Wanted: Apps for Clarification and Simplification
Consumers seek financial mobile apps not only for convenience or ease of use, but in some cases also to clarify what they may see as the muddy, dense topic of personal finance. Millennials especially are looking for apps that simplify their finances, but Gen X and even baby boomer consumers are also looking for added value from their banking technology.
According to a recent Bankrate survey, 17 percent of all respondents said they have at least one app for budgeting. This percentage grows to 34 for those between the ages of 18 and 34. Millennials find it easier to consolidate all their personal financial decisions on just a handful of apps, and many say that it helps them plan and save for the future.
What to learn from existing money management apps
Budgeting apps like Mint, PocketGuard and You Need a Budget are extremely popular with millenials, and financial institutions would do well to learn from what these apps say about consumer preferences. More importantly, fintech-powered technology is enabling these apps to establish themselves as the primary mobile financial app for consumers, relegating banking apps to the back line. Unless financial institutions bridge the technology lag — which can include partnering with fintech — then they may find themselves with powerful intermediaries, and other problems like security and data concerns.
Simply cutting off data access for these apps is not an option either. Banks such as JPMorgan Chase and Wells Fargo attempted to do just that but quickly found themselves in hot water. In early 2017, JPMorgan Chase reached a landmark agreement with Mint that served as a new standard for interaction between financial institutions and fintech firms.
Credit unions should instead take a look at what apps like Mint are doing: building a dashboard from which consumers can quickly analyze their finances. In short, an all-in-one app for financial planning.
Other things credit unions can learn from fintech app design:
- Reduce friction
- Complexity is hard to sell. There is an opportunity here for credit unions to use technology to better serve their members by finding out where the pain points are and removing them. This is especially important for small- or mid-size financial institutions, who do not have the resources to compete directly with what fintechs offer.
- Organize around consumer goals
- Consumers have goals to meet, how are financial institutions helping?
Financial institutions want to get to the point where they are seen as a partner in planning for their customer’s financial success. Consumers want feature-rich technology that allows them to take more of an active role in their day-to-day financial interactions, and mobile apps can help.
Beyond just short-term needs, consumers also desire applications that help them see “the bigger picture,” or long-term goals. Primary financial goals shift with age and financial institutions should take great care in finding solutions that work for everyone.
Communicate your solution
Credit unions who have innovative and game-changing new apps may find themselves muscled out by a lack of marketing. One thing many fintech and especially big tech companies do very well is amplifying the reach of their brand. Keeping open social media channels and using proper branding best practices encourages word-of-mouth. Members don’t know about all the great tools you have unless you tell them.
It’s important for all credit unions to keep in touch with their members across multiple channels. Clear lines of communication are the easiest, and often quickest, way to gauge frustration or discontent in a credit union’s membership, especially when it comes to dealing with technology. Members expect their financial institutions to keep up not only with other banks and credit unions, but also fintech and big tech offerings. A shiny new app may not be enough to convince a member to switch financial institutions, but it could be a step forward.
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