MoneyLion offers a low-cost financial service tool that integrates investing, banking, lending, and financial wellness. Using the brand name RoarMoney, the company also offers a virtual debit card for contactless payments and Instacash with a free overdraft service. With Money Lion’s Shake N’ Bank program, customers earn cash every time they spend $10 or more with their bank card. To determine the amount they get back, users literally shake their phones and a random amount up to $120 shows up.
To guide financial wellness, the Financial Heartbeat program of MoneyLion rates customers from 1 to 10 on these categories:
1) Save measures financial preparedness; how well a person can pay expected and unexpected expenses.
2) Spend measures purchasing in relation income available.
3) Shield determines how well you understand and organize your insurance needs and coverages.
4) Score creates a Bottom of Formcredit score to assess overall credit health based on debt usage and interest rates paid.
For additional information on FinTech and financial wellness, click here.
Have students talk to others to learn about the features of banking and money management apps they have used.
Have students create a visual proposal (poster or slide presentation) for an app that would help people better manage their money and improve their financial wellness.
What features of an app or FinTech product might help people improve their financial wellness?
Describe actions a person might take to evaluate an app or FinTech product.
Banking options continue to expand. Neobanks refer to financial services providers that appeal to information-hungry consumers comfortable with technology. Many are FinTech start-ups that offer checking and savings accounts, debit cards, loans, and budgeting guidance through digital channels and mobile apps.
Neobanks typically do not have physical bank locations, although some partner with existing banks or credit unions. Some consider PayPal an early neobank example as a result of being linked to bank accounts and payment cards. More recent examples of neobanks include GoBank (a brand of Green Dot Bank), SoFi Money, Varo Money, Wells Fargo’s Greenhouse, and Chase’s Finn.
Commonly viewed benefits of neobanks are:
lower costs than most traditional financial institutions; access to large ATM networks with no fees.
attractive to underbanked and unbanked consumers who use prepaid cards, check-cashing services, and consumer credit companies.
clear communication of fees and charges; usually no overdraft penalties since you can only spend what is in your account,
enhanced technology for basic banking activities as well as algorithms for budgeting, money management, and wise spending.
ease of loan approval with technology-based methods for obtaining credit, along with access to loans by smaller enterprises.
Some concerns associated with neobanks include:
a lack of physical bank branches.
may not be chartered as financial institutions with government regulators, also lacking deposit insurance.
no recourse may be available when malfunctions occur with an app or mobile connection.
not appropriate for individuals who make cash payments and deposits.
As banking alternatives evolve, neobanks will likely become more numerous expanding into new products and services. At the same time, traditional financial institutions will seek ways to offer FinTech products to serve an expanding technology-oriented customer segment.
Can you imagine getting paid each day that you work? That’s the idea behind Instant Financial’s app, which puts cash in the hands of workers on the same day they work. This program attempts to reduce absenteeism and employee turnover for restaurant chains.
At the end of each workday, employees may take 50 per cent of their pay for that day and transfer it to an instant account; the other half is paid at the end of the regular pay period. Funds in the Instant account may be accessed with a debit card or transferred to a bank account.
The app can reduce the use of payday loans, with exorbitant borrowing rates, as workers have access to funds between pay periods. Instant Financial makes money from fees charged employers and merchants when debit cards are used; although employees may pay ATM fees.
A major concern of the app is that it might discourage long-term financial planning. Poor budgeting habits could result in increased use of debt due to a lack of funds at the end of the month. Employees who use the app are encouraged to practice wise money management, including creating and building an emergency fund and other savings.
While beneficiary, collateral, and fair market value are familiar to many, these terms can be especially confusing to those with limited English-language skills. In an attempt to assist various people, the Consumer Financial Protection Bureau has created the Newcomer’s Guides to Managing Money to provide recent immigrants with information about basic money decisions. These guides offer brief suggestions to those who are new to the U.S. banking system. The guides also include guidance for submitting and resolving problems with a financial product or service.
The Newcomer Guides include these topics:
Ways to receive your money, comparing cash, check, direct deposit, and debit cards.
Checklist for opening an account, to assist with starting a bank or credit union account.
Ways to pay your bills, providing guidance on whether to pay by check, debit card, credit card, or online.
Selecting financial products and services, providing assistance on deciding which financial services are right for various household situations.
Print copies of the guides can be ordered or downloaded. These publications are available to English and Spanish with additional languages to be offered in the future.
For additional information on money guides for newcomers:
Each year, it seems that banks are reporting ever higher profits. How do they make so much money? By charging customers service fees!
Here is a list of six fees that you should avoid:
ATM Fees-It’s important to know where ATM’s are located that are in your network. This will help you avoid a charge to use another bank’s ATM.
Account Fees-Check the fine print. Is there a fee if your balance falls below a certain limit? The limit fees are monthly and can really add up.
Overdraft Fees-Know how much money that you have to spend. Budget wisely and make sure that you have a cushion in your checking account, in case of unexpected expenses.
Fancy Checks-How cute! How much do those Frozen Personalized checks cost? The reality is that the checks and the shipping costs can be very expensive. There are numerous options to acquire cheaper checks (Sam’s club, BJ’s, Costco, Walmart). One more thing to consider: checks are used much less frequently today, so, that box of Frozen checks might last a really long time, make sure you like the design.
Credit Reports-You can get a copy of your credit report for free from AnnualCreditReport.com, so, don’t pay for one.
Loan Interest– As an incentive, banks offer a discount by utilizing more than one of their services. You might get a lower rate, if you agree to direct deposit, in exchange for a reduced interest rate on your loan.
Bottom Line: Do your homework when it comes to bank fees. There are many ways to avoid spending money on unnecessary fees.