Millennials continue to be the focus of a lot of scrutiny when it comes to the intersection of culture and technology. Millennials are the largest living generation, having outnumbered the Baby Boomers for more than a year. Most Millennials remember life before the internet, and have were the earliest adopters of many trailblazing technologies that went on to ubiquity. It is for this reason that we look to the Millennials when determining the success of new technologies. If the Millennials don't like it, it's not a hit.
This is true in so many different technology sectors, but nowhere is it more true than in Mobile Banking. Mobile Banking is a diverse set of applications and institutions that let people move their money around without using a brick and mortar bank. Mobile banking includes several different industry categories, including investment, primary banking, and budgeting/wealth management. We'll cover all of these below.
Investment - Today is a time of big innovation when it comes to consumer investment platforms. Robo-advisors are the belle of the ball, and some of them are more than simple marketing creations. Companies like Betterment and Wealthfront offer immediate investment management, especially for young people or those who don't know a lot about investing their money. The fees associated with both are significantly lower than those typically charged by flesh and blood investment managers, and the returns achieved by both platforms are also an improvement.
Built on the bare-bones Electronically-Traded Fund (ETF) strategy built by Bogle in the mid-70's, these ready-made portfolios are widely diversified and cheap to buy and maintain. Users enjoy a great website and phone app combo, a lot of educational resources, goal-setting, and a constantly growing bevy of value adding features. Many people who would never have invested on their own have started with companies like these. Tiny minimum deposits get people started fast. In this new investment landscape, young people are learning that time is on their side, and robo-advisors are providing the platform to take first action.
Primary Banking - Though they're great for long term investments, companies like Betterment don't fill the need for modern banking resources. This market void gave way to a handful of new virtual banks, as well as modernization efforts from many long standing banking institutions. Whether you have an account with an online checking account like Ally, a new app from your local credit union, or a full service application for virtual checking and payments with Wells Fargo, most Millennials are using virtual primary banking.
Even traditional banks have powerful apps where users can scan paper checks for immediate deposit, without having to drive, walk, or bike to the nearest local branch. It's all about convenience and security, something that old school banks are starting to lose their reputation for. In the day of Bitcoin, currency is ever more virtual. Lots of Millennials abhor carrying cash, and as this generation continues to mature and flex its financial muscles, you can be sure that the big winner in banking will be mobile, and a hit among the Millennial masses.
Budgeting and Wealth Management - In the early Millennium, Mint was one of the big names in personal finance. Not only did it give people an easy way to fine tune their budgets, it was available anywhere you had a screen - desktop or mobile. Mint is still out there with millions of users, an update on older software based resources popular among the Millennials' older brothers and sisters, but the newest take on this is Personal Capital.
Personal Capital isn't about budgeting as much as Mint is. It presumes that users will have their budgets, spending, saving, and investment under control somewhat, though it can offer a lot of perspective in these regards. What Personal Capital really excels at is showing the user a complete view of their finances. Users sign up for an account, then quickly link their financial accounts, through primary banking, investment, and others. PC brings them all together to show the user his or her total net worth, debts, spending, retirement projections, and so much more.
For people who want to have a realistic view of what is going on in their personal finance life, it can be hard to tell when clicking between lots of different windows and accounts. With Personal Capital, all of that information is available on one screen. It takes away a lot of the guesswork of personal finance, and it's free.
In conclusion, Millennials are becoming ever more mindful about personal finance. Denied the financial start in life that their parents and grandparents had, Millennials have had to get savvy to scrape together a financial future. They're also about convenience and virtual banking. To meet both of these needs, a bunch of awesome financial resources have evolved out of the mobile and cloud spaces.
This is just a sign of things to come. As personal finance, Millennial culture, and consumer technology continues to evolve, you can bet that the future is not going to remotely resemble the past. Because the mobile device is the new wallet - source of most purchases - financial institutions are going to increase competition to rule this space. This competition offers a lot of benefit to Millennials, many of whom have student loans or slow upward mobility in their careers. New personal finance technologies offer value, personal development, education, and future growth to this powerful demographic. It's what Millennials need and want, and you can bet it is going to spread out to the rest of the marketplace.