Hip investing apps use your FOMO to trick you into saving money


Nothing motivates us like envy, right?

Every day we scroll social media endlessly comparing ourselves to others, minds racing:

-Whoa check out that sick jacket, I need that.

-Which reminds me, my car and apartment are so overdue for upgrades.

-Also I need to eat better and workout more so I can post more selfies and build #mybrand.

-Man, I wonder how they afford all this stuff. Do they not have student loans like me?

Marketers have always tapped into that FOMO to sell you stuff, and they’re getting better faster by watching us on social media.

A group of hip new finance companies who insist they’re not banks (but totally are banks) have figured out how to tap into your envy to make you sign up for their new financial products, and it’s working.

Apps like Acorns and Robinhood are the nemesis of stuffy old banks. They have slick apps that nail the financial Apple Store aesthetic and show you right away how to save money and invest—unlike your bank, which makes you read snail mail product pitches that look like hieroglyphics to young people.

And speaking of Apple, they have a sexy new finance app and credit card…powered by one of the biggest banks in the world. But big tech getting into banking is a whole other story.

Let’s stick with the FOMO for today. Apps like Ronbinhood and Acorns became household names for the under-35 set by making you get your friends in on the game.

These hip apps would would basically pay you to refer your friends to the platform, which plays the envy game two ways:

(1) You show your friends how cool you are for being ahead of them in the hip finance app arms race.

(2) Your friend gets hungry to catch up to you so they start to use the app more and more.

Why’s all this important?

Yeah, we know marketers are trying to trick us into buying stuff, they know everything about us, dystopian future, blah blah blah.

It’s important because it shows the finance industry is finally trying to teach us critical financial skills by playing to our psychology. If it can’t teach you to save and invest because those things are good ideas, well, it’ll have to trick you into doing it.

That’s key because a lot of people in my millennial age bracket can’t see ourselves ever retiring, since our employers would rather spend money on financial wellness plans that don’t matter to us instead of raises.

The marketers at Acorns, Robinhood and other companies have figured out how to make us help ourselves in the long-term by appealing to our short-term desires.

These companies are still startups and wear the Silicon Valley hoodies and Allbirds to work instead of Wall Street suits and Ferragamos. But they’re funded by billions in venture capital money. They’re either backed by big banks already or will be bought by them soon enough.

A lot of them rely on banks to actually deliver their services.

The point is: the future of banking is already here.

And it’s a good thing, because apps that trick you into developing good habits are a win for you and your long-term goals.

When you finally save up enough for a down payment on your dream home, you won’t be mad at Acorns for tricking you into saving—that thought won’t even cross your mind. You’ll be overjoyed to have found a home you love.

So the next time you see an ad for a financial product press your FOMO buttons, pay attention and dive deeper. There’s a good habit hidden in that messaging that will up your #adulting game.

Plus, if saving and investing helps you afford a FOMO-inducing vacation that fuels record Instagram likes, you’ll also win the envy game against your friends. #selfietime #instafamous #betterlife #thanyou
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Reference:

We Analyzed 8 Of The Fastest-Growing Personal Finance Apps Of All Time To Figure Out The Secrets To Their Success — Here’s What We Learned (CB Insights)

If every tech company is a bank now, which one can you trust? (The Basis Point)

How Will Your Favorite Finance App Break The News To You That It’s Now A Bank? (The Basis Point)

When Does Fintech Disruption Start to Eat Itself? (The Basis Point)

Credit card “created by Apple, not a bank” – powered by a giant bank (The Basis Point)

Introducing… The Bank Of T-Mobile? Can you hear me now? (The Basis Point)

Linkage: how marketers learn everything about you (The Basis Point)

Should your boss help you with your finances, or just pay you more? (The Basis Point)