The UK is now the third largest market in Europe for financial app downloads (with a 19% growth since 2017) yet Brits currently show significant ‘app-athy’ for technology that can help them save and invest.
The latest data3 from Wealthify, the online investment service, reveals that 11.2 million downloaded money management apps remain unused and lay dormant on mobiles and tablets. What’s more, the UK ranks 13th in the EU Household Savings report, despite being the fifth largest economy in the world. This all points to the fact that Brits are not taking advantage of the free and widely available tools that can help them manage, save and invest their money.
The rise and fall of financial app use
Ownership of financial apps is generally high, with just over 67% of smartphone users having added at least one financial app to their device. However, over 11 million downloaded financial apps are never used and those with unused financial apps on their phone will typically have three unused apps, so the question is - why are these good intentions going to waste and what’s stopping people utilising this smart technology that’s at their fingertips?
Wealthify’s research found the majority of financial apps downloaded by the public are online banking apps (93%), compared to just 7% for savings and 5% for investing apps. Collectively only 15% of the population (around 4.5 million people) use apps to help them fill up their savings, investments or retirement pots, despite them typically being free to use and designed to make the process simple, effortless and transparent. Meanwhile almost half of smartphone users actively use other types of money apps, such as voucher apps (47%) and cashback apps (46%) for things like shopping and eating out.
There is now an average of almost two financial apps on UK smartphones, with over two thirds (67%) of UK users saying they have downloaded one or more financial apps. The heaviest users are 35-44-year olds, who have on average 2.6 financial apps on their smartphone or tablet.
Useful or not?
When it comes to rating how useful money management apps are (from 1- 5, 5 being very useful), the results are relatively positive for banking apps (scoring 4), whilst all others were rated as just ‘relatively useful’ (3). Of those with banking apps, 4 in ten say they use the apps at least once a day (44%). In total, 82% of smartphone users say they now use banking apps at least once a week.
Choice Average 1-5
Online banking app 4
Cashback apps 3
Money saving voucher apps 3
Stock / FX trading apps 3
Money transfer (abroad) 3
Managing your money app 3
Managed investment apps 3
Daily budgeting app 3
Specific savings apps 3
Round up apps for saving 3
To explore the motivations behind the UK’s use of financial apps, the respondents were asked what goals they had in mind when downloading them. The top goal was to access online banking efficiently (58%), followed by almost as many (57%) who want to help manage their finances better. Around a fifth (22%) said they used the apps to help budget for day to day expenses. 18-24s are the age group most likely to see the value and benefit of financial apps to help them start saving or investing for the first time, as they are the group most likely to download this type of app, whereas 35-44 year olds are most likely to download apps with the aim of managing their finances.
Michelle Pearce-Burke, CIO and co-founder of Wealthify said: “Despite the digital revolution and a wealth of free-to-download finance apps available to help people save and invest, it is a real shame so many of these apps sit unused on people’s phones. The fact that so many are downloading these apps in the first place shows a clear will amongst people to take control of finances, which raises the question - what can financial app developers do to better engage with users and encourage the move from ‘downloaded’ to regular use? Making the benefits to the user clearer should help people’s perception of the apps’ usefulness up from the ‘average’ score users gave most types of financial app in our research.”
The Wealthify outlook
As the myriad benefits financial apps can offer become apparent to increasing numbers of UK smartphone users, their rapid rise in popularity and usage is sure to continue. It’s not unreasonable to imagine that within the next 2-3 years as many as 99% of smartphone users could have at least one financial app on their phone and be using it to manage some aspect of their finances, whether banking, savings investing or even their pension or mortgage. It’s also likely that financial app ownership will increase in parallel, with the average number of financial apps used regularly by smartphone users doubling or even tripling by 2021.
Michelle Pearce-Burke continues: “This smart technology we carry around with us has the ability to transform our lives by helping us to save and invest for ours and our children’s futures. Small changes to the way people control and manage their money can significantly improve their ability to put something aside each month for the future and over time those small amounts can really add up to a significant sum of money.
These findings should be a wake-up call for the industry: it’s not enough to simply develop financial apps, we need to ensure they are engaging with people in the right way and encourage and instil good habits. At Wealthify, our app not only helps you monitor your pot, but can help customers to reduce their fees through our circles feature that rewards people for encouraging their friends and family to try investing…. If more Brits are to make their money work harder for them, an investment app should be part of their collection.’’