make “a huge difference”.
Products built around life events
The report’s recommendations focus on three areas: policy and education, products designed around young people’s lived experiences, and genuine co-design with young people.
For financial institutions, the commercial challenge is to design pathways that grow with customers as they move from childhood into early adulthood. The report says young people want support linked to real milestones, including first jobs, first pay, student loans, irregular income, rent, bills, subscriptions and saving for larger goals.
It also highlights demand for clearer communication, fewer jargon-heavy terms and conditions, stronger scam protections, and the option to speak to a real person for important decisions. AI-assisted tools may have a role in breaking down financial language and signposting support, but the report notes mixed trust in such services and says they should support human guidance rather than replace it.
John Loughton, CEO of Young Scot, said the research was “a clear call to action”.
“Young people are navigating an increasingly complex financial world, yet too often the systems and support around them haven’t kept pace with how they live, learn and manage money today,” he said. “Financial services have a huge opportunity here to become more inclusive, more transparent and more relevant to young people’s real lives and experiences.”
Co-design moves up the agenda
The report places particular weight on co-design, arguing that young people should be involved in shaping products, services and policy, rather than consulted after decisions have already been made.
It says financial institutions should establish ongoing youth design partnerships, include young people from different socio-economic, cultural and care backgrounds, and compensate participation appropriately. The report links this to wider regulatory expectations around inclusive design, the FCA’s Consumer Duty and government work on financial inclusion.
Douglas Graham, director of innovation clusters at Edinburgh Innovations, the University of Edinburgh’s commercialisation service, said the project showed the value of collaboration between academia, industry and the third sector.
“By working together in this way, including actively involving young people, we can design products, services and policy that are really fit for purpose and, in this case, improve financial health and wellbeing,” he said.
Industry response
The workshops were supported by Royal Bank of Scotland and the Thinking the Future of Money in the Humanities project, funded by the Royal Society of Edinburgh. Lloyds Banking Group and Tesco Bank were among the financial institutions involved in the work.
Sandi Royden, head of retail banking customer propositions at Royal Bank of Scotland, said listening to young customers was central to product design.
“One of the most important things we can do as a bank, when designing for our younger customers, is to listen to their views and understand their context and needs,” she said.
Chira Barua, CEO of Scottish Widows and CEO of insurance, pensions and investments at Lloyds Banking Group, said in the report that younger customers needed services built with them and “around the reality of their lives”. Lloyds, he said, was bringing young designers and developers into its Dundee tech hub to create game-based and digital experiences focused on financial confidence.
A design challenge for providers
For banks and financial services firms, the report sets out a product and engagement problem as much as an education issue. Young people are already using digital money, already exposed to financial risk, and already looking for guidance in online spaces. The regulated sector remains trusted in some respects, but often feels distant from the channels, language and life events shaping young people’s financial decisions.
The report’s findings leave providers with several practical questions: when financial guidance should begin, how banking apps can support capability without overwhelming users, where human support should sit alongside digital tools, and how products can adapt as young customers gain independence.
The next step proposed by the report is further collaboration between policymakers, financial institutions and young people. Areas for further research include financial milestones, AI-based tools, parental oversight and privacy, the link between financial and mental wellbeing, and the transition from cash to digital money.
