Here's How Acorns is Growing Investment to Improve the Financial Literacy of its Customers
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A huge proportion of the American public feels left behind when it comes to financial literacy and inclusion. However, FinTech company Acorns is taking steps to improve the investment experience for its customers.
Acorns was born in 2014 out of a desire to provide a simple and elegant method for regular people to get involved in financial investment. Where most investment companies are only interested in huge transactions, Acorns lets people invest small amounts of spare change. Customers download the Acorns app and connect it to their bank card. Each time they make a purchase, Acorns rounds it up to the nearest dollar and invests the spare amount. Customers can set the aggression of the investment from safe to risky and track the performance of their money using the app's built-in analytics tools.
Today, Acorns has grown into a big success. The company has more than two million investment accounts and completed one billion trades in 2017 through its proprietary broker-dealer software.
The Acorns Customer Experience
Part of Acorns' raison d'etre is to drive a meaningful customer experience for its users. The company wants to demystify the world of investment and help to educate its users on how the industry works. Most people think of investment as the province of people on Wall Street with thousands of dollars to risk on the stock market, impenetrable to the average person.
Acorns takes a softer approach to investment, using its app to promote the idea that people with only a small amount of spare change can still make money from investment opportunities. More important, however, is the education which comes along with it. Acorns users can see graphs and charts and real-time updates how their spare change is growing and gain an understanding on why investments succeed or fail.
Jeff Cruttenden, Co-Founder and Chief Operations Officer of Acorns said, "I want to get mobile-tech savvy people to start investing while they are young, and time is on their side. The current profile of users skews to Millennials, and that the average monthly 'round-up' is about $40 to $50 per month. The automatic nature of the investment and the small amount involved, helps people think long-term and not obsess over short-term market fluctuations."
Acorns also publishes an online magazine named Grow which is designed to further improve the financial literacy of the customers. Grow publishes regular articles covering all avenues of finance, including news, and how-to guides on everything from budgeting and real-estate to debt and taxes. The website received over five million visits in 2017.
The Rise Fund
The Rise Fund was started by finance industry heavyweights TPG Capital to offer an investment boost to those companies committed to achieving measurable social and environmental outcomes, alongside competitive financial returns. And Acorns is the latest recipient of the fund.
"We're very excited to partner with Acorns. Financial services is one of the seven key sectors we are targeting for The Rise Fund," said John Flynn, Principal at TPG Capital. "Acorns is exactly the type of company we're looking to support. They have achieved extraordinary business success characterized by rapid growth while also helping to make it easy, efficient and transparent for Americans to generate savings and build their futures."
The Rise Fund investment will allow Acorns to further develop their mobile and Grow platforms and drive meaningful customer experiences through education in financial literacy.
Many CX professionals are thinking simply how their base interacts with the brand and what their experiences with the company are on a purchase-by-purchase basis. However, in attempting to change the outlook of the estimated 66% of Americans who can't pass a basic financial literacy test, Acorns wants to help its user-base acquire a more meaningful customer experience with, not just its brand, but with the entire financial industry.
The final word goes to Co-Founder and CEO of Acorns, Noah Kerner.
"I believe in the American Dream - in the idea that no matter where you start, anyone can grow wealth. This investment and support from TPG's Rise Fund, which has brought together some of the world's most influential thought leaders committed to driving social change, will help us further deliver the tools, knowledge and inspiration to champion that idea."
Consumer financial literacy is set to be a hot topic at CXFS 2018 , taking place this July at the Westin Copley Place, Boston, MA.
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