Accounting and Banking: design issues

I am no designer, nor a marketing specialist but as a bank customer (with different banking relationships) I can tell you I think my banking experience is pretty bad. Because I switched to a more corporate finance job, I finally realised what could be the root cause of this issue : accounting.

Accounting to be honest is not the most sexy topic, though it serves its use. It allows keeping track of a corporation financial situation by embedding control in the way it is done (double entries) as well as allowing a common language for several people working on the same topic or transitioning. Also in pre-computer era, it was built in relation with its support : books. Accounting on paper makes sense.

Good design (at the time)

But since I am not a corporation / nor an accountant by trade / nor doing my personal finance on paper, why are banks sending me banks statements in the format of accounting statement?

This makes no sense. Accountants must represent 0.01% of the population of bank customers.

Mint is a good example of design applied to financial information (while not the first and the best one). This makes much more sense than the previous statement.

Other startups, such as Simple [Note: Anthemis is an investor] are trying to redefine how financial information should be presented to customers. The first difficulty is to bring understandable information to each spending transaction. A better identification of the vendor and its category is key, notably for searching past transactions (also keeping more than 2 months of transactions helps).

Additionally, presenting not only an historical account of financial transaction, but also a forward looking view of a customer financial situation is moving from an accounting statement to a personal finance overview. This is not new as startups such as Rudder (http://mashable.com/2008/10/13/rudder/), have tried to show forward looking information. The concept of Safe to Spend balance used by Simple is in the same concept.

Fast Company has an interesting review of Simple design decisions: http://www.fastcodesign.com/1665303/first-look-banksimples-iphone-app-aims-to-reimagine-your-money

Other interesting design choices used by financial services that could be added to this post?

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  • http://www.dominicsayers.com Dominic Sayers

    So long as the charts don’t obscure the detailed facts, I agree.

    But I’m also interested in getting hold of my data as data. Spreadsheet skills are commonplace, but my bank doesn’t make it easy to get my data this way.

    Also, charging £5 for a historical statement just makes me cross.

  • Anonymous

    Yes, still thinking of creating “Banks, Free My Data!” T-shirts. Would allow tinkering more easily, which would help generate more innovation.

    + having only 12 months of archive (WTF?)

  • http://www.blogthib.com/ Docthib

    Very interesting article. I never saw it that way, but indeed, what a sad and boring format they give us. I would be interested indeed to :
    – track expenses with more than incomprehensible codes (who’s “vendor XXC”, which shop is it ?)
    – have *at least* one year history
    – in a spreadsheet format (I use CSV and constructed my own speadsheet, shheeshh !)
    – forward looking management should be great !
    – wire money with only an IBAN code (as of now, I must call the bank so that they create the access…)
    Keep up the good work !

  • https://holvi.com/ Tuomas Toivonen

    Bank accounts, by definition, are dumb. Money in, money out, bit of text for counterparty, maybe a reference number or other non human-readable remittance data, and MCC for card payments. This is not much metadata to work with. Trying to reconstruct the meaning of the transactions sometimes works, most often not.

    An accounting system, on the other hand, has all the necessary metadata to bring understanding to the money. For individuals, Mint and other PFM are trying to be that accounting system, but with basically using after the fact heuristics to glean meaning out of that limited metadata.

    At Holvi.com we’re working around the problem by issuing payment accounts directly to our customers, and capturing the meaning by facilitating the actual transactions. That way, our customers declare beforehand the meaning of future transactions. As a result we can provide very easy to use online banking that also gives you full double entry, accrual accounting. And automatically, no accounting skills needed.

  • Anonymous

    Thank you for your comment. I agree controlling actual payment is key (and one of the common element of startups like Simple or Square). Would love to know more about your solution with Holvi, very interested in the fact that you took the tough step of offering an actual bank account to solve group money management. 

  • https://holvi.com/ Tuomas Toivonen

    We initially implemented a working prototype using the PayPal Adaptive Payments APIs. While the APIs are quite powerful and we could build an okay solution around them, we found that the low integration level to traditional payment infrastructure was a serious limitation. If you want to be a serious bank account replacement, you need to be able to work with plain old credit transfers in/out.

    Combine PSD (lightweight regulation) with SEPA (single integration) and the European market is rather enticing for payments startups. Helpful banking partners are a plus.

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