Technology provides the ultimate insurance for risk-averse millennials

Millennials have entered the workforce caught between stagnant wages for entry-level positions, a slow-growing market for white-collar jobs, and ballooning costs for both education and housing. As a result, the newest generation in the job market takes a skeptical, risk-averse position on nearly all fronts of finance management. Millennials rely on technology to limit that risk in both consumerism and investment.

Mobile banking and money-management apps ride the crest of the finance technology wave. At first glance, the sudden rise of smartphone banking seems based on ease of use. In 2017, almost every major bank allows users to access accounts, pay bills, and deposit money via phone. Third party apps like Digit provide effortless saving by rounding up purchases and saving the remainder. There are even apps for day trading; the popular stock-trading app Robinhood provides commission-free investing and offers additional services at a flat monthly fee. The flat-rate costs and rejection of per-use fees cast the app in the mold of superstar media companies Hulu and Netflix.

Yet despite the increased ease of use, millennials remain less likely than their predecessors to invest in the stock market and have instead proven more likely to store their wealth in liquid assets. With those trends in mind, automatic savings and no-charge, quick response trading apps indicate a different priority among investors: flexibility. Suspicion of the market and the usual way of doing business has millennials adapting new methods to limit their exposure to market downturns.

That same risk aversion takes a new form with shopping in the era of Amazon. Millennials heavily prefer to shop via the internet; online shopping has become so natural that as of 2016 the number of Amazon Prime members outnumbered the non-prime Amazon users. Millennials utilize coupon programs like Honey or Piggy, which install an add-on to browsers to automatically search for coupons to any products in the checkout basket of an online sale. The benefits of price comparison and automatic coupons in online shopping combined with the sterility of the online sale–buying one brand feels much like another when sitting at a desk–to create a generation ambivalent to brand loyalty. It instead remains loyal to its budget.

The days of coupons cut at the kitchen table and drives to the mall for window shopping are dwindling. Even more endangered are the personal traders and money management professionals– algorithms and apps increasingly steal their role. For millennials, money management revolves around using technology to limit the exposure to a marketplace–for either investment or consumption– that they cannot fully trust.