Lesson video

Hello, everyone.

My name is Ms. Wyatt, and I am so pleased that you could join us here today for our Citizenship lesson.

Welcome to today's lesson on how are financial products changing the way we manage money from the unit "How can we prepare well for financial decision making?

" By the end of today's lesson, you will be able to explain how recently emerging financial products are changing the way we manage money.

We will be using the following keywords throughout today's lesson.

These keywords are financial products and financial services.

Now, these words may be new to you and unfamiliar, but please don't worry, as we will be using them a lot.

Financial products are products, services, and tools provided by banks, building societies, or other companies.

And financial services is the wider industry or sector that provides financial products.

Our lesson on how are financial products changing the way we manage money is broken up into three parts today, with the first part exploring what financial products have recently emerged, then looking at what are the pros and cons of financial products, and finishing on what trends are shaping the future of finance?

So when you're ready, let's begin to look at what financial products have recently emerged?

In recent years, especially since 2020, many new financial products have been created to help people manage their money more easily through digital tools.

One popular example in the UK is a non-traditional credit card, which was launched in 2022 and has continued to grow and win awards.

It allows users to split purchases into instalments directly in their banking app.

This credit card means that people can spread the cost of buying things, like clothes or electronics, without needing a traditional credit card because you can make payments in instalments.

This is a financial service from a company called fintech.

This is short for financial technology, companies that offer financial tools through mobile apps.

So fintech is short for financial technology.

Another modern financial product is National Savings and Investments, or NS&I, Green Saving Bonds, backed by the UK Government.

First launched in 2021 and updated regularly, the latest 2025 version offers a fixed return over three years, which means people will earn a set amount of money from their investments regardless of what happens.

It also helps fund environmentally friendly projects across Britain, like renewable energy.

This product is aimed at people who want their savings to have a positive impact while earning interest.

It also supports the UK Government's push towards a greener economy.

So let's check our understanding so far.

Read the statements below and decide if they are true or false and tick the correct column.

So, in a second, you're gonna pause the video, read the statements, and then you're gonna decide if they are true or false by ticking the correct column.

So when you're ready, pause the video and have a go at this quick task.

Okay, let's go through our answers then.

So the first statement said a credit card was launched in 2022 that allowed the user to split payments directly from their banking app.

That is true.

Well done if we said true.

A fintech is a technology company that offers financial tools through traditional banks in the high street.

Is that true or false?

Hopefully we recognised that that is false.

NS&I Green Savings Bonds are backed by the UK Government and help fund a greener economy.

Hopefully we all said true.

Both credit cards and NS&I Green Bonds are financial products that can help people manage money.

Again, hopefully we said true.

So we had true, false, true, true.

Well done, everyone.

Artificial intelligence, or AI, has also been emerging in financial services for several years.

In 2016, a company launched an AI-powered savings tool that uses algorithms to figure out how much money a person can safely save each week.

So the app connects to your bank account and moves money into savings automatically based on your spending habits.

How cool is that?

This kind of digital banking helps people manage money without needing to do lots of budgeting themselves.

In 2025, AI is being used by many companies to improve investments for its customers.

AI is changing all the time, and financial products will continue to emerge based on future AI.

Young people now also have access to newer financial products which offer prepaid cards and apps designed to teach budgeting and saving.

These tools help users track spending, set saving goals, and even earn rewards for doing jobs around the house.

Some products allow users to create virtual jars for different purposes like food, travel, or entertainment and plan spending ahead of time.

These products mix financial services with education, helping build good money habits early.

Cryptocurrency, or crypto, which you might know it as, has also become more mainstream as a financial product.

Although it can be seen as high risk, some services now allow people to save or invest using crypto.

Crypto is digital money that you can use or invest in online.

It's not controlled by banks.

People use computers to send, receive, and track it using secure technology.

For example, in 2024, a company expanded its crypto wallet services, allowing users to earn small rewards by learning about digital money.

These financial services give people more control, but they also require a better understanding of financial risks, which is why schools are now including cryptocurrency topics in financial education.

So let's have a go at filling in the gaps in our passage here.

So some companies are using blank to work out how much a person can safely spend.

AI then automatically moves money to your blank.

Virtual jars help people plan their blank by organising their budgets for different areas of their lives.

