Inaugural Digital Wealth Report by Investment Trends

By Jayson Forrest - Managing Editor  - IMAP Perspectives

A key finding of the inaugural Digital Wealth Report released by Investment Trends is that banking relationships are being redefined, with a host of smartphone apps and online tools emerging to help Australians better track their spending habits and establish their saving goals.

Many fintech start-ups have identified personal financial management (PFM) as an underserviced area, with many established banks responding by improving their retail online banking portal functionality to give consumers greater control and visibility of their finances.

“Local fintech start-ups like Moneybrilliant, Frollo and Pocketbook, have introduced solutions that empower Australians to take greater control of their spending and saving habits, while also challenging the established retail banks to step up,” said Investment Trends CEO, Michael Blomfield.

“Personal financial management is evolving from spend tracking based on historical data to focus on providing users with real-time actionable insights and behaviour management,” said Blomfield.

“Looking ahead, the Open Banking initiative will intensify competition and encourage consumers to re-assess their relationship with their main financial institution. A new generation of mobile-first apps, such as Up, Revolut and Monzo, now provide transaction capabilities through a debit or credit card, helping users monitor their spending and saving habits in real-time and engage more deeply with their finances.”

The research found that the direct to consumer (D2C) investing space remains ripe for disruption, and potentially from offshore.

 Microsaving (through transaction roundups) is a key feature of many successful consumer saving and investing apps. In Australia, more than 20 local start-ups have attempted to deliver automated savings services based on roundups, with Raiz Invest gaining the most traction.

 “The ability to automate the savings behaviour of consumers is a powerful proposition, and many apps have further improved the simple roundup functionality first introduced by Acorns in the US to give consumers greater flexibility and control, providing low friction opportunities to save,” said Blomfield.

 “Yet progress in the Australian D2C investing space has lagged overseas markets, such as the U.K. and the United States. Apart from a handful of start-ups, like Raiz, Stockspot and Clover, Australian investment product manufacturers have been slow to develop their D2C offering, leaving the market open for overseas players.”

In the 1st edition of the Digital Wealth Report, Investment Trends evaluated over 100 applications/services used to deliver wealth services to Australian consumers.

According to its analysis, Netwealth emerged as the highest overall ranked digital wealth application/service among established wealth institutions, while Moneybrilliant leads among fintech start-ups.

The 5 highest overall ranked digital wealth applications/services among established wealth institutions were:

1. Netwealth

2. BT Panorama

3. CommBank

4. Hub24

5. ANZ

The 5 top-ranking fintech start-ups were:

1. Moneybrilliant

2. Frollo

3. Pocketbook

4. Moneysoft

5. myprosperity

The Investment Trends 2019 Digital Wealth Report is based on detailed analyst reviews, which evaluated the digital technology used to provide wealth services to Australian retail consumers, encompassing online solutions and mobile apps launched by fintech start-ups and established wealth institutions.

The Report examined over 100 digital wealth applications and services launched by fintech start-ups and established wealth institutions, benchmarking their capabilities across 10 key attributes.

Note: The study was conducted between September 2018 and September 2019.