Five ways to better manage your money with banking apps as competition for customers grows

From categorising spending to credit limits, the latest mobile banking features can boost your financial wellbeing if used well.

Banking apps are becoming ever more popular as the big firms shift customers towards mobile banking away from the traditional bank branch model of doing business.

They are now having to be increasingly competitive with what they offer customers to sign them up or retain them as interest rates continue to rise.

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So if you want to get a better overview of your spending or to be warned when the amount of cash you’ve got left in your account is running low, the solution could be at your fingertips.

Online banking is becoming increasingly popular - and competitive.Online banking is becoming increasingly popular - and competitive.
Online banking is becoming increasingly popular - and competitive.

Banks are constantly adding new features to their apps to help people stay on track with their finances.

Katie Brain, a consumer banking expert at Defaqto, a business which analyses financial products and gives star ratings, says both high-street providers and newer banks are becoming more competitive with their apps.

She adds: “When choosing a provider, it’s always worth thinking about your spending and saving goals for the year ahead and finding which banks offer mobile banking features to help you manage your finances and boost your financial wellbeing.”

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Here are Defaqto’s top tools and tips to make the most of banking apps:

1. Use the upcoming payments functionality

Around a third of providers with an app analysed by Defaqto in February 2023 offer the option to view any upcoming payments, such as direct debits or standing orders.

Customers can select a date and view any payments due up to that date, based on previous payments.

This allows account holders to see the total cost of all payments, and how much they will have left once those payments have been taken.

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This can be particularly useful when you are reaching the end of the month in the run-up to payday, for example.

2. Categorise your spending

Nearly half of the 32 providers with an app analysed by Defaqto allow spending to be categorised.

Some, such as Monzo, Starling Bank and Virgin Money, allow account holders to create categories which are more bespoke.

This helps people see exactly where they are spending their money, and perhaps where cuts can be made.

3. Set a contactless payment limit

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Some banks give you the option to set a contactless payment limit below the standard £100.

This could help reduce your outgoings and make you think twice about spending a certain amount if you have to enter your pin for transactions above your set limit.

Around half of providers analysed by Defaqto offer this functionality.

4. Make use of alerts

Many providers offer alerts, such as notifying someone when the balance of their account falls below a certain limit, or when payments come in and out.

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Turning on the alerts available in mobile banking apps can help keep you mindful of your spending habits.

5. Block certain transactions

Many high street banks have the option to block gambling transactions, for example.

Depending on the bank, this can be done via the app, visiting a branch or via phone.