A Standard Chartered survey finds that COVID-19 is significantly impacting personal finances globally, with one-third (65% in Kenya) already earning less and more than half expecting the pandemic to further affect their income and/or employment.
Yet young people (18-34) and those in emerging markets are the most confident in their skills and prepared to work hardest to realize opportunities in a post-COVID world.
The study of 12,000 adults across twelve markets – Hong Kong, Taiwan, Mainland China, Singapore Indonesia, Malaysia, India, UAE, Kenya, Pakistan, the UK, and the US – offers insights into their financial wellbeing and employment outlook in these challenging times, and how banks can play a role in helping them manage their money.
It reveals a stark contrast globally, between the financial reality that people face and their confidence in the future. This can be explained by a willingness – particularly among young people and those in emerging markets – to work harder, take steps to adapt income streams and reskill if they can, in order to earn more.
Edith Chumba, Head of Retail Banking, Kenya, and East Africa, said: “Kenyans have been particularly hard hit financially, with respondents reporting the highest levels of increased borrowing of any market surveyed (63%), while 72% have reduced their levels of saving. Yet Kenyans were among the most confident and willing to adapt: 89% believe they have the skills to thrive in a more digital, post-COVID-19 world; 93% would set up a second income stream, while 87% would retrain or learn a new skill.”
And, with many graduating or leaving school in the midst of a global recession, younger generations are even more willing, or able, to adapt to the current circumstances. 75% of 25 to 34-year-olds globally (95% in Kenya – the highest surveyed) would set up a second income stream; and 72% of all 18 to 44-year-olds (88% for this age range in Kenya) would reskill compared to 37% of those aged 55 and over (60% in Kenya).
“Kenya was also the most entrepreneurial nation with 85% considering starting a new business to increase its earnings in the next six months. Kenya’s Millennials and Generation Z are also much more likely than their global peers to respond to the crisis by starting a new business; 87% of those aged 18-44 would consider doing so in the next six months, compared to 52% globally’ added Ms. Chumba.
Around the world, the level of flexibility, adaptability, and entrepreneurialism tends to decrease with age, along with confidence, despite – or perhaps because – older generations are more established in their careers.
The divide is even starker when comparing developed and developing markets. Those in established global economies are not only less confident that they have the digital skills needed to thrive amidst the downturn, they are also less willing to adapt and take steps to increase their income.
At 93%, Kenya saw the highest proportion of people preferring to work more to get ahead, rather than reduce their hours for less pay (followed by Mainland China and India). Meanwhile, the UK and the US had the highest proportion of people who valued free time over money (38% and 33% respectively).
In terms of wanting to better manage personal finances, geographical differences were similarly stark. Again, Kenya ranked highest (93%) followed by respondents in Mainland China (85%), Malaysia (83%), and India (82%) in the proportion of people who want to better manage their money, to make it go further.
And while the pandemic has acted as a catalyst for the growth of online banking, with over half globally using online services more, the shift has been more apparent in fast-growing markets. For example, increased use of mobile devices for banking services is most prominent in India (79%), the UAE (72%), and Kenya (69%). Fast growth markets are also more likely to want their banks to help improve their confidence at managing money digitally as they increasingly look to bank online – Kenya scored highest (91%), compared to a global average of 69%.
There is one clear area of the almost unanimous agreement; a global desire for more flexibility when it comes to working arrangements post-COVID-19. Where applicable, 69% in Kenya (71% globally) would prefer to continue working from home for at least two days a week once restrictions are lifted and 84% (77% globally) want more flexible working arrangements.
Young people around the world have been hit particularly hard by the economic impact of the pandemic. Many are in insecure employment or graduating into a tough job market. Yet their confidence, adaptability, and willingness to work hard, especially in fast-growing markets, provides hope for the recovery.
Many are considering starting a new business in the wake of the pandemic but want to learn how to manage their finances better. They must be supported. Banks have a role to play both by helping them manage their money and providing tools that make banking easier so they can focus on leading the way to recovery.”