Financial trends: top apps and features for managing your money
What are the big financial trends right now? Dive into the world of finance technology and learn about the apps and features that will help you manage your money more effectively!
7 min read
We make it, spend it, save it, earn it. It makes the world go ‘round (or so the song goes). And these days, neobanks and fintechs are revolutionizing how we deal with our money. In this article, we’ll give you the lowdown on fintechs and other trends in the financial sector. Plus, we’ll cover some of the features of finance apps and how they can help you with your money management.
Budgeting made simple
The financial world is rapidly evolving
The financial sector is influenced by major social forces: digitalization, climate change, population growth, geopolitical tensions. Current major financial trends, like investments in renewable energy or cryptocurrencies based on blockchain technology, reflect how the world is changing around us. And technology is a major driver of new trends in the financial sector—for example, artificial intelligence and machine learning are opening new doors in anti-money laundering.
Disruptive innovations have been springing up in the financial world for several years, thanks to financial technology companies (referred to as “fintechs”). The number of banks in Germany has been dropping steadily for years. Many institutions are closing branches and shifting their business online. At the same time, new digital banks are entering the market and challenging traditional institutions. There are also fintechs that provide certain financial products, like crypto wallets.
Let’s crunch the numbers: Between 2015 and early 2020, the number of German fintechs jumped by 60%. In 2019, a study by the ifo Institute put the value of the fintech sector at €52.3 billion. In comparison, the size of the banking market was valued around €7.9 trillion. Innovative fintech companies might not be the majority of the market, but the annual growth rate is 119.2% on average. It’s safe to say that fintechs will continue to revolutionize the financial industry.
What are fintechs?
Innovative, disruptive, fast-growing—you’ve probably already heard the buzz about fintechs. But what are fintechs, exactly, and what do they do? Fintechs are companies, usually start-ups, that offer financial services using new technologies. Traditional banks are gradually introducing online banking to keep up with the times—but neobanks and challenger banks are digital from the get-go.
Fintechs are typically more agile than established financial institutions. They use technological innovations to provide customers with intuitive tools, greater security, and more transparency. For example, trading apps make it easier for private investors to buy and sell stocks, ETFs, or cryptocurrencies. Payment service providers allow customers to send and receive money in real time using their smartphones. Other finance apps let users effortlessly manage their budgets and spending.
The role of investors
It takes a lot of funding to develop and build new technologies. Like many start-ups, fintechs try to raise this capital through financing rounds. A start-up needs a convincing business model and strong negotiating skills to attract private investors (often called “angel investors”) who will support the company in its early phases—lending finances as well as expertise. As a general rule, private investors don’t hold any shares and therefore don’t vote for the board of directors or have other co-determination rights.
Institutional investors are entities such as companies, state organizations, insurance companies, or financial institutions. With this type of investment, financiers usually hold shares in the company and have direct influence on its strategy. Private equity investors are another option. Like institutional investors, they’re usually a private company and have a share in the profits. They’re often more open to risk than traditional lenders.
A KPMG study found that, in 2020 alone, a total of €1.2 billion was invested in German fintechs—part of the $71.9 billion invested worldwide. Neobanks raised the most money. And the financial trend towards fintechs is showing no sign of slowing down—these numbers have been rising steadily in recent years.
Finance apps for all of your money matters
Digital banks don’t have branch offices. Instead, all banking transactions are handled on mobile devices or through a desktop app. Other finance apps might be linked to a bank account, but they don’t belong to a bank.
Many finance apps are designed to help you monitor your spending habits, create shopping lists, or plan your budget. Finance apps from banks, on the other hand, let you open and manage your account, transfer money in real time, or even request a loan. Other finance apps can help you with your tax return or manage investments.
What are the benefits of finance apps?
Well-designed finance apps are similar to what you know from the other apps you use every day: they’re intuitive, simple, and fast. They offer financial services in a way that’s user-friendly and easy to understand. Especially for people who want services on the go, finance apps are a no-brainer. Planning a vacation budget, making a bank transfer, and generally managing your finances are all easier than ever.
How can you manage your finances?
Money management might seem daunting at first, but you’ll reap plenty of benefits. Keeping an eye on your finances will help you put your money where it matters most. Not to mention, if you have multiple accounts and investments, you’ll want to be aware of any fees. Finance apps and innovative tools like a digital budget book or spending manager help you keep track of where your money is going.
Digital budget book
Your first version of a digital budget book might be as basic as an Excel spreadsheet. You can enter your monthly expenses manually, add them up, and compare your spending with your income. The disadvantage: Excel spreadsheets aren’t that easy to manage on your smartphone. Also, it takes time to enter the figures manually, and mistakes can happen. Plus, you won’t have any easy-to-read charts that summarize your data—unless you’re an Excel whiz.
More practical are budget apps and free digital tools that do the work for you. The Insights feature of N26, for example, gives you an overview where you can see your monthly income and expenses at a glance. The detailed view shows you practical bar charts for the previous months. You’ll see when you spent less and which months were more costly—and what kind of expenses you had. Your transactions are automatically categorized, and you can also set your own hash tags such as #cashback or #gas. This allows you to see what you paid for your gas bill or how much cashback you received.
Tracking your own spending habits isn’t always easy. We start out with good intentions, but then there’s that extra drink on the night out with friends, or a few hunger-fueled impulse purchases at the grocery store. Spending apps and tools help you stay within budget. With N26, for example, you can set daily spending and withdrawal limits. This ensures you don’t spend more than you can afford.
The N26 Spaces feature for premium users lets you create up to 10 sub-accounts. Then, just drag and drop money from one Space to another. Your main account balance is automatically updated and your savings are out of sight, out of mind. And with Rules, you can set up standing orders and automatically put money aside in a Space on a regular basis.
Another of our top tips: activate the Round-Ups feature on your N26 account. This automatically rounds every card payment up to the nearest euro and transfers the difference to a Space. You’ll contribute to your savings without even noticing!
Spending app for couples
Living with your better half? A spending or budget book app can be especially handy for couples. Shared Spaces let you easily manage your household expenses. You can use your own individual accounts as usual, and collect and manage the money for rent, utilities, or food in a shared sub-account. If you have spontaneous or one-time purchases that you want to divide between you, you can split card payments with Split the Bill—no more bank transfers back and forth.
The bank account that gives you more control
Your money with N26
How did we get so knowledgeable about fintechs? That’s how we started out, back in 2013! We’ve held a full European banking license since 2016, and in 2021, we reached the 7-million-customer mark. With an N26 bank account, you have an all-in-one finance app, budget book, and spending tracker. Plus, you get 100% real-time mobile banking with no hidden fees and lots of security features. Use our free bank account and take advantage of Insights and withdrawal limits. Or, open a Premium account and get up to 10 Spaces (sub-accounts). Find out more about N26 or learn which account fits your lifestyle.
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