Some Help With Managing Money Please

The data suggests credit unions can do more with personal finance management tools.

 
 

When I graduated college in May last year (has it only been a year?) and went through the circuit of graduation parties and the like, the two most frequent “gifts” I received from friends and family were money and advice on what to do with it.

Put money in stocks and bonds.

But go experience things.

Pay off your student loans.

But invest to improve your professional skills.

There’s a reason they call it balancing a budget: we’re told to both save and spend — find the right distribution between the two and live happily ever after. If not, well, the retirement age keeps increasing for people of my generation. But I plan on retiring eventually; I’ll need to tap into something.

A little about me: I majored in English, and though I completed a year-long intensive finance program at my university’s business school, my knowledge of personal finance after graduation was uninspiring. I knew I needed training or guidance. So I turned to my current financial institution to see if it offered personal finance management tools.  It does not.

Was I missing something? Was I really going to have to use a third-party provider — another app, login, and password — when I already had all that information saved in my institution’s app? I couldn’t be the only person who looked for help from his financial institution on questions of personal finances, right?

A recent study conducted by Novantas, which surveyed 3,000 active bank customers, found that while the percentage of customers using personal finance tools has not grown between April 2013 and May 2014, interest in them has, by 19%.

Not surprisingly, the demographic group with the largest interest in these tools is Gen Y. According to the survey, 46% of those surveyed under the age of 30 responded in the affirmative when asked if they want personal finance tools. Other demographics break down as follows: 36% between 30-39; 35% between 40-49; and 21% 50 and above. The less real world financial experience we have, it turns out, the more help and assistance we want.

So where’s the opportunity?

Well, according to the survey, 32% of respondents said they use personal finance tools. However, just 28% of that group said they use their bank or credit union’s site.

While adjusting to a rapidly changing demographic landscape, the financial services industry keeps looking for the medium in which to find the next generation’s member or customer. Increasingly, that medium appears to be mobile. Not only do individuals want to see their financial statements on their smartphones or tablets, they want to see their budget and track their spending and saving habits on the go and in real time.  

Whether they’re used to prevent impulsive purchases (how many times do you ask yourself if you should really be buying this?) or just keep track of spending, personal finance tools can help individuals keep their finances on firm footing. Credit unions already offer share drafts and credit cards, products that members need. Personal finance tools help members make sure their finances remain healthy.

Of respondents who use money managing tools, 72% report doing so on third-party sites such as Mint. However, although the current statistics do not suggest these tools are successful at credit unions, the appetite for them does exist: More than 40% of these respondents said they would prefer to use the tools on their bank’s or credit union’s site or mobile application.

Third-party vendors currently control the marketplace, but the opportunity and appetite is there for personal finance tools developed by you, the credit union.

I deposit my paycheck with you; shouldn’t you help me track how I spend it?