No matter what you do for a living, I think we can all agree that managing personal finances can be challenging even under the best of circumstances. Between balancing everything you have on your plate at work with the demands on your time at home, less immediate (or out of sight) concerns like your budget and other financial responsibilities are often pushed to the back burner.
This is why finance apps are so popular! With the kind of finance apps available in the market today, managing your budget is a breeze. Say goodbye to tediously long spreadsheets and complex function equations, and say hello to compact apps jam-packed with useful functionality for better budgeting and financial management.
And if you're considering building a finance app yourself, your timing couldn't be better. The demand for finance apps has grown by leaps and bounds since the pandemic, with users turning to pocketbook friendly finance apps to help make sense of their financial situation and better navigate intense economic uncertainty.
How much of an impact did the pandemic have on this market, exactly? According to a report compiled by Liftoff, finance app installs increased by a whopping 15% in 2020, compared to 2019. Overall, users downloaded 4.6 billion finance apps globally and spent 16.3 billion hours in-app, up 45% from the previous year.
The pandemic may be waning as vaccination rates increase, but we don't see this personal finance trend following suit anytime soon. Before we get into why you should finally jump on that finance app idea you've been sitting on for years though, let's get to know the market a bit better...
Finance Applications: Meaning, Uses, and Types
To put it simply, installing a finance application on your phone is like having a personal Finance Manager right in your back pocket. It's an application that simplifies and streamlines the process of managing your money by helping you track your finances on the go. With a few clicks, you can easily link the app to your personal accounts and even create joint accounts with your friends and family.
Finance apps are valuable because they track and record all of your expenditures, savings, and investments and sends payment reminders to keep you on track. They also use the data they collect to make recommendations for investment options to maximize returns. Many apps in app stores today can also provide you with tax-saving instruments, keep you up-to-date with your credit score, and help you save up for future emergencies. For many people, a finance app is an all-in-one solution for achieving their financial goals.
Finance apps are generally broken into two different categories:
- Manual Apps - For some users, having a finance app is a better way to manage their finances themselves, and manual finance apps allow them to better digitize their systems. This type of finance app requires you to record your cash transactions physically (as you would otherwise do in an Excel sheet) and categorize all transactions like purchases, savings, or investments. Good Budget is a perfect example of a successful manual finance app. It allows users to create separate envelopes for every category of expenses, and consequently, users can systematically keep track of their money.
- Linked Apps - This finance app type is best for those looking for a more hands-off approach. After linking the app to your bank account, linked finance apps automatically extract information for all your transactions and records and categorizes them internally. Personal Capital, YNAB, Mint, and Wally are fantastic examples of highly adopted linked personal finance apps. And if you're looking for an example to help business owners, look no further than the ever popular finance tracking solution for both small and large businesses alike, Quickbooks.
Popular Finance Apps in the Market
Now that we know what a finance app is and the two different types out there, let's take a look at some of the most popular finance apps in the market and their unique selling propositions (USPs). If you are looking to build a finance app, this information can help you better understand customer expectations and current product offerings. It might even help you spot some gaps in the market...
- PocketGuard - PocketGuard is a free-of-cost finance application that offers some easy budgeting features, it sets daily spending limits for individuals by anticipating their recurring expenses, incomes, and pre-budgeted investments. This app is an absolute boon for over-spenders as it helps them set and achieve their financial goals by restricting their daily spending.
- Mint & LearnVest - Mint and LearnVest form another set of free finance management applications that securely sync one's bank account and credit card details, thereby allowing users to track finances, set goals, and categorize transactions. Mint provides unique services like credit monitoring, useful blog articles, educational tools, and alerts for overspending or large-sum transactions. LearnVest, on the other hand, is well-known for the plethora of reading materials that the app offers on a variety of personal finance topics like "how to start investing", "how to get out of credit card debt", and much more. LearnVest also includes a paid-subscription model to provide premium budgeting advice for those that see the value in investing in their financial success.
- YNAB & EveryDollar - YNAB (You Need A Budget) and EveryDollar are two separate money management applications based on the concept of a zero-based budgeting system. In other words, the app equates every income earned with an equivalent expense/investment plan. Both of these applications use premium-pricing models, and the premium versions allow linking of bank accounts, categorizing transactions, and offer budgeting advice.
- GoodBudget - GoodBudget is a manual finance management application that allows sharing budgets with friends and family. It uses an envelope-based budgeting system that creates multiple spending categories and adds an upper spending limit in each category. The app also uses a premium-pricing model which has no limit on the number of envelopes and sharing options as compared to that of the free version.
- Honeydue & Honeyfi - Honeydue and Honeyfi are automatic finance apps that allow joint-budgeting and helps couples manage their bank accounts, incomes, savings, expenditures, and investments. They provide a secure platform for couples to coordinate their finances and stay on top of their financial goals.
- Personal Capital - Personal Capital is a unique combination of a finance app and a digital asset management service. The free version is a finance app that allows users to record and track their spending, and the paid version connects high-net-worth clients with financial planners. The premium service also includes tax planning, wealth management, and retirement planning.
What attributes do people bank on (or expect) in a finance app?
So, which features rank highest with users and will influence whether or not they choose to install your app? Here's a quick breakdown:
- Financial Goal Setting and Progress-Check - Most users seek out finance apps to hold themselves accountable for their spending habits and achieve a specific monetary goal in the future, and every user will expect to see these features listed as primary attributes in any finance app they choose to use.
