Technology's Impact on Financial Literacy
Each year, MIT Federal Credit Union awards Memorial Scholarships to support our members in their educational pursuits and honor former staff and volunteers. Each applicant submits an essay on a financial topic of their choosing. One of the 2026 recipients, Leo Keran Ngueho Kana, answered the question "In what ways can modern technology enhance or harm financial literacy?" Learn more about MIT FCU scholarships here.
If the Earth’s rotation sped up by just 4% every year, the length of our days would drop to about 16 hours within just a decade. If your height grew by just 9% each year, you would be as tall as a giraffe in roughly ten years. And if the Earth’s tilt increased by just 11% annually, the planet would be completely upside down in about twenty years. People often underestimate how powerful small changes become when they compound over time. But this would be more common knowledge if there were a higher level of financial literacy in the general population. Just like these examples, a small percentage increase in a savings account can lead to enormous gains over time—a concept known as compound interest.
Financial literacy is important because it teaches people such useful concepts. The earlier one learns about these concepts, the better it is for them since they will have more time to adjust their lives and derive maximum benefits in the long run, like starting to save early so their money has more time to grow. Modern technology can be instrumental in achieving the goal of enhancing financial literacy. With the advent of the modern era, where centuries of human knowledge and research are available at our fingertips, we might naively think that everybody would be educated about everything.
However, the vast availability of knowledge is a double-edged sword: we can’t learn everything, so we pick only what we believe is relevant to us. Thus, we should use technology to help people understand the relevance of financial literacy to their lives. We could, for example, disseminate financial literacy information in people’s everyday interactions with their devices.
One approach would be creating a small “Did You Know?” section on mobile home screens that would highlight useful concepts like compound interest or budgeting. These messages would need to be brief and unobtrusive, so they inform users without becoming annoying. Another way we could use technology to improve financial literacy would be to create more social media accounts dedicated to financial education. This is a promising strategy since there are already some successful accounts doing exactly that, such as “Your Rich BFF” (3.8M followers, Instagram) and “Olive” (225K followers, TikTok). These accounts have a wide-reaching impact and undoubtedly contribute to increasing the levels of financial literacy.
However, modern technology doesn’t only have a positive influence on financial education. It’s easy to encounter conflicting or misleading financial advice online. In addition, social media algorithms often promote sensational content such as risky investment strategies or unrealistic “get rich quick” schemes because they attract more engagement. This can at best leave internet users with even more questions than they started with, and at worst, influence them to make bad financial decisions.
Nevertheless, I believe that the benefits of technology for financial education outweigh its drawbacks. When combined with a carefully designed strategy, modern technology can be an extremely powerful tool for improving financial literacy and helping individuals make better financial decisions.
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