Digital disruption is real, as Blockbuster, Borders and taxi companies will tell you. As digital permeates Financial Services, banks are continually pressured to function as technology companies and offer rich mobile packages – packages that have already evolved tremendously from the archaic offerings initially brought to market after the financial crisis.
Some have responded well to the demand, with vastly improved apps that narrow the gap to third-party apps that traditionally rank higher in app stores’ finance category. Banks like Chase have deployed increasingly sophisticated features and UIs that look more like a tech company’s than the traditional bank’s. And even while banks have made depositing checks and paying friends easier on mobile devices, customers still lack a truly functional mechanism for managing their finances in aggregate.
Recognizing the friction that still exists in their customers’ money management experiences, banks have experimented with chatbots and virtual assistants serving as de facto financial coaches. However, banks’ general resistance to APIs that enable access to external account data has limited the value of bank-owned money management solutions and forced millennial customers, in particular, to instead use third-party mobile apps for obtaining a 360-degree view of their finances.
Setting the Stage with Personal Financial Management (PFM)
Just two decades ago, a large majority of consumers held all financial assets with a single banking institution. Today, consumers tend to hold many different financial relationships. Even a loyal PNC checking customer may have a 401K plan with Merrill Lynch, due to his company’s contract with Merrill as their choice benefits provider. A BMO Harris customer may choose to conduct all day-to-day spending on a separate, more lucrative, Capital One rewards card to subsidize her monthly trips back home.
With such fragmented financial states, many consumers have struggled to make prompt financial decisions on the basis of aggregate wealth and financial health. The many that have turned to PFM apps are typically using them NOT because they can’t execute standard banking transactions with their bank’s mobile app but because they seek a solution that enables them to a) draw general insight across financial accounts b) make a decision around saving or a large expense based on their full financial state and c) manage weekly and monthly spending that track to a larger financial growth plan.
Third-party apps also tend to do a better job of: visualizing monthly spend to the user, gamifying savings opportunities and alerting users of relevant findings regarding their financial accounts. Promotional content and deals are focused on products that actually fit the consumer’s needs, rather than simply trying to sell him any given financial product.
This still-ripe PFM space has historically fallen under the FinTech umbrella and includes solutions focused on a niche areas within finance, such as wealth management, individual taxes, brokerage/investments or savings. For the below evaluation, we will examine the retail banking side of PFM, which loosely includes: month-to-month management of transaction accounts, bank card spending and short-term savings.
Six apps were selected for this evaluation, some of which qualify as “data aggregators” and others that are considered “neobanks” (PFM software providers that have partnered with FDIC-insured financial institutions to offer both proprietary banking products and the aggregation of external financial data). Savings-oriented apps like Digit and Qapital, and investment-focused apps like Betterment and Personal Capital, were not in scope for this evaluation. Additionally, many other retail banking PFM apps on the market were not included in this evaluation but are listed at the end of the post.
The six apps examined include: Mint, Moven, Clarity Money, Albert, Varo, Empower and Money Strands. All apps were iOS apps tested on an iPhone 6S. It is also important to note that the beta version of Varo’s app was used for this evaluation and that neobanks Moven and Varo were assessed on their ability to function as a data aggregator, rather than the experience that would be realized by a user managing funds through the Moven and Varo proprietary bank accounts. The six apps were evaluated against four primary tests, in addition to a general assessment of other features and functionality.
Test #1: Account Configuration
The vast majority of prospective users for an app delete or stop using an app that a) takes too long to set up b) is too complicated to set up or c) imposes some other challenge or friction during configuration. In the PFM world, quickly creating a profile and linking external financial accounts is of utmost importance. Too many security prompts or interruptions while linking accounts will deter prospective users. Additionally, sustaining a strong post-setup connection is critical to avoid manual user intervention.
Unfortunately, none of our six apps stood out in this test – all involved a fairly time-consuming set up process for four sample account linkages (one checking, two credit card, one brokerage). However, it’s important to note the role of external factors in the process. Access to wi-fi influences connection speed when initially linking an account. Additionally, some FIs, such as Capital One, require one-time access codes when provisioning data to a third-party app, in addition to the standard online banking login credentials. Though no app was terrific here, Mint and Money Strands both took especially long to link accounts and also suffered broken API connections at some point after account opening.
Test #2: Home Screen Interface
Having an intuitive yet informative dashboard on the home screen alleviates users of the need to search through an app to locate financial insights. This type of dashboard might include: how a user is trending on overall spend this month, the total available checking funds or any upcoming bills. In this test, apps were graded based on the presence of key financial data like aggregate balances and an easy-to-understand visual of monthly spending or budget variance.
