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Banks Can Help Millennials Achieve Financial Goals with a Fintech App Approach

There’s no doubt that the world of finance is changing dramatically, as new fintech apps are disrupting the way we think about our money. Apps like Mint, Acorns, Digit, etc., are looking to solve these problems by providing a full view of one’s finances, current spending and budget habits, and how to save and invest at a micro-level.


These services are emerging in part as an answer to millennials’ financial predicaments. Millennials are facing mountains of student-loan debt, are not putting nearly enough away for retirement, and are grossly uneducated when it comes to finance. Many millennials have no clue about how dire their financial situations are.

Fintech apps and non-banking services are taking millennials by storm – as many as 73 percent of millennials “would be more excited about a new offering in financial services from Google, Amazon, Apple, PayPal, or Square than from their own nationwide bank.” What’s more, 71 percent of millennials say that they would prefer going to the dentist over listening to their banks. So, as far as millennials are concerned, non-banking fintech is the way to go.

Many banks have acquired, invested in, and partnered with fintech firms, and the number of fintech startups continues to grow. However, how is the success of these apps evaluated? While it certainly seems that personal finance apps are making life easier for millennials, it is difficult to pinpoint their success.

One of the major issues with managing one’s finances is trying to create a full picture, or maintaining good situation awareness. Situation awareness1 is defined as “the perception of the elements in the environment within a volume of time and space, the comprehension of their meaning, and the projection of their status in the near future.”

How Does Situation Awareness Apply to Managing Finances?

Breaking down the definition, in regards to managing one’s finances:

Level 1. Perception of elements – one can see where his/her spending is directed (groceries, contribution to 401k, electric bill, etc.). While many of us learned to record expenses in a checkbook register, this has evolved through viewing transactions with online banking to using a fintech app like Mint that can show all transactions (from all cash and credit accounts) and even bill payments in one place.

Level 2. Comprehension of their Meaning – one understands his/her current spending habits. Personal finance apps can provide overviews of spending categories, spending budgets, current portfolio performance and more.

Level 3. Projection of their Status in the Near Future – one can see where his/her financial portfolio is trending. Many apps provide trending or goal views. However, this is trickier due to many unknowns:

  • How the market will behave
  • How one’s salary will change over her/his career
  • Retirement age
  • Financial needs (mortgage, childcare, years living after retirement)

Because these unknowns are often unpredictable, this makes projection more difficult, especially for millennials, who are just starting out.

How Could Millennials Use These Apps to Project Their Financial Futures?

Imagine being 25 years old. Would you even be able to understand the impact of these unknowns on your long-term finances, much less make any projections?

One way in which many people typically benchmark their personal financial management is whether they have saved enough for retirement, and as a group, millennials are substantially under par.

To date, both level 1 and level 2 situation awareness is supported: you can see how much is being directed to your retirement account, and you can set unique budgets to support your life goals in conjunction with retirement savings. For example, Mint and Personal Capital combine budgeting and investing in a single location so a user can understand how much should be allocated and where.

However, a large gap remains when it comes to level 3 situation awareness: particularly when it comes to understanding how actions today impact tomorrow. For example, perhaps a 25-year-old wants to create an emergency fund. She could use the “Goals” section in Mint to save $2,000 for an emergency over one year. It will tell her that she needs to save approximately $165 per month (depending on interest). But how can she make that $165 per month happen?

Today, this would require a great deal of calculation on her end. She would need to go into her current budgeting app, and decide manually to make the following adjustments:

Cut her coffee expenses, which are $100 a month, by half  

extra $50 to savings

Get a cheaper mobile device plan

extra $35 to savings

Go out two less nights a month

extra $80 to savings


extra $165 to savings


This makes saving way more difficult than it needs to be. Instead, a solution that uses current spending data to provide proactive and incremental savings tips would help 25-year-olds today prepare to be in much better shape for their retirement.

If fintech apps provided these features to millennials, they could see:

  • Beyond the blanket message that they are over budget
  • How incremental changes can make a huge impact on their futures
  • Personalized suggestions and solutions

Can Banks Reach Millennials?

Even if millennials (and all of us) can’t predict the future, fintech apps can use the current data to inform us more about our financial future. Personal finance apps can help us to project our financial status despite unknowns. While Baby Boomers and many Gen Xers may be more comfortable sitting down with a banker or financial planner, apps provide a starting point for projecting one’s financial future for many millennials. The next step would be to offer products and services to help them reach their goals.

If banks and financial service firms can harness the power of fintech apps, they can provide a foundation for a long-term relationship with millennials. It just takes a different way of thinking.


A software services partner that is experienced in managing middle- and back-office applications for financial institutions as well as executing the digital user experiences millennials demand will drive business technology transformations in banking and financial services. Learn how NIIT Technologies’ experience in digital enablement can help banks reach millennials.

              1Endsley, M. (1988). Situation Awareness Global Assessment Technique (SAGAT), CH2596-5/88/0000-0789, IEEE, pp789-795.

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