{"id":19954,"date":"2023-06-08T10:05:02","date_gmt":"2023-06-08T14:05:02","guid":{"rendered":"https:\/\/ifintechworld.com\/banking\/deposit-acquisition-opportunity-for-banks\/"},"modified":"2023-06-08T10:05:03","modified_gmt":"2023-06-08T14:05:03","slug":"deposit-acquisition-opportunity-for-banks","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=19954","title":{"rendered":"Deposit Acquisition Opportunity For Banks"},"content":{"rendered":"
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OBSERVATIONS FROM THE FINTECH SNARK TANK<\/h2>\n

On the heels of the success (i.e., growing adoption) of digital wallets from Apple, Google, and PayPal, some large banks\u2014including Wells Fargo, JPMorgan Chase, and Bank of America\u2014have launched their own digital wallet, Paze, through Early Warning Services, which provides the Zelle person-to-person (P2P) payment tool.<\/p>\n

Where does this leave the other thousands of banks and credit unions in the US?<\/p>\n

They might be looking to create their own digital wallet to compete with Apple, Google, and the big banks, but if they are, they\u2019re barking up the wrong tree.<\/p>\n

The Digital Wallet Opportunity For the Rest of the Banks<\/h2>\n

According to a new report from Cornerstone Advisors, The Rise of Family Digital Wallets<\/em>, community-based financial institutions should set their sights on offering a specialized digital wallet focused on helping consumers manage the finances of their Gen Z (born 1995-2009) and Gen Alpha (born after 2009) children.<\/p>\n

Americans are no strangers to digital wallets. According to Morning Consult, seven in 10 American adults use PayPal, four in 10 use Venmo and Cash App, and more than three in 10 use Apple Pay and Google Pay.<\/p>\n

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These tools, however, typically lack the features and functionality to help consumers manage their family\u2019s finances, nor do they help parents monitor, control and guide their children’s\u2019 spending activity. In addition, banks have done little to develop products to address the younger segments beyond offering \u201cyouth savings\u201d accounts.<\/p>\n

This has given rise to fintechs that offer youth- oriented banking apps or \u201cfamily digital wallets\u201d that provide children with features and functionality that allow their parents to monitor and control their behavior. According to Apptopia, family digital wallet providers Step and Greenlight are among the top 15 most downloaded banking apps in the US.<\/p>\n

What is a Family Digital Wallet?<\/h2>\n

Family digital wallets are apps designed to provide younger consumers, who would otherwise not be able to open a banking account, with the tools to begin their first foray into finances while providing parents with the ability to monitor and control their activity.<\/p>\n

In general, these youth banking apps offer some form of a savings account, a debit card and an element of education to promote financial literacy. They also typically include features that let parents control their child\u2019s spending and transfer money to them from parental accounts. The apps geared toward older teens may also introduce investment options, like mutual funds, ETFs and stocks.<\/p>\n

While specific features and functionality differ, the family digital wallet experience can be viewed in through three \u201cexperiences\u201d:<\/p>\n