The first wave of banking and fintech apps got high marks for delivering features that allowed time-crunched users to tackle important tasks. But the next wave of personal finance apps is going one giant step better by not going it alone. Driven by the realization that there is real strength in numbers, smart fintech companies are pairing, partnering and joining forces to deliver apps that offer life solutions (not point solutions) aligned with users’ lifestyles, life stages and context at the magical “mobile moment” when they reach to their fiercely personal devices for seriously helpful assistance.
Last week’s tie-up between Acorns – the fastest-growing micro-investing app in the U.S. with over 2 million investment accounts – and Clarity Money, the rapidly growing personal finance app with 450,000 users founded by Adam Dell, brother of Dell Technologies CEO Michael Dell, is the latest in a raft of announcements by fintech startups determined to redefine personal finance.
Revolut, the app-based digital only bank, announced a partnership with pension manager PensionBee, allowing Millennials to combine their pensions in one plan, adding more pensions as they switch jobs. Starling Bank in the U.K. became the first in the country to partner with Transferwise, giving Starling customers direct, in-app access to TransferWise’s money transfer services. Stock trading app Robinhood, which already teamed up with StockTwits’ real-time social network for the financial and investing community, added TradeIt to its roster of partners, ensuring users can view brokerage accounts, place trades, and fund their account without exiting the experience, no matter which broker they use.
Little wonder that App Annie calls out finance apps as one of the two top app categories poised for massive growth (the other is mobile commerce). Drawing from data offered exclusively to Forbes, Singh notes that the last two years have seen “phenomenal growth” in app sessions. In the U.S. alone app sessions on Android are up 50% to reach nearly 22 billion, up from 14 billion in 2014. In Europe (including Russia and Turkey) app sessions on the Android platform increased a whopping 180% to reach over 55 billion sessions in 2016, up from just under 20 billion sessions in 2014. Overall, App Annie counts around “200 billion financial app sessions globally across iOS and Android.”
Automated investing and smart savings
This is the ambitious plan in the mind of Noah Kerner, Acorns CEO. “A fundamental problem for consumers is that fintech is making the financial services space increasingly fractured,” he explains in an email response to my questions. “This means that a person may have five or more apps to manage their money. Since we all have limited time and patience, there will ultimately be a ‘re-bundling’ of services to meet the needs of the time-crunched consumer.”
Acorns’ overall strategy – and the partnership with Clarity Money – “follows that logic.”
In practice, the Acorns app, which targets users with under $100,000 household income, allows users to invest spare change from everyday purchases. (In the background, so-called “smart portfolio algorithms” help users accumulate wealth and automatically invest in a low-cost diversified portfolio of exchange-traded funds offered by top asset managers, including Vanguard and Blackrock.) Acorns, which recently completed a $70 million series D round, is on track to do 1 billion trades in 2017.
Launched just last year, the Clarity Money personal finance mobile app uses artificial intelligence and data science to make “smarter” financial decisions. In practice, Clarity Money analyzes its users’ financial habits and makes suggestions on how they might save money. Some features include cancelling wasteful subscriptions, lowering bills, finding users better credit cards, getting users’ credit scores and creating savings accounts.
The two apps combined take a lot of the friction out of saving and investing. On one hand, Clarity Money users can use Acorns’ automated investing features, which round up purchases made on their debit and credit cards (for example, turning a purchase of $8.46 to $9.00 and investing the additional $0.54 into a diversified portfolio of ETFs). On the other, Acorns’ users can see a snapshot of their investing activity in the Clarity Money app.
Keep it simple – and real
Making it super-simple to set aside money is a natural fit with Millennials, a demographic that demands apps that take the complexity out of personal finance. But marketers need more than a compelling value proposition to drive downloads and – ultimately – lasting loyalty among mobile-first Millennials. They have to deliver clear, consistent and contextual campaigns that are compelling, not overwhelming.
Personal experience and deep understanding of the demographic are the inspiration for a string of winning campaigns that “don’t crush your day” with high pressure or hard sells, Atiyeh recalls. Understanding that Millennials are likely to tune out pitches that preach about the benefits of saving now for a rainy day or retirement, user acquisition efforts communicate how users can improve their “financial wellness” now (not later) through cancelling old subscriptions, watching spend on Uber or just signing up for better credit cards, he says. Another plus is to purposely borrow from Tinder – integrating the most right-swiped names on the dating app in 2016 (such as Hannah) into creatives to ride the crest of the Zeitgeist.
Speaking of time, Atiyeh tells me campaigns also pay close attention to context, making sure mobile app advertising is delivered at key periods (times of the day and months of the year) when Millennials are likely to engage, not ignore. At first, he was “baffled” when he noticed “most users sign up for the app and link their accounts during the working hours of 9am to 6pm.” But it makes sense if we consider the massive increase in“micro-leisure moments” – minutes of downtime on the job and elsewhere when Millennials use mobile and apps to get stuff done. (His tip: a must-read finance apps report that tracks costs, conversions and the impact of factors – including seasonality – on finance app events including installs, registrations and other deep-funnel events such as in-app purchases. The research suggests summer is a top time to double-down on user acquisition efforts, with consumers 30% more likely to purchase mobile financial services.)
No “shilling” allowed
Unlike Clarity Money, Acorns doesn’t purposely target Millennials, but it has had amazing success at acquiring them just the same. Sami Khan, Acorns Senior Director of Marketing and seasoned Mobile Hero (likewise recognized by Liftoff for his app marketing accomplishments), tells me it’s about influencing behavior by walking the talk. “You have one second to capture their attention and it had better be honest, smart and clear,” he explains. “If you’re shilling, they’ll smell it a mile away.”
Millennials also respond to advertising that suggests, but never demands. As Khan put it during our podcast interview, that means helpful messaging and no-brainer ad creatives. In fact, one of Acorns’ most successful campaigns to date on Facebook showed a simple cup of coffee. Instead of hitting them over the head with the wisdom of a long-term objective, we hit on their daily habits,” he says. “It gently reminds them that they could be saving and investing with every cup they buy.”
It makes sense for financial apps to focus on acquiring and engaging Millennials first, a segment accustomed to mobile and apps. But it’s also important for fintech companies to widen their net as these apps gain traction. “Finance apps are where shopping apps were a few years ago,” notes App Annie’s Singh. Indeed, we’re nearing the tipping point in a market where a broad range of consumers are underserved and underwhelmed by their financial services experiences. The pressure is on fintech companies to join forces – and integrate their apps – if their businesses and their users are to prosper.