Do Millennials Need Fun Banking?
By Anna North
“We believe that banking should make your life better,” reads the frequently-asked-questions page on the website of the startup Qapital.
“But banking as we know it is too broken to do that for the majority of people, especially those under 40. So we decided to build the simple, transparent banking products that we need and want for ourselves.”
Essentially, Qapital aims to make saving money easy and fun. The question is whether that will matter.
Qapital’s app allows users to set up savings goals, upload pictures to illustrate them (“perhaps a beach in the sunshine, or a cool photo of Dwayne ‘The Rock’ Johnson”), then designate specific actions — like posting on social media or walking a certain number of steps — that will trigger deposits toward those goals.
The app has been around since March, but Qapital just introduced these triggers on Monday, and David Lumb at Fast Company writes that the startup “hopes this new feature gets more millennials saving toward their goals — and maybe paying more attention to just what they’re spending their money on.”
The startup may well find its niche. Millennials, writes Danny Crichton at TechCrunch, aren’t satisfied with traditional banks (this of course leaves open the question of whether there are any age groups who are satisfied with traditional banks). “Every time I go to a bank,” he writes, “there is a rigmarole involved as we go through the new-account-type-of-the-month, each of course with their complex tiers of fees. I know this is designed to screw me, and I don’t like it. Simplicity is golden.”
This level of openness is somewhat unusual, and young people may well appreciate it.
Whether Qapital will actually help them save is another question. As Mr. Lumb notes, savings rates among millennials are low — a report last year put the overall rate for Americans under 35 at negative two percent, meaning millennials were spending more than they were earning.
A picture of The Rock might nudge those young people who do have disposable income to bank a bit more of it. But young Americans are still struggling with uncertain employment, low wages and high student loan debt, and making saving more fun isn’t going to help with any of that.
There’s some evidence that millennial savings rates are picking up — the percentage of Americans between 18 and 34 who saved more than 5 percent of their income increased in 2014, according to one survey. And giving young people — or anyone, really — a simple way to put aside some money is a good idea. Still, it only works if they have money to put aside.
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