Young adults today have a healthy experience with online digital banking services in today’s society. The current providers of banking services allow young adults to manage their finances with ease, flexibility, and independence they have never experienced before. Through mobile applications, internet banking, and exclusively online banking services, youngsters are enabled to manage real-life financial problems practically to make efficient financial decisions and develop successful financial behaviours.
Digital banking is the process of delivering classic banking services through new technologies, using web or mobile resources for customers to operate accounts, pay bills, transfer money, or even apply for a loan. This shift from traditional to online has been most preferred by the young generation, especially Millennials and ‘Gen Z’.
The benefit of using digital banking is convenience, especially for young adults. Notably, through the new mobile banking applications, young people can be in touch with their bank anytime they want, perhaps to pay a bill, transfer some cash or check their account balance. That flexibility gives them the ability to monitor their spending more closely, which is important to prevent one from overspending, being overly committed to a certain budget or refraining from achieving their saving targets.
Moreover, digital banking has reduced most of the charges imposed by physical commercial banks. This is especially true for young adults who have inconsistent earnings or in the process of starting to develop a career.
Incidentally, most of the features featured in the digital banking apps are the ones that can be used to teach customers better financial practices for enhanced control. Services like spending trackers, saving targets, round up services (where change from each purchase is saved or invested) are all ways young people can learn how they spend and work towards their goals.
For instance, Chime applications in US where users are provided with immediate control on every dollar being spent- a good approach in managing expenses. Another capability of some apps is the prediction of the future budget and an individual plan for young people, allowing to make rational financial decisions.
It is common to find that young adults are able to sign up for digital banking tools that offer saving and investment options. Savings solutions include features like putting away a certain percentage from the paycheck or rounding up the daily purchases and putting the difference into the savings account. Such regular small steps do not overwhelm young adults in saving more money for an emergency or their next financial plan in the future.
In addition, while some of the digital banking apps and some of the fintech apps allow customers to invest through micro-investing apps such as Acorns or Stash, the choices exposed the users to invest in micro-investing portfolios with small amounts of money into diversified portfolios. This keeps the young adults investing tiny amounts of working capital despite the little disposable income they possess, which creates wealth through the compounding effect.