Best of Financial Guidance and Money Management – Report by MEDICI

Personal Finance Management (PFM) has had a roller coaster ride ever since it went mainstream in the late 1990s. Although considered the opening step to financial guidance and advisory, PFM has often fallen short of consumer expectations and has had a turbulent evolution. With the earliest platforms like Quicken to Mint (probably the most celebrated money management app even today) to the modern crop of solutions that emerged in the last decade or so, PFM has struggled to capture consumers' attention. In this article, we share some snippets from the recently launched report ‘Best of Financial Guidance and Money Management.’

In this research report, MEDICI takes a deep-dive into PFM and money management platforms and apps. We analyze the reasons they have under-delivered and the key success factors as well as best practices to be a great platform that consumers and enterprises love alike. The Best of Financial Guidance and Money Management Report also presents 8 of the best-in-class PFM platforms globally, detailing what makes them immensely popular with consumers and enterprises and what core principles make them stand apart from the rest.

Understanding Personal Finance Better

Managing personal finance does not come naturally to most consumers. It has a low index of instant gratification and requires conscious involvement and discipline. For these very reasons, PFM happens to be one of the hardest things to retain consumer stickiness. With waning consumer usage, the perceived value falls. To a large extent, this also explains the difficulty in monetizing PFM services. A deep understanding of user behavior, focus on automation & customer experience, and actionability plays a key role in deciding its success. Barring a handful of niche platforms (which are profiled in this report), it wouldn’t be an overstatement to say that most banks (challenger and neobanks included) have done a disservice to PFM.

Personal finance needs to go beyond analyzing the monthly spending of a consumer. During our research, we understood that as much important budgeting is to consumers, very few of them stick to the vigor and discipline they start with. Most consumers struggle even to identify their optimal budget numbers. Out of the many inferences we drew from the study, one of the ‘must-have’  features we learned was that the three key elements of personal finance—income & expenditure analysis, budgeting, and goal-based saving—have to be well and smartly interlinked. Further, users need to be prompted into actions that lead to tangible outcomes at the end of a time period resulting in a certain level of gratification. With PFM being an ancillary feature tucked away in one of the remote tabs inside the internet and mobile banking apps, none of these critical success factors are met. The lack of seamless integration of PFM with the rest of the digital banking user journeys aggravates this dissonance.

Grab your copy of the full report to get detailed analysis and insights here.

What Makes PFM Successful?

While there are numerous PFM solutions and apps to pick from, only a few manage to retain consumer interest by designing consumer experience and value from first principles. Historically, several PFM implementations have been guilty of identifying it as a bunch of standalone features. This section will identify the most important learnings from our deep-dive analysis and distill them into best practices under four key dimensions, all of which carry equal weightage in determining frequent user engagement. 

The main report covers a detailed analysis of these four themes and provides insights on 13 crucial best practices. Access the main report here.

About the Report

During the course of our research for this report, we analyzed over 100 PFM platforms and apps globally. We did multiple rounds of down-selection to identify the best apps currently across North America, Europe, and Asia. Some of the apps covered in this report are also enterprise platforms making them an elegant choice for banks and other FIs to adopt and integrate into their banking apps. Instead of a functionality-based assessment, we evaluated apps based on how smooth and barrierless the consumer experience is, how gamified and habitual the interaction is made to be, and, more importantly, how well consumers are guided and advised through their financial lives. All our learnings from this study have been distilled into best practices across technology & data, consumer experience, user behavioral aspects, and financial guidance.

Grab your copy of the full report here.