5 questions to ask when designing a financial management app

Peter Drucker was on to something about money management apps. In his 1971 essay collection, Men, Ideas, & Politics, the father of modern management contended:

Now I’m fairly certain it wasn’t his experience with building PFM tools that prompted him to write this. Yet this was the Druckerism that immediately popped into my head after we’d run some user testing sessions just recently.

As part of the research, testers were shown a prototype of our personal financial management solution and were asked to play around with its more advanced financial health features. Think story-like balance updates, need-want-save spending breakdowns, and automatic budgeting tools. While mostly positive, the results were more mixed than we’d expected.

Test participants liked the idea of all of the above but didn’t seem blown away by how we delivered them. Going back to my Drucker moment, the findings made me realise that we were obsessing over the wrong question in building the prototype. That is, what data we should give customers? The question we should have focused on instead is: “How can we provide data in a way that truly helps people understand and take control of their finances?”

Without further ado, here are five questions you should ask yourself when designing personal financial management apps to make sure they get used – and loved.

1. Who do you want to cater to and what problem can you solve for them?

Repeat it after me: no Personal Financial Management (PFM) tool is for everyone and that’s OK. You can have the most well-thought-out money management features, it won’t make any difference to people who receive and spend their take-home pay in cash. Card users who live pay cheque to pay cheque might appreciate a tip on how they can save £50 on groceries, but those with padded current accounts are more likely to be looking for investment options.

Targeting everyone is the same as targeting no one. Step zero of making your financial health solution a success is carefully defining the customer segment it can create value for and how.

2. Is your financial management solution designed for gradual rollout?

It should be. Our findings highlighted just how overwhelming financial information can be for customers. Not to blow our own trumpet, but this is especially true for solutions as advanced as ours. Features are only as useful as their adoption. A phased rollout strategy can be your ticket to higher adoption rates as well as stronger engagement and loyalty.

Start by introducing, say, monthly spending insights to give customers a better picture of their monthly expenses and help them set a target for the next 30 days. Then, you can share mid-month insights on how they fare or allow users to track their progress themselves whenever they wish. Next, you can include daily spending trackers or yearly trend reports. The possibilities are endless. Your bank customers’ time and attention span are not.

3.  Do you talk about money the way your audience talks about it?

“Oh look, my current account balance is £1,450,” said no one ever. What a normal person would say is “I have £1,450 in my account” or “I have £1,450 left.” The difference is subtle but extremely important. The first example is how bankers speak. The second is how people who bank speak. It’s imperative that financial institutions, or anyone developing PFM tools for that matter, use clear, jargon-free language that users understand, find relevant, and can act on.

4. Do you explain financial health data to users or just dump it on them?

Let’s take the feature that we call Safety Buffer as an example. We thought it was a pretty clever name – and idea. It refers to the amount of savings that banking app users should keep in their current accounts just in case something happens. Because make no mistake, something is going to happen. Either the car will break down or the roof will start leaking or the fridge will give out. You get the idea.

We’d analysed spending histories and used sophisticated algorithms, then tried to diligently explain to users why and how we came up with the concept. Turns out, all we should have told them is: “Keep a month’s salary in your account to cover unexpected expenses”. To most users, everything else is just a distraction. If any information you provide needs context, consider hiding it behind an info icon to be revealed on tap or click.

5. Do users understand the goal of using a financial well-being app?

In a J.D. Power research published in April 2022, nearly 60% of customers said they wanted proactive help from banks to better their financial health, not simply tools to monitor it. This is critical and very much echoes the findings of our usability study. The ultimate goal of creating a money management solution should revolve around the benefits it brings to users, whether it’s smarter money decisions, greater resilience, or a sense of control. The same goes for how you communicate about it. Make sure that users understand that they should budget because it’s in their best financial interests, not because you happen to have a flashy app for it.

Intrigued? Get in touch so we can talk more about engaging customers through PFM tools and how our solutions can help you do just that. Plus, read our newest case study to find out how Raiffeisen Bank International has risen to the digitalisation challenge.