Translating the success of personal finance apps to SEA

Being in control of one’s personal finances is empowering. However, to meticulously account for all our transactions day-to-day is a huge pain point which is worth solving. Valued at approximately US$840 million, the global personal finance software market is projected to reach US$1.08 billion by 2021. At present, some of the most popular personal finance apps on the market command more than ten million users.

The increasing appeal of personal finance applications

One such popular app is called Mint. It primarily serves the North American market, and works with 16,000 financial institutions across the U.S. and Canada – allowing it to have automated aggregation of financial accounts under its service.

Besides allowing users to perform basic functions such as budgeting, bill tracking, suspicious activity alerts, and investment tracking, it also has a free credit scoring service for users to check and find out ways to improve their credit score. As such, it has minted tens of millions of users.

Localisation is key to the consumer’s piggy bank

In Southeast Asia, only 27% of its 600 million population have a formal bank account, according to the World Bank. The majority remain underbanked or unbanked, and the numbers diminish even further for digital banking access.

As a result, the relevance of one of the most important features of Mint – digital aggregation of financial accounts – gets called into question when considered in the Southeast Asian context. In addition, while Mint’s valued function of keeping up with and improving one’s credit score is useful for a region with a common credit scoring system like FICO, it loses its relevance for someone who is unbanked and has no credit score to speak of.

Realizing the need for localisation, personal finance start-up Seedly focuses only on the Singapore market, and has targeted features catering to specific Singaporean saving habits, while leveraging on the country’s strong financial ecosystem. Seedly has partnered with the major financial institutions of Singapore as one of its key offerings, much like Mint has done in North America, because Singapore is known for having one of the best financial infrastructures in the region.

Our take?

A successful personal finance app targeting Southeast Asia will have to genuinely understand the needs of its users. Southeast Asians are generally savvy savers, but lack financial sophistication. While it’s a fragmented market with at least more than a handful of spoken languages, Southeast Asians do share common traits – filial piety, belief in value of education, and respect for elders. This realization will help to keep future app designs relevant and user friendly.

One silver lining for the Southeast Asian market – people don’t generally trust banks, which means huge opportunities if personal finance players gain the market’s trust. Why fret if they don’t have a bank account? Provide them a digital wallet instead!

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