Many consumers use digital financial services, with online banking being particularly popular. However, an analysis by the Federal Financial Supervisory Authority (BaFin) indicates that users do not always exercise appropriate caution. The relevant data comes from a survey by the Organisation for Economic Co-operation and Development (OECD) and its International Network on Financial Education (INFE).

BaFin coordinated the study in Germany and analysed data relating to financial resilience, digitalisation, sustainability and financial knowledge. The OECD will release the findings for all countries involved at a later date (see info box below).

The findings in brief:

• More than three-quarters of the respondents reported using online banking to check their account balance or transactions, to pay bills or to transfer money.
• 2 percent reported inadvertently divulging passwords or other sensitive information.
• Only 45 percent were aware that a financial contract concluded online does not have to be additionally signed on paper.
• Awareness of crypto assets/tokens is clearly on the rise in Germany. 84 percent of respondents had at least heard of the term, and 5 percent owned such products.

Digital financial services are popular

Many people use digital financial services to conduct everyday financial transactions. For example, more than three-quarters of the respondents reported having checked their account balance or paid bills online either occasionally or frequently within the last twelve months.

There is less demand for other digital financial services. Only 30 percent of the respondents at least occasionally use websites or apps that sync different financial accounts. 27 percent paid in stores using a smartphone during the survey period.

39 percent of respondents said that they had opened an account online before, and the same number reported having applied for a payment card online. 35 percent had taken out an insurance policy online.

Although older people use digital financial services less frequently than younger people, established products are also popular among those aged 60 to 79. A majority of this age group reported having at least occasionally paid bills online (69 percent) or checked their account transactions (66 percent) within the previous twelve months.

Only 18 percent of the older group had paid in a store via smartphone. 16 percent had used websites or apps that sync different financial accounts. While 36 percent of the 60 to 79 age group reported that digital tools made it easier for them to manage their finances, the figure was much higher for the younger group at 60 percent.

Consumers are not always careful

Many consumers are careful online: 95 percent of respondents reported sharing no information about their financial situation on social media or other websites. Almost an equal number do not share passwords or bank PIN numbers even with close friends. When making online purchases, a large majority of 88 percent also consider it important to determine whether the relevant website is safe.

While most people are careful, two percent still reported inadvertently divulging personal information such as passwords or payment card PINs within the last two years after receiving fraudulent e-mails, phone calls or messages on social media.

Two percent reported having lost money as the result of a hacking or phishing attack. This may be due to reckless behaviour: for example, 19 percent consider it safe to make online purchases while using publicly accessible WiFi, such as in a café.

Misconceptions regarding online contracts

Many consumers have a lax attitude towards online contracts: 56 percent stated that they are more likely to read the small print in a paper contract than an online contract. This could be due to a misconception: only 45 percent of respondents were aware that a financial contract concluded online does not have to be additionally signed on paper to become legally binding.

Awareness of crypto assets is growing

Awareness of crypto assets/tokens is clearly on the rise in Germany. 84 percent of respondents had at least heard of the term, which was the case for only 49 percent in 2019. While no respondents reported owning such assets in 2019, the figure has since risen to five percent.

There are also misconceptions relating to crypto: roughly one third of respondents were not aware that cryptocurrencies are not legal tender.