Cryptocurrency is becoming more blank, but it is still considered blank risk, so financial education in schools is vital.

So we have five gaps here, which we need to work out what the words are to fill in the gaps.

So pause the video and have a go.

Okay, hopefully we've had enough time now to have a go at filling in the gaps in our passage.

So let's go through the answers together.

So some companies are using AI to work out how much a person can safely spend.

AI then automatically moves money to your savings.

Virtual jars help people plan their spending by organising their budgets for different areas of their lives.

Cryptocurrency is becoming more mainstream, but it's still considered high risk, so financial education in schools is vital.

So we had AI, savings, spending, mainstream, and high were our missing words.

Well done you if you worked those out.

For this task, I would like us to choose one financial product and write a short advert for explaining what it is, how it helps people, and why someone might find it a useful way to manage their money.

So Jacob says, "You could choose from new style credit cards, Green Saving Bonds, AI saving tools, prepaid cards, virtual jars, or cryptocurrency.

" So we've looked at a lot of financial products so far, so let's pick one and write a short advert for it.

When you're ready, pause the video and have a go at this task.

Okay, so your advert might look a little bit like ours.

So we've said: Take control of your money with the prepaid card, a financial product made for young people.

This isn't just a card.

It's a smart tool that helps you learn to budget, save, and spend wisely.

With the app, you can set goals, track your spending, and even earn rewards for doing jobs around the house.

It's perfect for building good money habits while still having the freedom to spend.

Start your journey to financial confidence today!

So your advert might sound similar to ours, but you might also not have picked the prepaid card to look at as a financial product.

But hopefully we've managed to pick one financial product and write an advert for it.

We have now explored what financial products have emerged recently, and we're going to look at now what the pros and the cons of financial products may be.

So new financial products are often seen as risky because people don't have any experience of them or what might happen with them in the future.

So it's the fear of the unknown.

However, sometimes they are beneficial to many people as a new way of saving, investing, or spending money.

One major advantage of modern financial products is the convenience, so how easy it is, how time-saving it is.

So digital and mobile banking and budgeting apps mean people can manage their money anywhere and anytime.

For example, banking apps send real-time notifications every time you spend, helping you stay in control.

These financial services also help people set saving goals and avoid overspending.

For young people, it means learning to manage their money earlier.

However, there is one major disadvantage to the growth of mobile banking and budgeting tools, which is the high rate of online fraud and scams in these financial products, unfortunately.

UK Finance in their Half Year Fraud Report in 2023 found that criminals stole 580 million pounds through fraud in the first half of 2023.

However, banks prevented a further 651 million pounds of unauthorised fraud from being stolen through advanced security systems.

So there is a major disadvantage, but banks are trying to prevent this from happening.

Another advantage is flexibility.

So, Buy Now, Pay Later, which is BNPL.

These schemes give people a choice to delay payments.

Now, this helps people afford items during emergencies or big events like birthdays or weddings.

However, if it's not managed properly, this kind of financial product can lead to disadvantages like getting into debt.

Using these services without understanding interest or repayment terms can cause serious money problems later.

So, it's great that Buy Now, Pay Later is so flexible.

It gives people a chance to earn that money to pay for something, or it can be used during emergencies.

However, if we don't know enough about the interest rates or repayment terms and we don't look into them, it can cause debt.

So let's think, what is one advantage and one disadvantage of a BNPL financial product?

Let's pause the video and think of this then.

So what's one advantage and one disadvantage?

Okay, so we said, one advantage is that you can afford items in emergencies, but a disadvantage is that you can get into debt quickly if you haven't read the repayment terms and you don't know enough about interest.

There are also risks with financial services linked to investing.

Some apps make investing in stocks or cryptocurrency feel like a game.

While they open new opportunities, they can encourage people to take risks without understanding the consequences.

For example, someone could lose money on a risky investment without realising it's not a guaranteed income.

An advantage of UK Government-backed financial products like NS&I Bonds is safety.

These are protected and guaranteed, which makes them reliable for saving.

However, the downside is that the interest may be lower than riskier options.

For example, for people who want stable growth and don't like risk, this type of financial service is often the best choice.

So these are NS&I Bonds.

So what's a disadvantage of using a mobile app for financial services?

Is it A, automatic money transfers, B, real-time spending alerts, C, budgeting tools, or D, higher levels of scams?

