Financial technologies provide the opportunity to manage your personal and business finances better. Some of them also use automated budgeting that saves time and decreases the likelihood of mistakes. Budgeting automation with the help of a dedicated solution is one of the best tactics to optimize the spend management process.
In this article, we’ll tell you how automated money management apps work and the ways to build one for your startup or existing business.
- Two Main Types of Budgeting Automation Tools
- Budgeting Automation Technologies
- What Makes a Financial App a Budgeting Automation Tool
- How to Build an Automated Money Management App
Two Main Types of Budgeting Automation Tools
There are a lot of budgeting apps that can be tailored to different tasks and financial goals, and they can be put into two main categories of finance software by classifying them based on the target users.
- Personal finance apps. These are the budgeting tools that help with personal spend management, tracking and classifying it by category, notifying users of the amount spent and the balance available, and automating personal finances by scheduling automated payments like utility bills at the end of each month.
- Spend management apps for business. Enterprise budgeting software is aimed at solving more complex tasks than reporting everyday operations and updating the business owner on the balance available. A business budget management system generally comes with data consolidation features that gather financial information from multiple departments, access management features, procurement automation, and more in-depth reporting. Some of them also come with additional opportunities for budgeting automation, allowing a company to automatically pay taxes and salaries if they are at a fixed rate.
Budgeting Automation Technologies
Which technologies make budget automation possible and secure? Below are the key ones at the core of most money management apps.
- Artificial intelligence (AI) and machine learning (ML). These are the technologies at the heart of financial data processing, responsible for making smart suggestions on upcoming spending and ways to optimize finances.
- Blockchain and crypto. Blockchain is the most secure technology to date. Its decentralized nature makes transparent and irreversible transactions and protects your finances from fraud.
- Big Data and analysis. The budgeting systems that go beyond budget analysis and tracking are fueled by Big Data in conjunction with AI and ML. For example, there are automated stock trading apps, real estate investment planning applications, and personal savings apps.
- Open banking. Open banking is the technology that allows banks to share anyone's financial data with third-party financial service providers. This approach powers most personal budget trackers because the user has to connect their bank account to the app.
What Makes a Financial App a Budgeting Automation Tool?
Below are the core features of a financial app that make budgeting automation possible.
- Budget analysis. Before suggesting how to automate a financial process, a smart budgeting system has to analyze spending patterns and habits.
- Budget planning suggestions. AI-powered apps are aware of spending patterns in an automated budget and can suggest how to plan finances better for the short and long run. They allow a person to set financial goals and track their progress.
- Budget forecasting. Guided by historical data and aware of the current financial situation, some advanced budgeting automation systems can forecast the necessary budget for the following month, helping to allocate the amount needed to cover essential expenses and suggest ways to optimize costs.
- Smart savings or investments suggestions. AI-driven budgeting automation tools can provide users with saving or investment strategies depending on the goal.
- Automated savings and payments. With the help of budgeting automation software, users can set the saving options like saving 10% from each paycheck every week.
- Visual reporting. To make sure your financial strategies are efficient, fintech solutions automatically generate visual reporting that can also be customized by parameters and spending categories.
How to Build an Automated Money Management App
While careful budget planning, spend management, tracking and forecasting are essential for both private and corporate users, not all budgeting automation solutions in the market can meet all needs and goals. That’s why creating a custom application to automate finances can make sense. Below is a step-by-step guide on how to do it.
1. Choose a niche
The first step to creating an automated finance app is to decide on the target user and a niche. You can build an app for personal or enterprise use, but it is still necessary to narrow the specifics down. For example, you can create a solution for investment management or tracking personal spending habits and payments automation.
2. Decide on a platform and the corresponding technologies
You also have to decide which platform your future app will run on and the technologies needed to build it. Creating a personal budget automation tool in the form of a mobile app makes sense since most private users appreciate staying updated and managing their finances via a mobile device. As for the business spend management automation tool, developing a web app would be more logical, since this category of users is likely to access them from a desktop computer at work.
3. Determine the competition
You should also review competitive solutions that already exist in your niche, discover the features their apps have, and also look for the gaps. To do this, research users’ reviews of the product and suggest ways to solve the problems presented. You can also run market research and business analysis sessions, conduct focus group surveys and use economic research methodologies such as SWOT, PEST and Five Forces.
4. Shortlist the features for an MVP
After you are done with competitive analysis, you can create a shortlist of the features necessary to build a minimum viable product (MVP). Fintech startups usually identify the core feature of the future app, build and design it, and then test the MVP with the target users. There is no need for real user data integration at this stage. You can use random data samples to make sure the app works as it was intended and that the users are happy with the way it can help automate their budget.
5. Provide flexible automation options
After your MVP is tested and validated, it is time to add flexibility and customization options. For an automated budget app, providing the opportunity to set automated payments in a custom way is essential. Give your users some freedom on the operations they can perform, such as adding a feature that will let users automatically pay their loans first and then proceed with other payments.
6. Strive for design simplicity
Spend management has never been easy, so there is no need to overload your app with complex dashboards or to use trendy design solutions. The core goal of a budget automation app is to simplify financial management, so the dashboard should be clear and intuitive, and your overall design should not overwhelm users.
7. Prioritize data safety and ensure legal compliance
These are two more essential things you should keep in mind when creating a financial app. At this stage, it makes sense to hire a legal tech consultant and get in touch with a trusted fintech development vendor to ensure there are no security loopholes in the code and that the app works seamlessly with financial data.
Creating a custom application for budgeting automation and financial management can become a winning idea for companies looking for a way to run their financial operations in a smarter way. Cprime Studios has hands-on experience and expertise in fintech development. We would be happy to help you create a powerful, use-case-tailored, and protected app for users and enterprises - so get in touch!