What FinTech Gets Wrong: Why We Can’t Automate our Journey to Financial Wellness
In today's digital-first world, financial wellness apps promise to automate our way to prosperity. While these tools certainly have their place, true financial resilience comes from something deeper: understanding the process, setting meaningful goals, and developing personal financial literacy. This is especially relevant for Millennials and Gen Z, who face unique financial challenges but also possess tremendous potential for building sustainable wealth.
Beyond Automation: The Missing Ingredient in Financial Wellness
Automated savings apps and algorithmic budgeting tools can certainly help jumpstart your financial journey. Research from the Financial Conduct Authority shows that individuals using automated savings features save on average 25% more than those who don't (FCA, 2023). However, these tools often function as black boxes, completing tasks without building your financial muscles.
According to Dr Sarah Newcomb, a behavioural economist, "When people outsource their financial decisions completely to technology, they miss the opportunity to develop the skills and mindset necessary for long-term financial resilience" (Newcomb, 2022).
The Power of Purposeful Planning
Setting meaningful financial goals transforms abstract numbers into concrete life achievements. When you identify what truly matters to you—whether it's homeownership, entrepreneurship, or financial independence—you create an emotional connection to your financial decisions.
The Money and Pensions Service (MaPS) found that individuals with clear financial goals are 42% more likely to report feeling financially secure than those without specific objectives (MaPS, 2024). This sense of purpose provides the motivation needed to persist through challenges, and this is exactly how our neurobiology works. In Coaching and Therapy, we lever off people’s natural strengths, available resources and values to build persistence and resilience. FinTech Apps and algorithms work against this incredible natural resource.
Learning the Process Creates Adaptability
Life rarely follows a straight path. Job changes, economic shifts, and unexpected expenses are inevitable. This is where understanding financial principles becomes invaluable.
A study published in the Journal of Financial Planning demonstrated that individuals with financial literacy scores in the top quartile were three times more likely to successfully adapt their financial plans during economic downturns than those in the bottom quartile (Journal of Financial Planning, 2023). The good news is that building good habits, maintaining self-awareness and cultivating curiosity – more natural resources bestowed on us and waiting to be used – will help in building the desire and confidence to explore the world of money and finance. The new era of Artificial Intelligence can really help to free up headspace and creating capacity to learn new skills. The old world of “Just-In-Case” learning can be replaced with curiosity, critical thinking and embrace “Just-In-Time” learning.
Building Sustainable Financial Habits
True financial wellness stems from developing habits that align with your values and goals. Consider these approaches:
Start with understanding your relationship with money. Reflect on your values and how they inform your financial decisions.
Set specific, meaningful goals that connect to your broader life vision.
Invest time in financial education. Resources like the Money Helper website offer free, impartial guidance tailored to different life stages.
Practice intentional decision-making rather than defaulting to automated systems.
Review and adjust your plans regularly as your life circumstances evolve.
Automation as a Tool, Not a Solution
Financial technology should complement your financial journey, not replace your involvement. The most effective approach combines thoughtful planning with strategic automation.
The Building Societies Association reports that individuals who combine personal financial planning with automated tools achieve 37% better financial outcomes than those relying solely on either approach (BSA, 2024).
Embracing the Financial Wellness Journey
Financial wellness isn't a destination but a continuous process of alignment between your money and your life goals. By investing time in understanding financial principles, setting meaningful goals, and developing your own financial process, you build the adaptability needed to navigate life's inevitable changes.
As you move forward on your financial journey, remember that the goal isn't perfection but progress. Each step toward greater financial understanding builds confidence and resilience, creating a foundation that will serve you throughout your life.