34 Data-Backed Reasons to Develop Investment App Like Acorns
2 Nov 2017
The mobile audience is craving to achieve more using their smartphones. Mobile banking is not enough, people want to have more control over their assets. They want to invest in the stock market and help their capital grow. Micro investing is a hot topic nowadays, making entrepreneurs crazy about building investment apps like Acorns.
We dived deep into financial market research and surveys to gather 34 solid reasons why you should be considering an investment app development.
53% of all online users are Y-ers.
1. They tend to not keep cash in banks
According to research by Go Banking Rates, 69% of Americans have less than $1,000 in their saving accounts.
2. And are not very fond of traditional banking
46 percent of millennials fail to open bank accounts. As for the banks, this rejection can potentially mean the loss of significant future revenue opportunity from mortgages, credit cards, auto loans, and savings.
3. They see no difference between banks that market to them
53% of customers can’t see any unique value proposition in their own bank.
4. Y-ers tend not to stick to a single bank during their lifetime
18% of millennials switched a banking provider in last year.
5. Banks think Y-ers have no money. That’s not true at all
According to Credit Karma, 15 million Americans considered by credit bureaus to be “thin files,” which means that they have too little credit history to generate a credit score.
6. Millennials are more creditworthy than you think
The AdAge says Generation Y will spend an estimated $10 trillion over their collective lives. Young people aged 17-34 today will reportedly spend more than $200 billion annually starting in 2017. According to the Bureau of Labor Statistics, by 2020 Y-ers will represent 46% of the workforce.
7. Branch location is no longer a key factor for them
Only 13% of Gen Y cited convenience as most critical in bank selection. Convenience is only slightly more important to Boomers, with 20% citing convenience as most influential in their bank choice.
8. Y-ers care about money
And according to a recent Fidelity study, 39 percent of millennials worry about their financial future “at least once a week.”
9. Young and wealthy
Because of this high liquidity — a $7 trillion by 2020 — Millennials are pretty attractive customers for financial institutions.
10. Millennials care about their investments
According to the research by Invstr, 70% of respondents admit that they feel worried about their future finances.
11. They tend to manage their funds online
Gallup revealed that 72 percent of millennials use online banking services on a weekly basis — compare that to the 21 percent of Gen Y-ers who have never paid a bill with a check in their lives, according to a Western Union study.
Per Gallup, 52% of Americans have money invested in the stock market.
12. Online investment is a trend
77% of those who invest in stocks said that they did the majority of their banking and investing operations online.
13. Nothing is OK about the current state of the investments market
35% of respondents said that they don’t feel ok with stock investments and 38% mentioned that they feel barely comfortable.
14. People don’t like mutual funds
According to Forbes, between 2001 and 2012, 7% of mutual funds were failing every single year. And within the same time period mutual funds have raised their fees by 84% – from 0.62% of assets to 1.15%.
71% of Boomers use online banking weekly.
16. Tech giants are in the spotlight
According to a study by BBVA, 73% of respondents feel more excited about new financial offerings from the likes of PayPal, Google, Apple and Amazon than of their banks.
17. We are going to pay in other way
Blumberg Capital: 70% of respondents say in 5 years, the way we pay for things will be totally different.
18. Online banking is the most popular channel
81% of Millennials and 72% of Boomers interacted with their bank online in the past 30 days.
19. Chatbots are widely used in fintech
According to Bloomberg, by 2020 over $2.2. trillion of personal assets will be managed by robo-advisory services.
20. People tend to care about the human factor less than ever
According to Medallia Institute, Boomers care about human interaction more than Millennials do. Boomers are 2.4 times more likely than Millennials to cite an interaction with a bank employee as driving a positive experience, and 1.7 times more likely to list bank employees as a top source of frustration.
62% of Americans feel they pay way too much interest on the debt.
21. Something is terribly wrong with banking
According to a study by BBVA, 71% of respondents would prefer visiting a dentist rather than going to the bank.
22. 1 out of 3 millennials don’t care about banks at all
Millennial Disruption Index, a three-year survey of over 10,000 millennials, states that 33% percent of millennials believe that they will eventually not need a bank at all.
23. Banks are supposed to adapt or fade away
According to a recent survey by Blumberg Capital, 60% of Americans feel banks fail to keep up with their needs and 57% believe traditional financial institutions will not exist as they do today within their lifetime.
24. Almost everyone loves Fintech
Blumberg Capital: nearly 75% agree that FinTech provides consumers with more power over their finances.
25. And online banking
Blumberg Capital: 70% of Americans believe that new solutions such as digital banking, online lending, payments, and financial services, are making financial transactions easier than ever.
26. Tech treats underbanked and wealthy people equally
Blumberg Capital: 65% of Americans agree that FinTech levels the playing field by providing access to services previously only available to the wealthy.
27. Fintech companies are considered to be helpful
Blumberg Capital: 69% of Americans think the latest tech for financial tools will help everyone be better off financially.
28. People want banks to be more transparent
Blumberg Capital: 74% of Americans agree that it would be helpful if there was an automated and customized way to make sure they never miss a payment and always minimize the total interest expense on their loans.
29. And focus on SMB rather than enterprise
Blumberg Capital: 80% of Americans agree that financial institutions need to focus more on helping the average consumers and small business owners rather than the top 1% and big business.
30. Banks are simply expensive
Blumberg Capital: 79% of Americans stated that they want access to flexible borrowing options that minimize their interest payments.
31. And demand too much interest
Blumberg Capital: 59% of Americans said they would borrow from or loan money to a friend or family member to grow a small business if it meant paying less interest to banks.
32. The underbanked are craving for banking services
Blumberg Capital: 76% of Americans believe that financially underserved people such as those with low FICO scores or bad employment histories need access to options for loans/credits outside of traditional banks.
33. Traditional banking is not a must anymore
Blumberg Capital: 33% believe they won’t need a bank at all.
34. Innovation will come from outside the industry
Blumberg Capital: 50% are counting on tech start-ups to overhaul the way banks work.
Why Investment App: Takeaway
That being said, traditional banks deliver fewer products and services than people require. Tech companies shouldn’t miss the opportunity to come up with their innovative ideas and disrupt the market with a micro investing app. Thanks to the modern technology stack, even the most daring business ideas can be brought to life with decent domain knowledge.
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