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The rise of alternative banking and finance apps – what does it mean for more traditional banks?

Written by Jenni Hill: Content executive.
· 4 minute read

We fill our wardrobes with clothes bought on ASOS rather than trawling the high street; we go on dates with people off Tinder instead of chatting people up in bars; and we Whatsapp our flatmates despite them being in the very next room. With our lives becoming increasingly anti-social and our need for instant gratification greater than ever, is it any wonder that we’re increasingly likely to manage our finances online too?

For far too long, finance companies failed to keep up with technology and evolve in a way that fits effortlessly into our lives.

But thankfully, over the last few years, there’s been a shift in the finance world and forward-thinking companies are showing a willingness to change. Starling and Monzo are two of the most popular early initiators, paving the way by completely overhauling the way we bank and digitising how we handle our money; MoneyDashboard is helping people track their income and expenses across all bank accounts with a handy mobile app; and Plum is helping people invest in their future with the help of Facebook chatbots.

As a result, traditional banks are under increasing pressure to modernise the way they operate too. Online banking is nothing new and every bank from Santander to TSB enables customers to bank online, but even this is beginning to become outdated.

At the start of the year, Monzo trended on Twitter as a result of its #YearInMonzo tool. The digital bank’s customers received a notification to say that they could review their 2018 spending habits in a series of charts and graphics.

Not only did hundreds of customers take to the Monzo forum to discuss their year, many shared screenshots of their spending on social media.

If there’s one thing we millennials are good at, it’s turning our dire financial situation and occasionally reckless spending habits into memes.

Not only did Monzo’s annual summary serve as a potentially eye-opening awakening for many customers, it also proved really good for data. From highlighting the shocking amount people spend on rent to showing just how many of us reluctantly get our books from Amazon rather than Waterstone’s, it was interesting to see how we spend our money. We’ll happily sit chuckling to ourselves while the world around us bursts into flames.

 

You’d usually struggle to encourage the average banking customer to share screenshots of their online bank statements online – and for good reason – but as soon as it’s presented in a fun and digestible way, millennials won’t hesitate to sharing their spending on social media in an often self-deprecating and confessional way.

In an age where brands are begging influencers to promote their products and services online, it’s surprising that traditional banks aren’t more willing to follow in Monzo’s footsteps and modernise in exchange for free publicity.