HSBC has signed up more than 300,000 users to its new money management app in the U.K., an executive at the bank told CNBC.
Connected Money, which was launched last year, is an attempt by the 154-year-old institution to simplify expense tracking and budgeting for its customers. It shows a user their bank accounts from HSBC as well as rivals including Barclays and Lloyds.
A smart phone with the finance banking apps from HSBC.
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Raman Bhatia, who is responsible for HSBC’s digital business in the U.K. and Europe, said in an interview that the response from customers to the new app has been “pretty impressive” so far — and it’s also given the bank some crucial learnings on how to continue developing it.
“During the course of the last few months, what we have found is that aggregation per se is not that appealing,” he said. “What customers love about Connected Money is the ability to get more context around their spending and the ability to really turn financial coaching on its head.”
For example, the app includes features that let users categorize their spending, figure out how much money they’ll have left after bills and get messaged insights and tips about their transactions.
By contrast, U.S. rival Goldman Sachs said recently that it had attracted 200,000 customers in the U.K. for its digital retail bank Marcus. ING-backed start-up Yolt meanwhile, which is more akin to HSBC’s new app, has pulled in more than 500,000 signups.
Still, it’s an early sign of just how much traction one of HSBC’s latest forays into digital has gained.
The app is in part a response to new European rules that require banks to share their customer data with approved third-party firms — with customers’ consent — to enable them to create new financial products.
Referred to by industry insiders as “open banking,” the aim is to increase competition and enable firms to have access to more data to create a broader picture of people’s finances.
It also comes as HSBC and other large banks face increasing pressure from a variety of fintech, or financial technology, challengers — Revolut, N26 and Monzo just to name a few — which operate with only an app and no physical bank branches.
Moreover, fellow U.K. bank RBS is working on a standalone digital bank called Bo which is expected to launch later this year.
Longer term, Bhatia says Europe’s largest bank is expanding on a partnership between its internet banking unit First Direct and fintech start-up Bud — which it also invested in earlier this year. It’s also looking into using customer data and artificial intelligence to expand access to credit, he said.
“I think the long term vision for the banking sector as a whole is to provide very predictive, contextual access to credit not tied to products per se,” Bhatia said. “And I think that is the real opportunity not just with open banking but with AI providing much more context around spending and what is the right sort of credit access to them to make it seamlessly available.”
The Connected Money app, which has been live since May, is currently only available on the iOS operating system, but HSBC has said an Android launch will arrive this year. It’s also only available in the U.K. at the moment, but Bhatia has previously said the lender aims to take what it’s learned from the app abroad in the long term.