How your phone holds the key to your finances

The future of finance is definitely mobile

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Banking App Stock

Mobile technology is a key pillar of modern life and a wave of new apps could help us save more, lower the cost of insurance and even allow us to pit our pensions against those of our peers.

While everyone is now used to banking on the go, Dean Lamble, managing director of AXA SunLife, believes that financial services still has some way to go to develop the on-the-go technology that will engage a new generation of savers.

He said financial businesses should look at 'how customers engage, or want to engage' and 'look at the concept of managing [financial] affairs via technology'.

Lamble believes most areas of financial planning can be helped with technology and the UK should be looking at the strides other countries have been making in targeting younger generation with a slick new wave of apps that prompt saving and make dealing with money easier.

General insurance

Once insurance is purchased, whether that is for the home or car, most people forget about the documents, filing them away in the debts of a drawer or already bulging folder. This system is fine until you actually need to make a claim.

Lamble said insurers should be offering 'online briefcases' of insurance policy documents that would allow people to access the information they need straightaway in case they need to claim.

'If I have a car accident or home break in, I have to go to the filing cabinet, find the policy, find the policy number and find out who I have to call,' he said.

'We need an app that is an insurance briefcase that would bring up the policy and tells you who to call.'
He added that the app would allow you to upload pictures of damage done so the insurance company would have the details straightaway, all in one place.

Saving

To encourage younger people to save, Lamble said the UK should do more to adopt 'impulse saving', which is widespread in Australia and New Zealand.

One bank offers individuals a 'red dot' app that allows them to impulsively save a sum of money into their bank account at the click of a button.

Lamble said the app could take further and track your location so it knows when you are visiting a coffee shop and immediately sends an alert asking if you would rather save the amount of money you are about to spend.

'It's an app that links to your savings account that lets your hit a button to save £5, or £10, or £20 ,' said Lamble. 'You could have a location service so when you go into Starbucks and if will ask if you want to buy a coffee or save £3.

'It would be very engaging, that is the sort of technology young people engage with. If you save £10 per week, that's £500 per year and with growth of 5% over a year, over 20 years that is £10,000 in today's money. We have to realise that old fashioned ways of getting young people to save aren't working.'

Life insurance

When pricing life insurance, the healthier you are the better the deal you will receive. Lamble said technology can be harnessed to help insurers determine a persons health when calculating life insurance premiums.

He said that people are already monitoring the number of steps they take per day and other fitness programmes and that information should be made available to insurers.

In the future he said apps could be used to monitor blood pressure and even further in the future apps that collect biometric data could be used 'to tell [insurers] exactly what is happening with a person's body'.

Pensions and investments

Saving for a pension may be a dull concept but Lamble thinks that pitting individuals against their friends in a pension premier league could spur people into taking an interest in their savings.

Through a Facebook style app, savers could link accounts with their friends and trade messages on how well their investments are, or aren't, doing.

'[In the future] I could link my account to friends and see that I have made 9.6% this year and have an instant message sent to them...it's a Facebook approach to investing...they could be a league table where you are bouncing information between each other,' said Lamble.

Taking the idea on further, if a person had all their personal financial information in one place it would provide the saver with an idea of their total net worth and give them a basis to work out how much more they have to save for their retirement.

'It could show you your total net worth – it could include your house value and you could update the valuation if, for example, you put an extension on,' said Lamble.
'The app could take into account your mortgage and how much debt you have, how much is in your ISA and pension...so it could tell you your total net worth. You would know how much you need to save for retirement and how much protection you would need.'
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