Pause the video and have a think about the answer to this question.

Okay, time for answers.

Hopefully we said D.

Unfortunately, a disadvantage of using mobile apps for financial services is that there is a higher level of scams and fraud.

New financial products often rely on technology, which can be a disadvantage for people who are not confident using digital tools.

Older generations or people without smartphones might struggle to access these services.

This creates something called a digital divide, where people are left out of something because they cannot use technology.

It's important that all users are educated about these new financial tools and that financial services are made accessible to everyone.

Access to the internet is still poor in some rural areas and smaller towns, making access to online banking more difficult and sometimes impossible.

Although as young people, you might often see the advantages of technology, for some citizens in your community, the inaccessibility of these services can actually be a disadvantage and, like we said, cause that digital divide.

Oma is 85 years old and lives in a rural area.

What difficulties might she find in accessing the latest financial products?

Have a think about this.

Okay, we said: Oma might not have good internet access because she lives in a rural area, so she might find it difficult to access online financial products.

It may be difficult for an elderly person like Oma to access smartphones and new apps as they may be less familiar with these forms of technology.

So, it might be harder for them to access the latest financial products.

For this task, I would like us to complete the chart by briefly explaining at least three advantages and three disadvantages of modern financial products.

So when you're ready, pause the video and have a go at this chart.

Okay, let's go through our answers.

So, some advantages, we might have said, well, it's easy to access through websites and apps.

Its real-time alerts helps budgeting and savings when you're spending.

There are apps that teach people good money skills at a young age.

And the government-backed bonds can be safer and are regulated.

But as a disadvantage, the easy to access through websites and apps creates a digital divide for those who can't access products online.

We also have some investing encouraging risky behaviour which might lose you money.

We have managing money through apps can feel like a game.

And then interest rates on safer options can be lower than riskier ones.

So there are advantages and there are disadvantages of financial products here.

We have now explored the pros and the cons of financial products, and we're going to look at now what trends are shaping the future of finance?

So one major trend shaping finance is AI automation.

In 2025, more banks are using AI to give smart suggestions to customers, like when to save or if they are spending too much money on subscriptions.

These changes are part of a shift in financial services to make banking smarter and more personal.

AI can now even scan spending patterns to alert users if they are close to overspending.

Another trend shaping the future of finance is open banking.

Open banking means that people can give permission for apps to access their banking data to help them get better deals.

For example, an app could look at your energy bill payments and recommend a cheaper provider.

This trend is growing in the UK thanks to support from the government.

This aims to give people more control and transparency over their financial products.

So this is open banking.

So these statements are all incorrect.

They're all wrong.

So let's change one word of these statements to make them correct, to make them make sense.

So pause the video, read through these statements, and change one word to make them correct.

Good luck.

Okay, so, for our answers, we should have AI automation can alert someone when they are close to overspending.

Next one, open banking means people can give permission for apps to access their banking data.

And the third statement is this new style of banking aims to give people more control over their financial products.

So well done if you managed to correctly change these words.

Sustainability is also shaping the future of finance.

Some people now want financial products that do not just make money but also help the planet.

For example, green savings account, ethical investing, carbon-tracking credit cards.

So some banks now let users track the carbon footprint of their spending.

So these financial services appeal to people who care about the environment.

Sustainable finance contributes to local economies as part of the circular economy.

This is an economic system designed to keep resources in use for as long as possible, minimising waste and pollution by prioritising reusing, repairing, and recycling, okay?

So, some banks are now letting us track the carbon footprint of our own spending.

It ultimately aims for a regenerative and sustainable economic model.

Another important trend is financial inclusion.

This means making sure everyone has access to banking and financial tools.

For example, in December 2024, the Treasury Minister hosted the first meeting of the new Financial Inclusion Committee.

This was set up by the UK Government to work on expanding access to basic bank accounts for people who are homeless or have poor credit.

This ensures more people benefit from modern financial products, not just those with high incomes or perfect credit scores.

So let's sort these statements into the correct column.

Are they focused on the environment, or are they focused on for people with limited access?

So, there are six statements that you need to read through and put them into the correct column, either environmental or limited access.

When you're ready, pause the video and have a go at this task.

Okay, it's now time to go through our answers.

