Putting personal finance power in your pocket

Two years ago Apple launched Apple Pay and dominated tech headlines like only an Apple product launch can. Within 72 hours, Apple CEO Tim Cook declared Apple Pay the largest wireless payment platform.

Since that much-hyped rollout, even Apple has had to overcome a few hurdles in convincing banks to adopt its payment method, evident in the fact that only a few major banks across the US, UK, Canada and Australia/NZ currently support the method. Apple is currently trying to penetrate the Chinese and Indian markets, although they have had their fair share of pushback and competition in these two markets.

It’s clear that wireless payments, when executed correctly and securely, provide an elegant, easy-to-use alternative to carrying around plastic cards, as evident in Apple Pay’s 1 million registrations in 3 days in the US and 3 million registrations in China within 2 days. Although other startups such as Coin are sticking to a physical card, I think that the mobile solution (integrated into the mobile device) is a much more sustainable solution.

In South Africa, Apple Pay and Samsung Pay are not yet available. One of the 4 major local banks, Standard Bank, has launched SnapScan that allows their customers to pay with their mobile phones at selected stores. It only works for their own customers, though. A few entrepreneurs have launched their own services such as Zapper (available in South Africa) that work exquisitely well but lack the integration with my own personal financial portfolio to make much difference in my spending and saving habits.

Mobile payments is the first part of empowering people financially, the second part of personal finance empowerment is personal finance planning/tracking tools that can track expenses, integrate with geo- and e-wallet payments, integrate other accounts such as car finance and bonds and personal loans, include budget functionality and savings planning functionality and even provide individuals with net worth values, liability values and set targets for retirement planning and investments (share purchases etc).

Many such apps exist globally and most major banks have their own banking apps that integrate various basic and advanced functionalities. The idea would be to integrate all the personal banking functions a client has into a single dashboard with customised metrics (user-chosen) and then enable deeper analysis based on the portfolio of the client.

Examples of tools such as these locally are few with the only one worth mentioning 22seven. I have used the app for the last 6 months and, although visually appealing with good functionality, still leaves me wanting more. International examples are more plentiful: iBank, Moneydance and probably the most well known, as well as Mint). The core pillars of a software tool such as this is to be visually appealing, easy to use, secure, deep integration without adding complexity to the user level, partnering with retailers (loyalty partnerships paves the way), relevant/accurate planning tools based on the client’s current situation and integration with existing services and accounts.

The next step would be to integrate both the payments side and the planning and tracking functionality. Below are some ideas for functionality I would like to see based on the core functionality currently found in the FNB banking app, Zapper payment app, and 22seven planning and tracking app:

  • A Spending Plan page – a summarised visual representation of how much money I spent on various categories of expenses and a clear visual cue of how much money I’ve spent based on the budget I set up within the app. Red and green are universal in their meaning and incorporating these into three data points (spent so far, planned and forecast spending) will help to at a quick glance get an idea of where I am towards my budget. The idea with a screen such as this would be to see “How much have I spent and what should I be aware of as potential cost-cutting measures to save more money”.
  • Setting a budget for various spending types. Here I can set a master budget and set a budget amount for various pre-set spending categories and add categories on the fly as I need them. This “master budget” is then populated in every previous and coming month with the option of changing it per month (the master budget populates by default to every month instance, but every month instance has an independent budget based on the master budget that applies changes to that month and supersedes the master budget).
  • A separate graphical depiction of the spending types (recurring, once-off, day-to-day etc) that’s tappable and then opens up into a stacked category representation of spending by type.
  • Account screen. The potential of a screen such as this is enormous and where I see the most value being unlocked! A quick net value summation would be the first thing you see, but the potential here is far larger. As a consumer I would like to see (based on accounts synchronised):
    • My current asset value
    • My current liability value
    • Net income
    • A metric that advises on what I should save based on my current earnings, age etc etc
    • Net outflows (only recurring costs are reflected here i.e. fixed cost)
    • “Profit”, disposable income
    • Disposable spending (exceptions, day-to-day spending categories)
    • At the end of the month whatever money is left after saving, fixed and variable expenses the app advises to save or pay off debt (based on current debts synchronised) and then offers the investment product already built in
    • To make the information even more accurate, users could manually add their pension deductions, personal income tax deductions etc to get a much more holistic view of where their money is going.
  • Talking about income tax, that’s another area that a personal finance app could give users more power over their finances. How much tax am I paying based on my earnings? If I got a second job or moonlighted, how would the extra income affect my tax situation? Also, and this is just for interest sake, maybe the app could look at your spending habits and work out how much tax you pay in total (VAT, fuel levy, rates and taxes etc). Would be an interesting stat to see.
  • Together with the above certain industry-vetted content can be built in like what pension are doing in terms of growth, what ETF’s are doing well, what impact interest rate have on vehicle and mortgage finance with amortisation tables, projected values of various savings/investments instruments currently owned (with the applicable protections and t’s & c’s) and lastly how short-term debt like credit cards or clothing accounts should be paid off within your current earnings and expenses trends.
  • A nudges tool.  A notifications system to highlight specific spending trends that are harmful to building wealth, how debts are being managed, how you are progressing towards savings goals or what habits you should adopt based on your spending trends.
  • Savings and investments is another area where an app can give guidance because it has access to spending trends, can ask the user for goals and measure and motivate (through partnerships with e-tailers even be incentivised!) them to save and invest. The exact same can be done for debts where users are incentivised and/or motivated to pay off debts and the app can show them projected saving in interest on credit cards and home loans. By setting savings or debt repayment goals, the app knows when you hit those goals and by gameifying the process, certain achievements can be set where users could win prizes from partners.
  • Online calculators are always popular and a nicely branded set of tools on the app website with backing from banks and investment providers as well as things like tax calculators and amortisation tables, all in one place, would make the apps’ website a one-stop-shop.
  • Supporting apps could also be considered such as:
    • Art investment club app. Friends and family save money every month with the aim of purchasing a piece of art monthly, quarterly or annually. The app can help manage the fund, keep track of purchases and allow members to enter valuations for the art to see how their investment is growing.
    • Payment app, for peer-to-peer payments and also include a “save your change” function where a transaction is rounded up and the cents are deposited into an investment account (look at something like Acorns).
The ideal situation would be that a major bank does this, but they’re notoriously slow on innovation and shun anything that might be seen as a risk to the security of data, which in this day and age is not a bad thing, but it shouldn’t stand in the way of progress. I haven’t even mentioned blockchain technology which could further reinvigorate the financial industry and many financial institutions are looking into this technology.
Fintech is currently focused on B2B mainly, but I think as many opportunities exist in the B2C sphere and it only needs a few people with th financial, development and marketing skills to convince a bank to give it a shot. Had I the mad coding skills I would build it myself. So if there are any devs out there that would like to partner up, let me know!
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