- Integration with Financial Institutions - In today's digital world, manually keeping track of cash transactions seems like an unnecessary and archaic practice. Direct integration of finance apps with bank accounts and credit cards enables hassle-free tracking of transactions without requiring physical bank receipts and statements. On that note, we expect manual finance apps to become outdated over time.
- Flexible Categories for Personalization - Every individual has different means of income and expenditure, so it's important for finance apps to provide flexible categories for expenses, income, and investments. This leads to a more personalized experience for users and makes your app more universally desirable.
- Regular Payments, Expenditure Tracking, and Live Alerts - People are busy, and upcoming payment reminders are more likely to ensure timely payments towards recurring expenditures or investment schemes. This helps users avoid any over-budget transactions and eliminate the need to manually record transactions.
- Diagrammatic Data Representation/Analytics - Finance apps like YNAB and Mint display users' data in the form of reports and infographics. This feature makes financial tracking and analysis easier to interpret and manage. It also keeps users up-t0-date on their balances across multiple accounts and paints a more comprehensive picture of their overall financial status.
- Easy Backups - Our world is an imperfect place, and there are few things worse than losing all of the progress you've made or all of the information that you've stored because the app you were using didn't offer a backup option. With this feature, the application backs up the record of your past transactions on Cloud, Dropbox, or Google Drive for future reference.
- Security - When you're working with something as sensitive as finances, it's important that your app follow some transparency and security protocols. Implementing security features like multi-factor authentication, VeriSign scanning, and biometric authentication can provide users with peace of mind when it comes to ensuring that their data is protected. Finance apps should also be sure to adhere to any data security regulations and standards that exist within the geographical boundaries that they cater to—for example, the EU's GDPR (General Data Protection Regulation) or California's CCPA (Californian Consumer Privacy Act).
- Personalization - Personal money management apps are simpler and more user-friendly compared to business accounting software, but they still need to have some level of flexibility. With this in mind, developers and app builders should find unique ways to cater to the requirements of every user, thereby delivering a more personalized experience for them. Take Wealthfront for example—during their onboarding flow, they ask a series of questions that help them customize investment opportunities for each user based on their unique preferences. By offering a limited number of choices and drawing on more straightforward copy, they also ensure that users are less likely to drop out of the funnel during this process as well.
- Analytics - The display of transactions and progress towards financial goals through infographics and charts is among the key features that differentiate a finance app from a banking app or a digital wallet. The majority of users looking to adopt finance apps will look for this feature in personal finance apps because analytics provide a more digestible breakdown of raw data. This empowers users to make changes to the way that they manage their finances, and applications like Mint and YNAB are known for their engaging analytics.
The Secret to Building a Unique Finance Application
At this point, we've covered some must have features you'll need to include in your finance app, but what kind of features are going to make your app stand out and offer you a competitive edge? Going back to the basics, product differentiation is the best strategy to gain a competitive advantage in any market. Here are some growing trends that are less frequent and therefore more desirable.
- Financial Lessons and Insights - Financial literacy is highly sought after, but the real pearls of wisdom are often hiding behind a paywall. Providing personal finance lessons in addition to offering primary money-tracking benefits could help you attract a potentially large user base.
- Money Management Cues - YNAB is the best example of an application that provides users with daily tips on managing finances. It also sends out reminders to users of their financial goals and prevents any deviation or overspending.
- Using AI to Track User Habits - AI algorithms track large volumes of data related to the spending habits of users. The results obtained are then analyzed to tailor personalized suggestions and tips to users. It's important to bear in mind that user needs and requirements are likely to change over time, and injecting AI and ML technology into your processes can help you keep up.
- Real-time Product/Service Comparisons - The secret behind the success of applications like Amazon, PriceGrabber, and Pronto lies in this strategy. They allow real-time comparisons among competitive products/services and enable users to make the best choice. A similar interface for finance apps can potentially attract a large number of interested users.
- Analytics to Forecast Future Expenses - Analytics can not only convert user data into appealing infographics, it can also be used to provide an estimation of upcoming expenses to help users plan, modify their habits, and meet their financial goals. Forecasting is vital for planning and necessary to estimate and plan for costs that will be incurred prior to actually incurring them.
- Catering to a Niche - Narrowing down your target audience by offering niche services can lead to high adoption rates for you in the finance app sector. Providing specialized services will lead to expertise and lower competition from other general finance applications. Some notable examples are Tally and ChangEd. Tally caters specifically to credit cardholders enabling them to repay their credit card dues. ChangEd, on the other hand, focuses on helping students pay back student loans by rounding up daily purchases and putting that rounded up amount aside until it reaches a specified student loan payment amount. Other such niche services could be credit score management, tax planning, loan planning, portfolio management, etc.
- Voice Command Option - Providing AI-assisted voice command controls within a finance app will eliminate the need to type any data. This feature would be especially beneficial in a manual finance app and for those with accessibility needs.
- Gamification Features - Gamifying finance apps can improve user engagement, motivation, and the frequency that they use your app. After all, if you can make something like personal finance fun, users are definitely more likely to stick with your app!
With everything that personal finance apps have to offer today, the market has exploded in popularity. Who knew that budgeting and fiscal responsibility could be so trendy! Developments in the form of better UIs, rapid app experiences, and tighter security systems will only boost the demand for these apps in the years to come.
Interested in learning how to get your finance application up and running? The expert team of professionals we have here at Crowdbotics would love to help you secure your corner in the finance market! We specialize in delivering innovative IT solutions for businesses worldwide, and our skilled App Developers and Product Managers would be the perfect fit to develop your Finance Application. Get in touch with our experts today for a detailed estimate!