So, we should have, for environmental, using a carbon-tracking credit card from a bank, saving money in a green account, and choosing to invest only in ethical or green companies, so 1, 3, and 5.

But for limited access, we should have getting access to a basic bank account if you're homeless.

Number 4, opening a digital-only account with no need for proof of address.

And 6, the government helping people with poor credit open accounts.

So hopefully we've managed to sort these statements into their correct columns.

Well done if we did.

Finally, the future of finance also includes digital-only banks.

These banks don't have any branches, so don't have any shops or stores.

Everything is done online through apps, including customer support.

These financial services are cheaper to run because they don't have to spend money on rent, electricity, et cetera.

They often offer more suitable features for young people.

However, some people still prefer face-to-face help, so it's likely a mix of digital and traditional banking will continue for years to come.

So true or false?

All banks will be digital-only in the future.

Is that true or false?

Are they gonna be digital-only or not?

This statement is false.

Some people still prefer to be face to face when being helped with something.

Due to access issues and preference, there is more likely to be a mix of traditional and digital banking in the future.

So well done if you knew that that statement was false.

For this task, I would like us to create a short script for a podcast called "Finance in the Future.

" Explain two to three financial trends and why finance in the future matters to young people today.

"So, you could choose financial inclusion or any of the trends from this lesson," Andeep says.

So when you're ready, pause the video and have a go at creating a short script for a podcast called "Finance in the Future.

" Good luck, and enjoy.

Okay, so, your script might look a little bit like this one.

So we said: Welcome to "Finance in the Future.

" Let's look at three financial trends that are shaping how young people like us deal with money.

First up is Buy Now, Pay later.

These are financial services that let you split the cost of things into smaller payments.

That can be helpful if you don't have all the money up front, but it's important to be careful because missing payments can lead to debt.

It's a trend that gives more freedom, but it also comes with responsibility.

Your script might continue: Another major trend is financial inclusion.

The UK Government is now working to make sure people who might have been previously left out, like those without a bank account or permanent address, can still access financial services.

This matters because fair access means more people can save, spend, and plan for the future, no matter what their background.

Finally, there's open banking.

This allows you to connect different apps to your bank account so you can find better deals, track subscriptions, or even get budgeting advice.

It's all about giving you more control and clearer information about how you're using your money.

These changes are making finance more flexible, more fair, and more useful for the way we live now.

Thanks for tuning in to "Finance in the Future.

" Catch you next time!

Now, your script might also look a little bit like this one.

So: Welcome to "Finance in the Future.

" In today's episode, we're looking at three big trends that are changing how money works and what that means for young people growing up in modern Britain.

Let's start with something you've probably heard a lot about, artificial intelligence.

More banks and apps are now using AI to help people manage their money.

These smart tools can suggest when to save, warn you if you're spending too much, and even sort out your subscriptions.

It takes the stress of budgeting and makes financial planning more automatic.

Alternatively, your script might continue: Another important trend is sustainability and green finance.

A lot of young people today care about the environment, and banks are catching on.

You can now get Green Savings Bonds or carbon-tracking credit cards that show the environmental impact of your spending.

These financial products let you manage money in a way that also supports the planet.

We're also seeing a rise in digital-only banks.

These banks don't have physical branches.

Everything happens through your smartphone, from opening an account to chatting with customer support.

It's fast and flexible, perfect for people who are used to doing everything online.

Thanks for tuning in to "Finance in the Future.

" Catch you next time!

So your script might focus on different financial products.

They might have been a little bit more chatty and personal as well.

But hopefully we've enjoyed this task about writing about financial products for our podcast.

We have now come to the end of our lesson on how are financial products changing the way we manage money?

And I'm gonna summarise it into a few words for us.

Some modern financial products like Green Saving Bonds and AI-powered saving apps are changing the way people manage their money.

These tools offer convenience, flexibility, and can help people build good money habits from a young age.

However, there are also risks, such as falling into debt or being excluded if someone doesn't have access to digital technology.

Key trends like green finance, open banking, and financial inclusion are shaping the future of financial services to be smarter, fairer, and more sustainable.

Understanding these changes helps young people make informed financial decisions in modern Britain.

I hope you have taken a lot from this lesson on how are financial products changing the way we manage money and have enjoyed it also.

Thank you for your efforts, and I hope to see you in the next one.