Millennials today are different from previous generations.
With access to the internet and a wealth of information that comes along with it, they are placing greater importance on their finances at a younger age.
This has led to a growth in demand for personal finance platforms.
In Indonesia, these platforms constitute the fourth largest category of fintech companies within the country, forming 7 per cent of the 362 registered companies in AFTECH (Indonesian Fintech Association).
With over 51 per cent of the country’s population below the age of 30, more millennials are likely to come onboard and personal finance platforms will likely maintain their upward growth trajectory.
While the term ‘personal finance’ can be all-encompassing and include everything and anything related to an individual’s finances, personal finance platforms generally focus on these key areas:
- Expense tracking
- Bills management
- Dashboard to track assets (eg. investments) and liabilities (eg. debt)
No accurate overview
Despite the increasing popularity of personal finance platforms, fintech companies providing them are facing difficulties obtaining the necessary information to provide an accurate overview of an individual’s financial position.
This hampers their ability to provide targeted insights that can help their customers improve their financial wellbeing.
The difficulty in obtaining a comprehensive picture of an individual’s financial position stems from the multiple accounts one has across different financial platforms.
Within a single day, we transact on a variety of platforms. From using our e-wallet to pay for food deliveries to making payment on an e-commerce website, the multiple platforms we use makes tracking our financial data a challenge for personal finance platforms.
However, this is a problem that can be easily overcome with Finantier’s account aggregation API.
Built upon the concept of Open Finance, our open APIs connect financial data from multiple platforms, enabling personal finance platforms to easily access them through a single API.
This allows these platforms to analyse their user’s financial position more accurately and offer relevant products that would convert better.
Troublesome to convenient
Another issue faced by consumers on personal finance platforms is the cumbersome onboarding process.
In the process of connecting their different accounts for verification and tracking purposes, users need to constantly switch between applications. This increases the likelihood of them dropping off during the registration process.
The solution to increasing user retention and reducing drop off rates is to provide a frictionless onboarding experience.
This is crucial as the registration process represents the first interaction between a customer and a personal finance platform.
First impressions do matter, especially when you are seeking to stand out in an increasingly competitive market.
Finantier holds the keys to providing a better onboarding experience.
With the consent of users, Finantier’s account and identity verification API allows personal finance platforms to securely view their data for verification purposes.
Besides allowing personal finance platforms to prevent identity theft and reduce fraud, these APIs would make auto-filling of forms possible and drastically reduce the time needed to onboard a user.
By enabling users to connect their different digital accounts without leaving the app, we help increase the ‘stickiness’ of personal finance platforms.
As a result of plugging these leaks, personal finance platforms can look forward to an increase in conversion rates.
Acting as the medium for individuals to manage their finances, personal finance platforms also serve as a one-stop platform enabling users to pay for their recurring bills.
However, these payments are often not automated and processed by third-party platforms. This results in missed payments and increased fees.
How can we enable personal finance platforms to level up and offer automated payments that can be embedded within their platform?
Enter Finantier’s Payments API.
Leveraging on Open Finance infrastructure, we bypass traditional third-party platforms to enable users to pay directly from their bank accounts.
We make automated payments a reality, helping users say goodbye to late fees. We enable personal finance platforms to achieve their ultimate goal - allowing consumers to stay in control of their finances.
With digital financial services revenue in Southeast Asia projected to triple within the next five years, personal finance platforms will have an important role to play in the lives of millions within the region.
Open APIs are the future
However, as this article has uncovered, there is work still to be done for personal finance platforms.
As seen from its success in Europe and the US, Open Finance is setting a new precedent in financial services, allowing financial institutions to build better products and access more consumers.
The leading personal finance platforms have already moved ahead of the pack by using open APIs to better serve their customers.
If you are a personal finance platform looking to gain an edge over your competitors, speak to us today to find out how we can help.