-
Qapital, which launched its app in Sweden in 2013, is making its American entrance. It is the latest example of how firms are trying to inspire young consumers to save and mashes personal financial management with money movement.
March 5 -
Apps that help people manage their money on a day-to-day basis are all the rage among millennials. Here are the most effective of the bunch.
September 10 -
USAA's newest app, Savings Coach, analyzes financial data to recommend small amounts of money to save and invites members to take savings challenges, then moves the money upon the member's approval. The app comes at a time when millennials have a negative savings rate.
July 28 -
When people talk about the issues that now imperil community banks, they focus on things like low net interest margins and excessive regulations. But it's a dearth of young talent that could wind up dooming small banks.
September 16
The bank call center agent waived my overdraft fees and said, "That brings your balance to $2.43. Go crazy on the 99-cent menu." I laughed at the blunt assessment. But then I cried.
I was just out of college, pursuing my dream career in journalism and living in Brooklyn on a salary that made anything but rent and utility bills difficult to afford.
Financially I felt like a butterfly in a spider's web.
At that time my budgeting probably would have reinforced stereotypes about the apathy and habits of millennials. What was left in my checking account was to spend on a night out, a latte or a new skirt. As an optimist, I did not focus on what my dad would have wanted me to consider given his accountant roots: surprise medical bills, higher gas bills, and longer-term goals like buying real furniture. So I engaged in high-stakes account balance approximating.
Looking back, my first piece of advice to my younger self then would have been to stop living in denial about my finances and to think bigger-picture. But today I could have also benefited from the sea change in how companies are targeting millennials with mobile apps in a bid to move my generation onto a savings track.
To be fair, not all assessments about millennial savings practices come to the same conclusion. Yet there is a strong suggestion that younger Americans aren't as mindful about their longer-term financial position as they could be.
Data compiled by Moody's Analytics in 2014 found adults aged 35 and under had
According to PwC, nearly 30% of millennials
Eight years ago, I'm sure I could have saved if I tried. Something, anything. But at that time, savings to me meant saving for retirement or buying a home – things that felt unattainable. I was focused on affording that one dinner out, not saving for a rainy day. And I didn't own a smartphone. So what did I do? Not much except feel nauseous at the end of each month.
But as an increasing amount of banks and nonbanks focus on millennials as a critical customer segment, the digital vehicles for assisting young customers to save far exceed what I had when I was 23. Today the young and technically savvy have mobile app options that will crunch data to help users build savings habits.
In addition to Chime, the newer crop of services working to appeal to millennials include
The big idea for companies trying to appeal to millennials through smartphone apps is the Mary Poppins approach: Turn a mundane task into something fun, or at the very least, make the chore easier to accomplish. Equally important is to create an experience that breaks big goals – buying a home, taking a trip – into small tasks like actively moving even small amounts of income to a savings account every month, and provides positive reinforcement when a user makes progress.
True, there are risks in relying on digital tools to stay liquid. Digital balances or forecasts aren't always accurate. The recent
But there is so much potential to help inspire individuals to engage with their money digitally.
Of course, digitalization doesn't assure millennials' interest in their banking. A much-cited survey
Still, fintech progress gives institutions constructive tools to recommend to 20-somethings. As part of USAA's marketing of its digital tools, phone agents will plug the institution's savings app when members call in to ask for overdraft forgiveness.
Financial services companies should do better than to advise customers to spend pennies on fast food.
Mary Wisniewski is deputy editor at BankThink and fintech reporter for American Banker. She can be reached on Twitter