Mint, Albert and Clarity Money both presented aggregate balance data but the latter two could have illustrated monthly spending better. Moven offered a simple yet impactful view of spending but chooses to show only the Moven account balance (rather than aggregate balances) on the home screen. And while its illustration could be more aesthetically pleasing, Empower displayed both aggregate balance data and a trend view of monthly spending on its home screen.
Winners: Empower, Mint
Test #3: Categorizing and Managing Spend
The active PFM user (aka type-A consumer) can be expected to manage subsets of monthly spend, such as food, personal care or shopping. This means setting category budgets and sometimes even splitting purchases at Target and Wal-Mart to properly account for spend across categories. In this test, apps were graded on their ability to display new transactions quickly (i.e. make them eligible for classification) and then provide flexibility to the user when tagging or hiding transactions.
Though all apps offer the ability to tag transaction by expense category, Mint and Money Strands were the only apps that offered the explicit capability to: create category budgets, split a single transaction amount across categories and create custom categories. Mint further separated itself from the group with the fastest average transaction processing time and the option to rollover budget variances into future months. Transaction categorization with Moven, Varo and Empower all suffered from significant transaction lag while Clarity Money offered the fewest number of transaction categories.
Winners: Mint, Money Strands
Test #4: Goals and Savings
Though none of surveyed apps are used heavily for wealth management or investing, their ability to identify available funds for savings and track toward savings goals were important features for this evaluation. Just as apps like Digit and Acorns offer ways for users to save on incremental card transactions, many of the surveyed apps provided means for setting aside savings funds each week and linking these virtual piggy banks to long-term goals or future expenses such as college or a new car.
Albert allowed users to save funds according to their own inputs or according to an “optimized” savings feature that withdrawals select amounts when the app believes it’s safe to. Moven, Clarity Money and Empower also allowed users to save specified amounts periodically or on a regular cadence that were tied to targeted savings goals. Mint and Money Strands offered their own version of financial goals that were not tied to explicit short-term savings features.
Winners: Albert, Moven
Other Category Winners
User Support: Clarity Money, Albert, Varo
Bill Tracking and Management: Mint
Subscription Tracking and Cancellation: Clarity Money
Alert Volume and Relevance: Albert
Financial Product Discovery: Mint, Albert
Top Four Recommended Apps
Mint has been the face of PFM since its introduction in 2006 and continues to dominate the market with its vast array of features. It was not only the most sophisticated when it came to categorizing spend but also was the only app in the evaluation that included a supplemental web app for managing finances.
I continue to be turned off by the large volume of promotional content that hardly ever relates to a real financial need of mine. Additionally, the app often times duplicates certain transactions that are initially categorized by the user while they are still pending (typically bar purchases that have tips subsequently added to the transaction).
Albert may lack the depth of PFM features seen in Mint or Clarity Money, but its simple and intuitive interface will appeal to the semi-engaged user that wants to limit the amount of time required to manage finances. Its financial insight “cards” offer some of the most relevant feedback that I’ve received from any bank or FinTech on my spending. I especially enjoy the savings feature that saves app-determined amounts when it’s safe to do so.
I’m not a huge fan of Albert’s financial health score. My score has taken a hit due to the fact that I don’t have auto or life insurance, even though I have no real need for either. While I like the idea of summarizing financial performance in the form of a single score, I think most users will have similar tepid interest in the feature. Instead, I would put a simple visualization of spending on the home page.
Moven might have the highest long-term potential of all apps evaluated, due to a number of unique features. Firstly, Moven provides the best visualizations of spend and has arguably the strongest commitment to financial coaching. Its real-time purchase notifications for the Moven debit card raise user engagement and can ultimately drive behavioral change.
The downside with Moven is a number of technical issues, some of which may be alleviated if a user were to only use Moven’s proprietary account and debit card. Moven currently suffers the worst transaction lag of any app surveyed, which erases the value of its Daily Digest feature. Other alerts and spend analysis are skewed due to the transaction lag and inability to hide a transaction from views.
4. Clarity Money
Rather than communicating a single day’s spending to the user, like Moven does with its Daily Digest feature, Clarity Money tells users what they spent over the past “few” days and whether the amount is higher or lower than usual. This is smart from the standpoint of minimizing the impact of daily transaction lag. Clarity Money is also more merchant-focused than other apps, allowing for subscription cancellation directly from the app and allowing users to quickly view spend at a given merchant.
I was less than impressed with Clarity Money’s UI and general layout. The long list of “tiles” on the home screen was overwhelming and the design felt a bit “kiddy”. The app also has a disappointing number of transaction categories, with no ability to customize these categories.
Other popular PFM apps not included in the evaluation: Level (Powered by Capital One), Wela, Spent
Other popular money management apps: Prosper Daily, Qapital, Acorns, Betterment, Digit, Personal Capital, Finovera, Sift, Wallet (CreditCards.com), NerdWallet, Hiatus, Robinhood