A comparison between money management apps in the Dutch banking sector
Most consumers do not consciously choose which banking app they use for their daily banking business - they tend to use the one offered by the bank at which they have a current account. Yet, open banking - in theory - allows consumers to have all their banks accounts with one bank but use the app of another bank or even a non-bank.
As this puts banks at risk of losing an important mobile channel for daily interaction with users, they are increasingly seeking solutions that give them an extra competitive advantage. In this search, money management solutions (often called PFM solutions) are considered relatively low-hanging fruit. This article compares the money management solutions that are currently offered by Dutch retail banks and draws conclusions on the status of the PFM market.
ING, the largest retail bank in the Netherlands, does not position itself necessarily as a supplier of money management tools. As a result, it does not offer elaborate solutions in the area of micro-managing personal finance such as categorisation of expenses or budgeting. Nevertheless, their ‘Kijk Vooruit’ functionality is one of the most used features. Additionally, ING is oriented towards a smooth customer experience which is reflected in a high level of personalisation. Notably, ING’s subsidiary Yolt is active in the UK personal finance market and may in the future become active overseas. On top of that, ING does not yet allow any form of multi-banking but did invest in multi-banking platform Cobase. All in all, this may suggest that ING’s short-term strategy is not to conquer the Dutch personal finance market.
In a recent marketing campaign, Rabobank explicitly markets itself as increasingly becoming a ‘financial coach’. The app has recently been upgraded with multiple features in the field of money management. It appears, contrary to ING, Rabobank does intend to become the go-to app for daily banking business and managing personal finance. The app appears to offer most elementary functionalities in the field of categorisation and budgeting. It sets itself apart slightly through certain novelties such as transaction-based saving and a function similar to ING’s ‘Kijk Vooruit’, but does not pose truly distinguishing capabilities.
Although ABN Amro has a general mobile app, their presence in the field of personal finance management is more explicit through their standalone Grip app which focuses specifically on personal finance management. In the past few years, ABN Amro has strategically invested several millions in Tink - the company providing the enabling technology behind the app.
Grip offers elaborate functionality when it comes to budgeting, categorisation and similar micro-management options. The app distinguishes itself mainly in the weekly and monthly graphs it provides for detailed micro-management of finances. The available push notifications are furthermore very personalisable. ABN Amro is also the frontrunner in enabling multi-banking, allowing users to connect accounts of all major banks to its apps.
This digital-only bank is fully owned by ABN AMRO and is oriented towards saving, lending and mortgages. Their apps offer clever solutions for organising savings, but do not necessarily offer tools for management of transactions, subscriptions or budgets.
De Volksbank (ASN, SNS, Regiobank)
De Volksbank has three different banking labels (ASN bank, SNS bank and Regiobank) and aims to provide a human touch in banking. As a result, they express that providing financial health to their users fits their overall mission. The apps for all three labels offer broadly the same functionality and are quite all-encompassing when it comes to categorisation, budgeting and personalisation.
De Volksbank also has a beta testing app ‘Sl!m’ where they involve users in the development of more innovative features in the field of personal finance, like voice controlled banking or projecting the money free-to-spend.
The self-proclaimed ‘bank of the free’ has always been a frontrunner is consumer-oriented finance solutions. Hence, it offers a generous amount of functionality to provide control over smaller-scale finances and savings. Bunq’s latest update also included a categorisation of expenses. Notable is the high level of personalisation offered by Bunq, which may well be a result of its strongly consumer-oriented way of development.
Financial planning is one of the pillars of Knab, which naturally includes daily personal finance. The app offers useful functions for optimising savings behaviour and offers an unlimited amount of savings pots to be created. In terms of categorisation and personalisation, the app allows some elementary functionality. What sets Knab apart from the rest is its integration with web-based financial planning tools which can be used for scenario modelling and more detailed financial administration.
Triodos is a sustainability-oriented bank which evangelises social and environmental sustainability. As a result, their focus is currently not on personal finance management and its app does not offer any money management tools per se. It is expected that personal finance becomes more interesting when brought in relation to the topic of sustainability.
Banks are to an increasing extent checking the boxes on features for money management. The overview provides a comprehensive indication of the differences between the PFM solutions of the different banks. Not only does this pinpoint where opportunities still lie, it also potentially indicates the strategic direction that the different banks are taking in the field. Nonetheless functionality like categorisation, budgeting or savings pots all concern the micromanagement side of personal finance. A justifiable question is therefore whether such functionality is distinguishing enough to provide true competitive advantage and win over customers’ digital loyalty. In the end, better financial decisions for consumers will have to go beyond categorisation of expenses and also take in to account many (non-)financial services like living, investing or pension planning. When banks succeed in offering tools that help consumers make better financial decisions in this broader sense, a more distinct competitive advantage may be gained. On the other hand, expecting this from banks may be very premature, considering the early state of the open banking market in the Netherlands. At this point, the development in personal finance seems more about getting up to par with the elementary features consumers expect rather than being truly distinguishing. Perhaps the current developments are a ‘levelling of the playing field’ and true competition will kick off in the coming period.