These days to get on the property ladder is a challenge for the majority of people. With the growing costs of rent and living expenses compared with the slow increase in salaries, getting a deposit together can often feel like navigating a minefield. In this guest blog post, FirstHomeCoach
share their insights on data sharing apps, how they work and their potential to help you get onto the property ladder a little bit faster, whilst improving the way you track your finances.
Let’s backtrack a little bit before we delve into the world of data sharing apps. In January 2018 a major change to the way banks manage our data took place. It’s called Open Banking and it’s causing a shift to the way we are managing our money. Instead of our personal data being something that is owned and accessed solely by banks, people are now able to grant access to approved external companies if they so wish.
The main idea of Open Banking is that it brings more competition and innovation to financial services which should lead to improved products to help people manage their money.
One way of this coming into effect is how you can now connect your bank account to an app that will help you analyse your spending. Another example is signing up to a provider which can display information from your multiple bank accounts in one place.
So, why would you want to do this? Open banking services can give personalised recommendations and provide a better overview. Essentially, it is one way you can get help with improving your financial habits and streamline the process of keeping on top of it all.
But Open Banking hasn’t been without its critics. Though some herald it as the start of a new revolution in banking, others warn of the potential threat to your private data.
According to Dave Tonge, CTO of Moneyhub Enterprise:
“One of the biggest barriers remains fear around sharing data. This reflects legacy issues within the sector and also how difficult banks have made it for consumers and new entrants including third-party money management tools. There is still… education needed to bring consumers up to speed with just how much Open Banking can improve their financial interaction, through monitoring spending and making better saving and investing decisions.”
Data Sharing Apps
Data sharing apps come in as the vehicle for open banking services to be delivered. In recent years, a cultural shift has taken place in the way we receive products and services. With more connected devices than people on the planet, expectations have been elevated and the connected customer wants to jump from desire to fulfillment with no stops in between. Whether it be getting a ride from point A to point B, ordering food or doing the christmas shopping, customers want a completely friction-free experience; and the property ladder is no exception. Here are some examples:
is a new app launching this year that will help users to think a little further into the future and work towards buying their first home.
FirstHomeCoach guides you through the entire house-buying process, step by step, helping you figure out how much you can afford and all the costs involved in buying your dream home. You can access all the information you need to help in your decision making and can connect with trusted advisers to assist with things like your mortgage, insurance, legal paperwork, etc. The great thing about the app is that, through sharing data in a secure way, the whole journey is personalised to your specific situation and it’s completely free. You can sign up here
for early access before the official launch later this year.
aims to give homeowners more control over all of the major home ‘activities’ by bringing together all your apps, services and online accounts into an easy to use dashboard with simple templates, documents stores and information tools. The platform aims to improve the house-buying and selling process by helping you get a home ‘sale ready’ by organising the documentation you will need to complete. It also provides a useful tool when running renovation projects and building house histories.
Monzo is perhaps one of the most well known data sharing apps. Monzo is basically a new kind of bank that lives solely on your smartphone. It sends you instant notifications when you spend money to help you keep track of what you spend and enable you to set targets and monthly spending goals.
But best of all for saving money is their Coin Jar feature. With this feature switched on, whenever users make a purchase of £1 or more Monzo rounds up the amount to the nearest pound - automatically adding the difference to the coin jar.
For those who find it hard to save money full stop, Chip might be a good start. A free app that is compatible with most UK banks. You connect it to your online banking and it stashes money away automatically without you feeling it.
“I think it’s amazing as I’m terrible at saving money but this calculates what you can actually afford to save, as opposed to me trying to save unrealistic sums. I never used to save anything but it has now motivated me to start saving more! ” - Harri Welch, 24, freelance journalist.
The Future of Finance is Bright
Ultimately it is down to the consumer whether they choose to share their data, but the benefits are clear. Rachel Springall, finance spokesperson at moneyfacts.co.uk, says how consumers looking to save money for a specific goal who feel that they don’t have enough disposable income could gain a lot from data sharing apps:
“Sharing their data with a budgeting app could uncover some unnecessary purchases and work out wh
ere they can save money, whereas before they may not have been as motivated to look deeper into their transaction history themselves.”
We’re still very much in the early stages of the open banking revolution, but technologies like the ones we’ve mentioned above are already transforming how financial services are delivered and bringing huge benefits to consumers. Improving the way you manage your money can enable you to put away more savings on a regular basis to reach that end goal of a deposit!