How To Meet Your Goals Using Nontraditional Financial Services

Start saving with new customer-first tools.

While the stock market continues its incredible bull run, most Americans remain on shaky financial ground. According to the Federal Reserve, 40% of U.S. families would suffer a financial hardship over a $400 emergency, and 25% have nothing saved for retirement.

America’s savings crisis reflects the harsh reality of rising costs and stagnating wages, but for many, a lack of financial education plays a major role. Some schools have begun to introduce financial literacy courses for students, which could be helpful for these generations. Those who have already left the classroom, though, must educate themselves.

With so many options available, where should people begin the search for financial freedom? A good first step is learning to identify and work with customer-centric financial services, which can help even the most savings-strapped Americans prepare for emergencies and start building for the future.

Seeking Customer-Centric Financial Services

Big banks aren’t known for their customer-friendly policies. From account and overdraft fees to more sinister issues like Wells Fargo’s $575 million fake account scandal in 2016, it’s clear that many institutions favor stockholders over customers. However, not all financial institutions fall into this category. Even some former offenders are redesigning their offerings to meet the rising expectations of customer-centric banking, with 85% of traditional banks prioritizing digital transformation.

New options enable users to exercise more awareness and control of their financial lives. One mobile-only bank, Monzo, provides users with summaries of late-night purchases and gives them the option to cancel them if those impulse buys don’t sound so enticing the next morning. Credit union USAA uses its digital tools and agent empathy to uncover the needs of customers and provide relevant helpful recommendations.

Where major financial institutions used to hold all the cards, today’s customer expectations are starting to shift the balance. Social media allows customers to put banks on blast when they don’t put customers first. New and varied options, including online banks, let customers take their business elsewhere quickly and seamlessly. Clearly, the people now have the power — but what should they do with it?

See: Here’s How Much Americans Have Saved For Emergencies in Every State

How To Improve Financial Well-Being

Customers today have plenty of options to save more, spend less, invest smarter and optimize their financial lives. Consider how these three service areas could make a difference:

1. Use fintech apps to set yourself up for success.

Small changes over time can add up to incredible savings. Seek out apps that help you meet — or exceed — your financial goals by transforming banking from a chore into an enjoyable challenge.

Qapital, for example, uses behavioral science to help users gamify their savings and keep weekly expenses in the “spending sweet spot.” When users meet customized triggers — such as skipping a Starbucks run — the app prompts a deposit into savings. Little investments add up, helping the cash-strapped masses save for emergencies without the mental struggle of big money transfers.

Many similar financial companies now help users take control.

“For most fintech organizations, the primary advantages are an innovation mindset, agility (speed to adjust), consumer-centric perspective and an infrastructure built for digital,” said Jim Marous, fintech writer for Forbes. “These are advantages that most legacy financial institutions don’t possess.”

2. Improve your investments with behavioral advisors.

Fintech apps aren’t the only psychology-based services in finance. Financial advisors have begun to consider clients’ individual needs in more detail as expectations of personalized service have risen in recent years. It’s important to work with financial institutions that see customers not as number signs, but as human beings.

Some wealth management firms, like JOYN, are using behavioral psychology to help customers factor in their human tendencies as they pursue their financial goals. Rather than encourage users to act like robots or keep everyone on the same path, JOYN advisors practice behavior-based financial flexibility.

Wealth management firms that use elements of behavioral psychology work to enable customers to recognize the stressors and life events — such as stock market slumps or even stress at work — that may lead them to make regrettable financial decisions. They then help customers avoid or mitigate those circumstances.

3. Get better customer service through digital-only banks.

According to research from financial services technology provider FIS, the customer satisfaction scores of digital direct-to-consumer banks top those of traditional financial institutions, with 63% of direct bank customers in the U.S. reporting they’re “extremely satisfied.”

These banks don’t have physical branches, but they can still provide for all your needs and then some. Digital banks like Revolut and Atom Bank recognize the always-on mentality of the modern consumer and have designed their services to provide highly in-demand benefits including constant access, customized reporting, ATM fee reimbursement and more.

U.K.-based Monzo, which started as a prepaid debit card account, has become one of the leaders in the digital banking world. Monzo today focuses on providing a better checking account experience, which many feel larger banks fail to deliver. In addition, Monzo’s blog showcases the company’s commitment to transparency, helping users improve financial literacy and stay informed on the inner workings of the online bank. Its blog features in-depth customer budgeting stories and praises favorite user posts as well.

Could your financial life use a boost? Venture beyond traditional options to see what the future has to offer. Fintech apps, behavioral science and online banks are ready to help everyone — from the wealthiest investors to paycheck-to-paycheck workers — take more control of their financial situations.

Click through to read about how it’s costing people when they don’t understand the basics of banking.

More on Money

About the Author

With eight years of experience working in the personal finance space at GOBankingRates, Jaime Catmull has amassed an extensive network of financial influencers and experts. Now, she’s tapping that network to get the real scoop on how you can live your best financial life and increase your wealth.