Here’s how to build a smarter app that could make working families richer

Family feet

American workers need a financial tool that knows their story.

Most apps fall short.

The reality is that working families across the country face a variety of pain points when trying to improve their financial lives. Many experience volatile incomes, for instance, that make it hard to build savings. Others may find themselves shut out by mainstream banking institutions — or crushed by debt. Too often, American households experience all of these challenges at the same time, compounding the problems.

To make a real impact on someone’s financial life, technology providers need to understand how all these pain points affect an individual’s goals and priorities — and their ability to reach them. Yet many financial apps take on only one issue at a time: perhaps budgeting or bill-paying, accessing payday checks, or credit score monitoring.

That’s finally starting to change, with many early online products now expanding to become broader financial service providers. Betterment, which started out as an online investing platform, has launched checking and savings accounts. SoFi has expanded well beyond its student loan refinancing business, and now offers mortgages, checking and savings, an investment platform, and insurance products. Acorns, which starting with micro-investing, now also provides retirement savings, checking and savings, and financial education resources.

It’s a good start. For working families with layered financial challenges, these “bundled” solutions can provide a more integrated fix. For the companies, that’s going to create long-term customer relationships; for the families, it will make it easier to meet their existing financial goals and then stretch for new ones.

That’s why it’s critical that financial technology firms understand the real needs of American consumers — many of whom are indeed struggling to earn more money, withstand expense spikes, and save for the future.

As chief executives whose organizations have more than 30 years’ experience providing financial empowerment solutions, we know there are a few clear ways to create better financial tools for America’s working families.

Understand the complexity

When designing a product or tool, it’s critical to understand the interconnections and complexities of peoples’ lives. With volatile income, savings and debt, for instance, progress can be nonlinear: A recent SaverLife study of more than 11,000 users showed that despite a steady pattern of savings, clients still wound up making one withdrawal for every two deposits. A tool that forecasts savings without acknowledging intermittent withdrawals won’t deliver accurate projections. A bill pay service that fails to incorporate date flexibility will create headaches, not solutions, for users with uneven paychecks.

Steer clear of silos

Working families are often making trade-offs between time, money, and competing financial priorities. Technology designed to help working families must understand that paychecks are often not consistent and banking relationships may be fragmented or nonexistent, making it hard to pay bills on the same day each month or to automate contributions to savings. They need bundled services and partnerships between products that allow for flexibility.

Trust matters

Too many working families are weary of the financial services industry. According to the FDIC, one in four Americans are unbanked or underbanked, with 30% of unbanked saying they don’t trust banks. Trust is critical to a company winning over customers, not just for initial enrollment but for healthy, active product usage as well.

Design for real financial lives

Working families aren’t only making key decisions about money while at the bank or at home after work. They do it throughout the day — when purchasing lunch at work, buying school supplies, or paying to fix a flat tire. The right app shows up at the right places and moments; it is both relevant and actionable.

Know the upside

Well-designed, bundled tools can serve clients holistically. By doing so, they can help build trust among users, increasing adoption rates and stimulating active use. This kind of deep engagement, in turn, fosters healthier communities — and creates long-term customers with the ability to invest in their futures.

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