B2C PFM fintech apps have always been a difficult business. Consumers love free financial tools, but very few are willing to pay for them. At the same time, neobanks like Revolut and N26 have invested heavily in Personal Financial Management (PFM)features directly inside their banking apps, making it increasingly difficult for standalone fintech apps to differentiate. Traditional banks are still behind in many areas of financial guidance, but the consumers most interested in advanced PFM functionality are often also the ones most willing to switch banks entirely.
And yet, despite the challenging business model, the underlying problem remains enormous: financial literacy is still alarmingly low.
Modern society expects people to make increasingly complex financial decisions. Mortgages, pensions, taxes, investments, inflation, insurance, digital fraud, Buy Now Pay Later services, crypto… all require a certain level of financial understanding. But very few people were ever properly taught how to navigate these topics. According to Bruegel Research, only around 50% of EU citizens can correctly answer basic financial literacy questions on concepts such as inflation, compound interest and risk diversification. A Eurobarometer survey showed that only 18% of Europeans have a “high” level of financial literacy.
The consequences are visible everywhere. People overpay for financial products, leave large amounts of money on current accounts that slowly lose value through inflation, underestimate the long-term impact of compound interest, or rely too heavily on expensive credit solutions. Research in the UK estimated that financial illiteracy costs the average adult more than £640 per year through poor budgeting, unused subscriptions, inefficient savings behavior and failing to switch providers.
Financial literacy is also becoming an inequality amplifier. People with strong financial knowledge benefit disproportionately from investing, tax optimization, pension systems and employer benefits, while financially weaker households often end up paying more fees, using more expensive debt products and missing investment opportunities. In many cases, the gap is not driven by income alone, but by knowledge and behavior.
Behavior matters enormously. Many people automatically increase spending when their salary rises. Income grows, but savings rates remain unchanged. Subscription models further worsen the issue. Streaming platforms, cloud storage, fitness memberships, SaaS subscriptions and delivery services quietly create dozens of recurring monthly expenses that many consumers barely monitor anymore. A good PFM app that automatically detects useless subscriptions can already create tangible financial value for households.
At the same time, financial education is competing against an increasingly difficult digital environment. TikTok, YouTube and Instagram have effectively become financial advisors for large parts of Gen Z. Unfortunately, algorithms reward sensationalism, extreme returns and “financial freedom” fantasies far more than boring but sensible financial advice. The algorithm optimizes engagement, not financial wellbeing.
This creates fertile ground for scams and misinformation. Consumers are continuously bombarded with crypto scams, pump-and-dump schemes, phishing attacks, deepfake investment ads and unrealistic get-rich-quick narratives. Financial literacy today is no longer just about budgeting or investing. It is increasingly also about digital resilience and scam awareness.
Ironically, investing itself has never been more accessible. Zero-fee brokers and user-friendly investment apps democratized access to financial markets for millions of people. That is undoubtedly positive. But it also encouraged speculation, overconfidence and gamified investing behavior. We made investing accessible before making people financially educated.
Buy Now Pay Later services introduced similar behavioral changes. Debt became frictionless. Payments feel smaller, borrowing feels easier and consumers gradually lose overview. Especially younger generations increasingly perceive installment payments as normal consumption behavior rather than debt.
One of the most underestimated consequences of poor financial literacy is financial stress. According to OECD research, more than 70% of people worry about money at least sometimes. Financial stress affects concentration, sleep, productivity and mental wellbeing, yet it often remains invisible in the workplace until the situation becomes severe.
This is exactly why more employers are starting to invest in financial wellbeing initiatives. Companies already spend heavily on mental wellbeing programs such as coaching, mindfulness apps and psychological support. But many organizations now realize that financial stress is often one of the hidden drivers behind burnout and absenteeism.
As a result, financial wellbeing is increasingly becoming the next employee benefit. Employers are experimenting with financial coaching sessions, salary advance solutions, investment education, tax guidance and employer-sponsored PFM apps. Some companies even organize group purchases for long-term savings investments such as solar panels, e-bikes or home insulation solutions. The logic is simple: employees with less financial stress are generally healthier, more productive and more stable.
The interesting evolution is that financial education itself is also changing. Traditional financial education often fails because it is too theoretical and disconnected from daily life. Effective financial education is increasingly behavioral. It relies on nudges, automation, reminders, gamification and guided decision-making. The future of financial literacy may ultimately look more like Duolingo than like traditional classrooms.
Artificial intelligence could accelerate this evolution dramatically. AI assistants may soon become personal budgeting coaches, debt planners, tax assistants and investment explainers that provide personalized financial guidance at almost zero marginal cost. At the same time, AI also increases the sophistication of scams and misinformation, making trustworthy guidance even more important.
The biggest open question remains: whose responsibility is financial education? Governments can play a role, but financial systems are often extremely complex. Banks can help, but they remain commercial organizations with products to sell. Schools still spend surprisingly little time on practical finance. Employers increasingly step in because financial stress directly impacts business performance. And influencers now have enormous reach, for better and for worse.
What is clear, however, is that financial literacy is no longer a niche topic. It increasingly influences economic opportunity, mental wellbeing, productivity and even social stability. In a world where financial products become more digital, more accessible and more addictive, helping people make better financial decisions may become one of the most important societal challenges of the next decade.
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