Fintech companies are catching on to how Americans are altering their financial habits, and they’ve created new products to try to meet the moment.
One app, called “Fake It,” lets users simulate spending money on luxury items without actually making the purchase. The idea is to give people the dopamine rush of shopping without the financial consequences.
Another app, called “Jubilee,” offers “happiness insurance.” Users pay a monthly fee, and if they experience a negative life event, such as a breakup or job loss, they receive a payout.
These apps are a sign of the times, experts say. Americans are increasingly anxious about their finances, and they’re looking for ways to cope.
“People are stressed about money,” says Dr. Elizabeth Dunn, a psychology professor at the University of British Columbia. “They’re worried about the future, and they’re looking for ways to feel better in the present.”
The rise of these apps also reflects the growing power of fintech companies. These companies are able to quickly identify consumer needs and develop products to meet them.
“Fintech companies are very good at understanding what people want,” says Ron Shevlin, a fintech analyst. “They’re able to use data to identify trends and develop products that appeal to consumers.”
However, some experts are concerned that these apps could be harmful. They argue that they could encourage people to engage in unhealthy financial behaviors.
“These apps could be a slippery slope,” says Dr. Brad Klontz, a financial psychologist. “They could lead people to spend more money than they can afford, or to avoid dealing with their financial problems.”
Despite the risks, these apps are likely to become more popular as Americans continue to grapple with financial anxiety.