Ian McKenna: How clients will manage their money in the future

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For many years Finovate has been recognised as the event to showcase truly innovative services intended to disturb and transform the personal finance market.

This week at its European event 70 organisations, covering areas from cybersecurity to payments, peer-to-peer lending to financial advice, had a seven-minute opportunity to present their vision of the future. In this analysis, I want to look at just a couple that are directly relevant to the way consumers are likely to manage their money in the future.

MoneyHub is not new to this column or Finovate, although since I last looked at it in detail it has been acquired by South African financial services conglomerate Momentum. Given the new parent already had a similar personal financial management service in South Africa it is a huge compliment to the team at Blue Speck Financial, which produced MoneyHub and sister Yourwealth.co.uk, that Momentum saw features in the offering which made it attractive to acquire rather than bring its existing service to the UK.

At the beginning of the week MoneyHub showcased its Goal Life Planner, which shows how a personal financial management service can enable consumers to easily differentiate the impact on their wider life of choosing to spend (for example, holidays or paying off mortgage) or invest money in different ways. Using clear graphics and visuals, it takes financial planning and applies it in a lifestyle context. For instance, if a client receives a bonus, rather than just show the impact of different actions in cash terms, they are also represented as lifestyle benefits, such as paying a mortgage off “x” number of days earlier or being able to retire “y” days sooner if the money is committed to a pension.

The connection centre within the system integrates data feeds from Yodlee and other organisations to offer a detailed picture of the client’s financial life.

This latest iteration of the service, which is due to go live in the summer, will be available in three versions:

  • A customer direct offering via Yourwealth.co.uk, which is free or £10 per year with the Yodlee aggregation.
  • A version for IFAs and smaller wealth organisations called MoneyHub Connect, which, for £1,200 per year, will give advisers a lightly branded way to deliver a consumer service to clients. This includes the Yodlee aggregation for the first 20 clients and then there is a per-customer cost if that service is required.
  • A larger corporate version.

The company tells me that in using its connection centre advisers will still have the ability to port data in and out of the service even if they use a version delivered by a bank. I will be interested to see this work.

Meanwhile, affinity discounts play an important role in many employee benefits packages and are increasingly seen as a great way to complement financial education services providing savings to encourage user engagement. The technology to support such services has advanced rapidly in recent years. The card-linked offers platform demonstrated by Strands Finance is a great example.

When integrated with personal financial management, offers can be focused on behavioural activity on the customer’s bank account and credit cards, so the system targets users with those relevant to them. In addition the service uses a range of other factors, such as how much money has been spent in what types of shops, as well as wider demographic considerations.

A socialisation feature is included within the personal finance management version, where users can update their profile to include more information (such as personal hobbies and if they have children), which in turn improves the data used to target suitable offers. Each time a user accepts or rejects an offer, the model is evolved to improve the targeting of future offers.

The service is available either linked to Strands’ personal finance management offering or as a standalone component. As an advanced offers targeting platform I see this having huge potential in the employee benefits market and driving wider engagement with auto-enrolment, both in isolation and as a part of a wider range of service using personal financial management.

Ian McKenna is director of Finance & Technology Research Centre