Personal money management is an important part of adulthood, but few adults take it as seriously as they should.
According to research published by Mint, around 30 percent of Americans don’t save any of the money they earn from working jobs.
Another study by Gallop found that only about 30 percent of U.S. households have a long-term financial plan.
From these numbers and other related studies, it’s clear that adults need help. That’s why more banks, fintech companies, and startups are racing to develop money management apps—to help bring financial wellness, financial clarity, and financial stability to those in need.
If you want to join in on that race, spend the next few minutes gaining a better understanding of what a money management app is, what the main requirements are that should be taken into consideration when building a money management app, and which app features users care most about.
According to Google, “73% of smartphone users have used an app to manage their finances in the past month.”
A money management app is a tool that helps users understand the flow of their money. A typical money management app will connect to existing financial accounts and provide users with a picture of what’s happening to their money in real-time.
It will show things like how much money is coming in, how much money is going out, where money is being invested, how much money is being saved, and a breakdown of costs by category.
Money management apps can also help users create monthly budgets and offer suggestions on how to save money.
Some money management apps like Mint also partner with other third-party financial companies so they can recommend different credit cards, investment accounts, and insurance options based on what they know about a user’s finances and goals.
There is a strong market for money management apps. According to one report, the finance app industry has experienced huge growth in adoption in recent years, going from 16% in 2015 to 64% in 2019.
Another report found that app installs for finance apps increased by 20% between Q4 2020 and Q1 2021.
Investors seem particularly interested in seeing financial apps grow. In August 2021, SoftBank, Sequoia Capital Global Equities, General Atlantic, and others invested an additional $750M into Chime and valued the company at a whopping $25B.
That same year, General Atlantic, along with other firms, also invested $100M into Albert, another fintech startup.
But it’s not just startups making headway in the race to capture the loyalty of users—traditional banks are also innovating and bringing new apps to market in an effort to compete. One study found that traditional banks experienced a 22% rise in installs in Q1 2021.
There are many different types of money management apps you could build for your users. Here are four of the most popular money management apps being built by financial institutions and startups today:
The most popular type of money management app is one that helps users budget their finances in real-time. A budgeting app will typically have some or all of the following features:
The best examples of budgeting and planning apps are Mint, Sckeem, Goodbudget, YNAB, PocketGuard, and Honeydue.
Another type of money management app worth building today is one that helps users save and invest their money. These apps typically act as a partner and gateway to other third-party financial institutions that offer investment-based products and services.
An investing app will typically have some or all of the following features:
Some great examples of personal investing apps are Plum, Acorns, Robinhood, Stockpile, and Emma.
The third type of money management app that continues to grow in popularity is one that helps users buy, sell, and manage cryptocurrency. These apps help users learn about and invest in hundreds of cryptocurrencies that exist today.
A crypto investing app will typically have some of all of the following features:
Some great examples of crypto investing apps are Coinbase, FTX, Gemini, Hamilton’s Reserve, and Robinhood.
A final type of money management app worth noting is one that offers AI-based chat functionality to users who want help and motivation when it comes to managing their money.
One great example of a money management app that utilizes AI-based chat is Cleo. Clearly built for millennials and Gen X’ers, this app makes budgeting money and saving more fun for users by incorporating memes, humor, gamification, and bright, bold colors into the app.
In addition to the features listed in the examples above, there are more money management app requirements that you should consider before you start building your app.
Your money management app will need to meet the following requirements:
Security is a major concern that users have when deciding whether to sign up for and continue using a financial service. They need to feel confident that you’re doing everything you can to keep their personal and financial information out of the hands of cybercriminals and hackers. One way to add an extra layer of security and protection to your app is by requiring all users to enable two-factor authentication.
If your app is too complicated, users won’t feel motivated to engage with it on a regular basis. To prevent inactivity and churn, you need to build your app to be intuitive and user-friendly. A user-friendly design isn’t just about making your app look nice—it’s about creating a delightful and engaging experience for your users. User-friendly apps make it easy for people to onboard, find the information they’re looking for, and complete the tasks they want to complete. Creating a user-friendly app also means making it accessible to everyone.
Any app that handles financial transactions or financial information from users needs to follow PCI compliance guidelines. PCI, otherwise referred to as PCI DSS, stands for the Payment Card Industry Data Security Standard. These standards ensure that you as the builder of the app are taking the necessary precautions and steps to keep user information safe inside your platform.
Users expect to see easy-to-digest information in money management apps. That makes data visualization a requirement for most app builders. Data visualization can help summarize information for users and make it easier for them to understand. For example, your app could visualize spending totals by category, investments by category, account balances, historical spending, and more.
Most money management app users expect that the apps they use will integrate and interact with their other financial accounts. If you’re building a personal budgeting app, for example, you will need to be able to securely pull financial data from a user’s existing bank accounts, credit card accounts, and investment accounts.
Smartphone users will also expect that your app can send them automated push notifications related to their accounts. For example, if you’re building a budgeting app, you might consider adding a feature that sends a push notification to users whenever they have overspent in a certain category or when they are reaching the limit they set. These push notifications encourage and enable users to open the app, review their accounts, and make real-time changes to their spending behavior based on data they are able to get from your app.
It’s estimated that by 2028, the global finance app market size will surpass $2B. If you’ve got an idea for a money management app, now is the time to bring that idea to life.
Ready to build your money management app? Find out why startups, banks, and fintech companies partner with Crowdbotics to build and bring their money management apps to market.
Crowdbotics
Originally published:
June 1, 2022
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