Open banking enables money management tools to directly compete with banks in the area of digital experience. Banks are thus urged to innovate their digital channels towards more holistic money management tools. So far however, banks struggle to provide money management solutions that connect seamlessly with consumers’ financial challenges. In fact, consumers expressed that one of their most used money management tools in banking apps fails to solve the right challenge.

Bittiq set out to talk to consumers and uncover why this discrepancy is present. Moreover, we wondered how the feature could be improved to help consumers manage their money in a more relevant way. The results emphasise the importance of customer interaction and show how customer loyalty can shift between digital banking tools if one is more effective in solving consumers’ financial challenges. 

What consumers told us

A survey among consumers showed us that many different tools are deployed for money management, but the ‘kijk vooruit’ function is one of the most used. In this feature, the banking app predicts and lists a user’s upcoming fixed expenses. This notion seems in line with our prior insights that a proper overview of fixed expenses is an important aspect in consumers’ financial life. Yet, a large share of users report that the feature only gives them part of the insight that they sought and they still required manual steps to get the full desired insight. Actually only 10% of users acknowledge that the feature gives them the full insight, so we concluded that the feature is an insufficient solution for the majority of users. Moreover, users of the feature are actively looking for alternative solutions, emphasising the discrepancy between the feature’s popularity and its current added value. 


The customer journey

The main challenge for many consumers is not getting financial control, but the time and effort it costs them to get it. Effective PFM solutions should thus in foundation disburden consumers by automating the full customer journey. Step one in understanding why exactly the ‘kijk vooruit’ feature did not provide a sufficient solution, is therefore mapping out the full customer journey.
Consumers most frequently report applying the list of predicted expenses to check whether any of their multiple bank accounts is at risk of going below zero. Since consumers tend to own a separate bank account for different purposes, each with automatically deducted expenses, they want to avoid missed payments. Similarly, consumers want to keep track of the money they can comfortably spend/put aside throughout the month. Reasons for tracking this insight are generally either tight financial resources or the avoidance of anomalies.
Although ‘kijk vooruit’ gives users an automatic list of upcoming expenses, consumers require a combination of account balances, transaction history and money put into savings to get the desired insights. As a result, the current journey consists of  manually scrolling through transactions and performing calculations in a financial spreadsheet. The same sequence has to be repeated for each separate bank account. 
The ‘kijk vooruit’ thus poses a part of the solution, but fails to appeal to the right challenges experienced by consumers. Since it leaves consumers manually going through their transactions and performing calculations, it is not pose the time-saving and comprehensive solution consumers are looking for. 

Building a better solution

In response to the findings, we set out to validate that translating these consumer insights into a more relevant PFM solution would indeed lead to a preferable solution. We developed a tool which gave users all of the insights we heard in the research: forecasting a negative balance, insight into the (un)paid fixed expenses and insight into the money left to freely allocate. To remove all manual steps from the customer journey, we provided these insights for individual bank accounts simultaneously or aggregated for multiple accounts. As a result the new feature - which we dubbed ‘free space’ (‘vrije ruimte’) - automated the full customer journeys as identified in the research.
After release of the ‘free space’ feature, it quickly became our most used PFM feature and significantly increased overall user engagement of our personal finance apps. Users validated that the feature had made manually going through transactions obsolete and it helped them attain the desired feeling of financial control. Moreover, users reported using the feature as their primary tool for tracking their financial situation throughout the month. Notably, we discovered that the feature also engaged users about their long term finance, since it acted as a link to saving behaviour. Although developing relevant long term PFM solutions can be challenging, it shows how creating PFM solutions that resonate with consumer behaviour can pave the road to developing long term PFM tools.

Key learnings

‘Kijk Vooruit’ exemplifies how a widely used feature can miss the mark by a lack of understanding the consumer challenges it aims to solve. The current capabilities of banking apps still provide them with a competitive advantage over other money management tools, but open banking enables a shift in customer loyalty to alternative tools that succeed better in providing a relevant solution. Customer interaction is shown to be a key factor in developing the solutions that resonate best with consumers’ financial challenges and fully unburdens consumers. Winning the loyalty race will not just depend on technical superiority, but rather of genuinely understanding the consumer and effectively translating this into solutions.
The implication for banks is that they should recognise that customer interaction can become an increasingly important asset in the loyalty race. In more general terms, the learnings show how relevant solutions can open up the gateway to a wide spectrum of PFM features, even in the field long term finance. By seamlessly connecting to consumer behaviour, the potential of open banking for PFM can be fully grasped.