The rapid development of personal finance mobile (PFM) apps has been playing well for both businesses and consumers. Money management apps allow them to benefit from streamlined payment processes and get a better understanding of the market’s needs and customers’ spending habits.
Individuals — who statistically prefer using personal finance apps rather than websites — enjoy easy-to-use platforms for personal budgeting, money transferring and investment, pay-off reminders, and the possibility to make online purchases and orders.
At the same time, mobile payments and banking providers are now able to ensure better-personalized service and provide financial advice by analyzing customer payment behavior and spending patterns and gathering personal details.
Think of it, global downloads of financial apps spiked from 3.4 billion in 2018 to 5.9 billion in 2021, which marks heightened demand for embedded finance platforms. Add to it a change in lifestyle behavior caused by the COVID-19 pandemic, and it won’t come as a surprise that fintech projects like Revolut or Uulala have been heavily gaining popularity and attracting investment.
Notably, traditional banks have been actively integrating the money management option into their mobile applications to keep up the pace. With the rise of personal finance mobile apps and the number of successful stakeholders in the field, providing customers with the best user experience (UX) comes to the fore.
The interest in fintech products traces its roots to the first half of the 2010s when banks began developing their own apps and mobile services. Fintech projects, in turn, rushed into the industry with fresh and innovative ideas.
It makes it natural that the development of mobile and web applications targeting B2C audiences should be part of the plans of any bank or financial company to achieve a positive customer experience and develop new revenue channels.
What you need to know before downloading a budgeting app
But what is a money management app and why is it so important to have one installed?
From a personal point of view, spending less and saving more is what people are usually aimed at. Although there are myriads of personal finance apps in the market, their functionality comes down to a few key options. As a rule, those are tracking down the user’s spending habits, setting up a personal budget and finance goals, and getting notifications about hitting their spending limits.
It’s vital to stand out in the market, so high-quality app providers often enhance the app’s basic capabilities, add gamification elements, and care deeply about user experience.
When choosing a personal finance app, make sure it’s available on your device, be it equipped with the iOS or Android operating system, and that it’s being consistently upgraded.
Remember to keep in mind the security issue since you are going to share your personal and financial information. High-quality budgeting apps will offer you multi-factor authentication or other security and safety measures.
Free applications are usually supported by sponsorship or in-app advertising for the sake of monetization, which may have a negative effect on users’ satisfaction. That’s why app providers tend to find a balance between placing ads and keeping it engaging for the end user. For example, they may blend ads with the rest of the background or propose a bonus for watching an ad.
Check out whether it’s possible to tie your money management app account to your bank account or credit card. If so, it will allow for automatic tracking of your income and spending. This is very convenient, unlike when you have to put your financial information manually.
A good personal finance management app would allow you to add your own tracking categories or subcategories to the basic ones. Thus, you can not only see how much you spend on transportation and groceries but also on online video game stores or car performance upgrades, for instance. At the end of the day, we all have hobbies and guilty pleasures!
Millennials are the key age category to use money management apps
In 2022, it really takes an effort to find a person who doesn’t use mobile banking solutions in developed and developing countries, especially when it comes to tech-savvy younger generations. That being said, the number of app users grows along with the advancement of the banking and smartphone sector.
97% of millennials — anyone born between 1981 and 1996, or ages 26 to 41 in 2022 — are using mobile money management or banking applications. However, Gen Xers and baby boomers also have a growing appetite for mobile banking, with 91% and 79% of them taking advantage of such apps, respectively.
Millennials increasingly use mobile banking and budgeting apps mainly because they allow for a quick, easy, and efficient way to manage their finances. Plus it’s time-saving, easily accessible, and eliminates the necessity to visit a bank branch.
Another reason is that mobile banking apps enable you to switch bank accounts if you decide to start using other features, cashback rewards, or interest rates. Keep in mind that the ability to split the bill among friends is an extremely lucrative feature a banking app can offer.
