Online Banking–On Demand Money Management
Online banking may be the needed cure for the notoriously impetuous Gen Y when it comes to saving. The many different tools currently implemented by the large players in the banking industry aim to facilitate money management for even the most frivolous of spenders.
Is Gen Y finding it easy to save?
The odds however, are stacked against Gen Y in some respect to savings practices. With the United States Department of Labor reporting an 8.8% unemployment rate, finding a job following graduation is a daunting task. Adding to the fears about sustainable income are the impending student loans that average about $23,000 for most students, according to the National Center for Educational Statistics. Even if a job is procured relatively quickly post-graduation, day-to-day expenses heaped on top of student loan payments can make saving for the future a near impossible task for most in the Y Generation.
According to Milwaukee financial consultant Graham Baxter, “the precarious job market and growing student debt does not deter most members of Gen Y from wanting to save. If anything, Gen Y has had a front row seat in terms of tangibly knowing the value of having money saved away.” With job prospects difficult to come by, “depleting a savings account or newly started 401K may be the only option while interviewing for potential positions and scraping by,” explains Baxter.
“Gen Y has first-hand experience with the financial instability and I believe that inspires most to build a 3-month cushion of their salary – just in case. The issue is not whether Gen Y has the will to save, but whether they have any discretionary income following the payment of their utilities and debts left to save,” furthered Baxter.
Tech Savvy Money Management—Online Banking Steps Up
Simultaneous to the growth financial struggles of Gen Y, the banks have accelerated their use of the newest online applications to attract the tech-savvy generation. PNC Senior Vice President and Area Manager, Paul Sfanos, describes the latest patented product of the PNC Bank Online Banking Services, “Virtual Wallet®, allows you to take a picture of the front and back of a paper check and send a picture message of the image to be directly deposited in your account – essentially eliminating the need for bank tellers and ATMs.” This new deposit capture function is a free feature offered to all PNC Bank customers.
Mobile applications are the new wave in online banking technology. For years, banks like JP Morgan Chase, PNC and Wells Fargo have offered services like account and transaction viewing, transferring of funds, ATM and branch locators. With new mobile technology these same banks now have mobile applications that can be downloaded for free on most smart phones and utilized for all of these services without extra fees. Beware however of messaging rates that will vary depending on the mobile provider.
Chase, PNC and Wells Fargo offer the option to perform standard banking transactions via text messages with the use of a 5-digit phone number and text code. For instance, Wells Fargo allows customers to text the code (ACT) and the customer will instantly receive an up-to-date report of the account’s recent activity.
Smartphone apps track and warn
Chase MobileSM has created its mobile application for iPhone® and AndriodTM. Wells Fargo’s mobile banking services can be downloaded for iPhone®, AndriodTM, Blackberry® and Palm devices. PNC Bank has its application available for iPhone®, AndriodTM, Blackberry® and Windows Mobile. All of these banks encourage mobile users that do not currently have a device of one of these brands to continually check back on their compatibility options as new devices are updated regularly.
In general, mobile applications provided by large banking institutions facilitate the banking process for their customers who are already heavy-users of mobile technology. According to Sfanos, “The applications are highly targeted for Gen Y and are intended to ease the process of money management and eventually to create a saving habit.”
In addition, to the basic functions of the banking transactions the online and mobile options for these banks allow customers to set budgets, wish lists for savings vehicles and alerts to notify how close one is to attaining a financial goal as well as how close one is to overdrafting.
“Mobile banking places the responsibility of money management literally in the hands of the consumer,” explains Baxter.
Gen Y is constantly on their phone for business or personal use and the alert systems available are so sophisticated and customizable, it should no longer matter that Gen Y on whole doesn’t know how to balance a checkbook. The accessibility of your money, the convenience of both online and mobile banking and the alert systems in place make it nearly impossible for someone to overdraft. The new tools help Gen Y budget and get on track financially.”
It appears that the implementation of mobile and online banking is a win-win situation for the banks and the Gen Y consumers. From the bank’s perspective, if a customer has an online account with bills automatically withdrawn on a monthly basis, and the customer is being responsible by checking the status of the account regularly through a mobile device, there will be little reason for that person to switch accounts on a whim. Meaning when that same consumer hopes to expand his or her banking services to include a home loan or a 401K, he or she will already have a comfort level maintaining the accounts already established at that bank.
The financial institution views the new technology as a means to keep a lifelong customer; while the customer simultaneously finds an efficient and effective way to manage money. The question that remains is whether or not the economy will allow for Gen Y to make use of its convenience and begin building nest eggs and 3-month salary cushions. That answer, unfortunately, will become clear only in time.