AI Overtakes Banks: Young Adults Turn to Chatbots for Financial Advice

New research from Hinckley & Rugby Building Society reveals that young UK adults are now more likely to turn to AI chatbots for financial advice than traditional banks. For fintech leaders, this shift highlights a critical pivot in consumer trust and the urgent need for legacy institutions to integrate accessible, tech-driven education into their service models.

What was announced

The research, which surveyed 2,000 UK adults aged between 18 and 35, indicates a significant shift in how the "digital native" generation interacts with financial services. According to the findings, 18.2% of respondents have utilised an AI platform or chatbot to answer a financial question within the last twelve months. This figure is notably higher than the 15.8% who sought advice from a traditional bank or building society during the same period. The application of AI is not limited to general queries; 22.2% of those surveyed have used the technology to construct a personal budget, while 20.4% used it to research investment strategies. Furthermore, 19.9% leveraged AI to establish savings goals, and 18.6% used it to compare different savings accounts or financial products.

The study also highlights a systemic failure in formal financial education. Approximately 15.3% of young adults reported receiving no financial education during their time at school or college, and nearly 30% of those who did receive instruction described it as not useful. Consequently, family members remain the primary source of financial knowledge for 30.8% of respondents, dwarfing the 4.9% who credited their formal schooling. This lack of foundational knowledge correlates with risky digital behaviour: 14.2% of young adults admit they rarely or never verify financial information found on AI or social media platforms against a secondary, reliable source. This has led to tangible consequences, with 15.9% of respondents reporting they have lost money due to following misleading or poorly understood financial information. Finally, 26.1% of participants noted that clearer information regarding savings products would improve their financial confidence.

"It's positive that young people have more ways than ever to learn about managing their money, and tools such as AI can make complicated financial topics feel more accessible and easier to understand. However, information that could influence decisions around savings, borrowing or other financial products should be checked against a reliable source."

Melanie Aspden, Savings Product Manager at Hinckley & Rugby Building Society.

The companies involved

Hinckley & Rugby Building Society is a long-standing fixture in the United Kingdom’s mutual financial sector. As a building society, the organisation operates under a member-owned model, meaning it is owned by its customers rather than external shareholders. This structure traditionally prioritises the provision of stable savings products and mortgage lending over the maximisation of short-term profits. The society does not have a corporate parent and has maintained its identity without undergoing name changes, positioning itself as an independent alternative to the "Big Four" clearing banks that dominate the British landscape.

In a market increasingly defined by the rise of digital-only "challenger" banks, traditional societies like Hinckley & Rugby are tasked with maintaining their reputation for personalised, community-focused service while adapting to rapid technological shifts. The society’s focus on consumer research and financial literacy reflects a broader industry trend where established firms seek to reclaim their role as trusted educators. By operating within the mutual sector, Hinckley & Rugby remains part of a movement that emphasises financial inclusion and the long-term security of its members' assets in an era of fragmented, social-media-driven financial advice.

What FF News has reported before

FF News has previously tracked the strategic evolution of the organisation, notably reporting on significant leadership changes within the firm. In late 2023, the society moved to strengthen its executive team to navigate the evolving regulatory and digital landscape. Specifically, FF News covered how Hinckley & Rugby Building Society appoints new CEO, a move that signalled a fresh chapter for the mutual as it addresses the challenges of modernising its service delivery. This leadership transition occurred at a time when the broader building society sector was beginning to grapple with the rise of artificial intelligence and the decline of traditional branch-based interactions. The appointment was seen as a pivotal step in ensuring the society remains relevant to a younger demographic that is increasingly looking away from traditional institutions for their primary financial guidance and budgeting needs.

What this means

The fact that AI usage has already overtaken branch visits for financial queries among young adults marks a definitive end to the era of the "local bank" as the primary source of truth. This shift places immense pressure on traditional institutions to accelerate their digital transformation or risk becoming mere back-end utilities. The high rate of financial loss reported by those following unverified advice suggests a "trust gap" that the industry has yet to bridge. For the fintech sector, the opportunity lies not just in building better chatbots, but in creating "guardrailed" AI that combines the convenience of automation with the accuracy of regulated financial advice. The market is moving toward a model where the interface is conversational, but the underlying data must be unimpeachable to prevent further consumer harm.