Among other things, millennials value in online banking apps is that you can transfer money to your family and friends in a smooth way and develop a money-saving strategy using tips and personalized financial advice. When you live life on the go, it’s all about convenience!
North America and the Asia Pacific are promising regions for PFM apps
Thanks to technological advancements and the high speed of adoption of digital financial products, tech companies flock to North America to enjoy one of the best startup environments in the world.
This makes North America the leader in the budgeting app market, however recent research has found a shift in market paradigms in terms of regional competitive advantage. While at this point, North America is followed by Europe, there is data suggesting that the Asia Pacific will outperform the two regions in the coming years.
This is because of increased demand for financial technology in the commercial sector, the best financial institutions, and needed professionals in the world. It makes the Asia Pacific region a place with ample opportunities for market growth, especially if you add the skyrocketing internet and mobile penetration to it. For example, in China, mobile payments were worth a staggering $17 trillion in Q3 2020 alone.
The major stumbling points here would be poorly developed IT infrastructure and the educational sector, social constraints, and a lack of financial professionals. Nevertheless, investors are very bullish in regard to the long-term fundamentals of the region’s infrastructure sector.
Overall, the personal finance management app market is projected to size up to $1.5 billion by 2027, with a CAGR of 5.7%. If you take the United States individually, the budgeting software market size there is expected to be worth $343 million by 2026, with a CAGR of 5%.
Number of internet users grows, so does the demand for wealthtech apps
Demand for round-the-clock access to content and products from anywhere in the world is natural for today’s users, and it only grows further. The information and communications technology sector has 7 billion mobile subscribers and 3 billion internet users, which constantly attracts new industry players.
The economic uncertainty dominating the world in the last few years has shaped new trends in society, with people realizing the importance of strategically managing their personal finances and financial planning and protection.
Once users become comfortable with simple-to-use online banking apps which notably improve their quality of life, the ever-growing appetite for more diverse service and engaging user experience makes its presence felt.
It’s important to keep in mind that digital natives, or millennials and Gen-Z, are the most active user category these days. When developing a money management app concept, you need to catch their attention first — so be creative.
Digital natives, who consider financial literacy an important part of their life, will likely appreciate in-app finance management assistance available 24/7.
Another rising trend in the PFM app market is fractional share investment, where a user can buy partial shares of stocks with any amount of money. It significantly democratizes the market and lets people build a brokerage account gradually.
What it means for you as an app provider is that to create a competitive solution and keep it trending, you need to follow the latest market tendencies and adopt new approaches, including those impacting your product’s UI and UX.
Take advantage of building a personal finance app now
Latest advancements in the fintech industry have eliminated the age barriers so that budgeting app developers can address different age categories, be it teenagers who make their first steps in the finance world or experienced investors and traders.
In fact, the next growing user category is kids and teenagers who are being involved in household financial decision-making. Their curiosity and openness to the digital space make companies and app designers revisit their approach to money management app development by turning to innovative strategies.
The financial sector is actively adopting emerging technologies like artificial intelligence (AI) or blockchain, which gives app providers a great opportunity to bring something new to the market that people of various backgrounds will find relevant to their needs.
Whether it’s an app that compliments your core activity or a side project, you need to decide on the monetization model. Considering that not all social groups are capable of paying but worthy to get them engaged, you can choose among several free models.
Those may be free but not for everyone, the user can pay if they want to support you, or free in exchange for something like gathering specific personal data for better analytics or tackling micro-tasks. Don’t forget that third parties like advertisers, brokers, or data-reselling entities may also be involved.
Need to create a money management app but don’t know where to start?
It’s not enough to have a good idea. You have to deliver it to the target audience and keep it trending.
Shakuro is well-known for its unique approach to app development, concept design, and branding. Our team turns the boldest ideas into fully-functional products that help you expand your customer base and build new revenue channels. What’s more, we provide lifetime support and consistent updates for existing applications.
your money management mobile app idea now and bring it to life!
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This article was originally published in November 2020 and was updated by Sergio Santino in June 2022 to make it more relevant and comprehensive.