Every morning, I browse my phone as I commute to work. I check my emails, the news, Twitter, and increasingly I open my various finance apps.
I recently logged into my investment platform app and made a new investment – £1,000 in a startup Swedish retailer. Once the money was invested, I was applauded with a series of party streamers darting across my screen. It made me smile and added a little bit of excitement to my journey.
But the buzz was short-lived, promptly followed by a thought that surely we should only celebrate if it gets me a return? Then, a further thought: was I becoming victim to the same tactics used by game developers, gambling firms, and social media networks?
The instant gratification offered by making a new investment doesnt really fit with the mantra that investing is for the long term.
Mobile phones have completely reset society. While no one gets up to check the front door unless the doorbell rings, we all log into our phones without so much as a notification. Who would ever have imagined a world where “screen-time” was such an issue?
I also have a pension app, where every day I monitor money that is being carefully managed to provide a return in 20 or 30 years time.
As we venture further into a digital world, we will start to see financial firms link with third parties to offer customers an all-encompassing, seamless service.
Lets say that you pass a shop and the week before you hovered over an online advert for a coat in that shop. Your phones location tracker knows that youre at that store, and can see that the coat you looked at is in stock and in your size, so your phone sends you an alert telling you that.
Further, your banking app lets you know that you can afford it – perhaps with the help of a loan? The opportunities are endless.
Returning to my investment in the Swedish retailer, the attention-grabbing nature of my app makes me a fickle shareholder. While asset managers have long debated the pros and cons of quarterly reporting, smart phones take the debate between transparency and short-termism to a whole new level.
You may have mistaken me for someone who is anti-fintech – I most certainly am not. In a nation where one in five spends more than half their income the same day that they get it, we need to do everything possible to help people better manage money. Technology holds the key.
Similarly, if banks, insurers, and asset managers ever want to see the days of meaningful growth reappear, they need to drastically reconsider their IT and begin to offer the sorts of experiences that social media sites and online retailers do.
But like everything else in the world of finance, the transition needs to be handled with care. For every app that prompts us to spend, we need another that automates saving. For every digital party streamer that celebrates an investment, we need an equally alluring way to comprehend that companys five-year business plan.
Building better financial technology can and must be done by learning lessons from other sectors of the economy. Essentially, it has to be done with consumers best interests at heart.