Digital Solution for Financial Management

Create a digital solution that addresses a specific financial management problem by applying the design thinking methodology.

Empathize

Understand the challenges and needs of people who struggle with financial management. Learn their pain points and behaviors through research.

Target Audience

In this project, I am targeting young people in the early stages of their careers, aged 20 to 35, who have entry-level to mid-level salaries and are comfortable using technology such as e-banking. They lack the skills to manage their finances and are transitioning toward financial independence.

Research Method

  • Surveys
  • Interviews

Research Outcomes

  • 80% of users manually track their expenses.
  • 10% do not track their expenses.
  • 10% use automated expense tracking using their bank’s website.
  • 40% of users find it difficult to save money.
  • The majority of users engage in impulsive spending.
  • The top three spending categories are food, shopping, and bills.
  • Users struggle with unexpected expenses, such as medical bills.

Users’ Challenges

  • Difficulty saving money.
  • Impulsive spending habits.
  • Not tracking finances or manual tracking of income, expenses, and savings.
  • Managing emergency expenses.

Users’ Needs

  • A secure solution.
  • Tools to improve financial literacy and skills.
  • Assistance with tracking expenses.
  • Guidance in saving money.
  • Features to reduce impulsive spending.
  • Optimized financial management to increase savings and reduce unnecessary expenses.
  • Better planning for emergency expenses.

Problem Definition

People in the early stages of their careers face difficulties managing their finances. Research shows that 80% of people aged 20 to 35 manually track their income, expenses, and savings, a process that is time-consuming, prone to errors, and often poorly organized. In addition, 40% of users find it difficult to save money, and impulsive spending is a common challenge. Users are seeking a secure solution that helps them track expenses, save money, and limit impulsive spending. An ideal solution would also enhance users’ financial skills, optimize overall financial management, and support better planning for emergency expenses.

Ideate

Brainstormed Solutions

  • Idea 1: A mobile application that compares the product prices across different shops and displays the cheapest store to purchase from.
  • Idea 2: A digital wallet that automatically deducts a certain percentage of a user’s salary each month for savings, with limitations on withdrawing the money.
  • Idea 3: A dashboard that displays transactions divided into categories, along with multiple digital wallets dedicated to saving for specific goals.
  • Idea 4: A mobile app that allows users to scan receipts, extract transaction information, and automatically categorize expenses.
  • Idea 5: A mobile app that tracks transactions, rounds up fractions, and transfers them to a savings account.

Ideas Evaluation

  • Idea 1: Comparing product prices to choose the cheapest option would help users save money, but would not track their expenses. This only addresses one problem, and the amount saved is not guaranteed, as it depends on the market.
  • Idea 2: Automatically deducting a certain percentage of the salary for savings is a good idea, but it only solves one problem. We still need a way to track users’ expenses.
  • Idea 3: A dashboard that allows users to track their income, expenses, and savings, along with multiple wallets dedicated to specific savings goals, would address both the expense tracking and saving problems effectively.
  • Idea 4: Scanning receipts still requires some manual input from the user, and it would be more effective if we could automate the process.
  • Idea 5: Rounding up transaction amounts and transferring the difference to savings is good, but it will take time to accumulate enough savings to make a noticeable difference.

Solution

To address the challenges of saving money, impulsive spending, and manually tracking income, expenses, and savings, I propose combining two ideas.

The user will scan their receipts using a mobile app. The app will analyze, categorize, and add the expenses to their records. This way, the app will not be linked to the user’s bank account for security reasons, and both cash and card transactions can be tracked through receipt scanning. This solves the users’ first problem: tracking their finances. For a detailed analysis of their spending habits, the user can log in to a website to view the dashboard.

To help users save money, they can create multiple digital wallets on the app, each dedicated to a specific savings goal. For example:

  • Digital Wallet 1: Saving for a vacation, the goal is $5000.
  • Digital Wallet 2: Saving for a new car, the goal is $15,000.


The user can set a goal for each wallet and specify the amount to be automatically transferred from their bank account to each digital wallet on a monthly basis. They can access their savings to withdraw money every quarter, with a limit of 20% of the available savings per withdrawal.

I believe that automatically deducting savings each month and limiting withdrawals will help reduce impulsive spending. Additionally, having access to an analyzed breakdown of their finances will empower users to make better spending decisions.

After using the app for some time, it will learn the user’s behavior and begin offering personalized suggestions to improve financial management.

Prototype

A smart finance app that helps users track their money with ease. After logging in or registering, users can view a quick summary of their income, expenses, and savings, scan invoices or upload photos to automatically extract items, prices, totals, dates, payment methods, and categories. The mobile app provides simple insights, while a web dashboard offers detailed analysis with charts showing spending by category and over time. Users can also create digital wallets to save for specific goals and track their progress visually.

Usability Testing

Usability testing was conducted with three users from the target audience to validate the initial idea:

  • User 1
    A 23-year-old male, a fresh graduate in the early stages of his career, working in the IT sector.
  • User 2
    A 27-year-old female in her early career life with two years of experience, working as a personal trainer.
  • User 3
    A 32-year-old female with seven years of experience and a senior position in construction.

Feedback

Overall, the feedback was positive, and the users expressed interest in using this solution.

  • User 1
    Prefers the ability to withdraw money from savings in case of emergencies. He also would like to see a chart that tracks money deposited and withdrawn from savings. Additionally, he would like the option to manually add invoices if the ink on receipts has faded.
  • User 2
    Would like the option to manually edit income, expenses, and savings because her income varies each month due to freelance work, and sometimes she gets paid in cash.
  • User 3
    Suggests the solution should consider online payments as well. She would also like the ability to generate a report for a selected time period.

Iterate

After several design iterations and testing, the refined solution:

Instead of using the app solely for scanning invoices and the web dashboard for analysis, everything is now available within the mobile app to avoid confusion and unnecessary back-and-forth between the app and web.

From the home screen of the app, users can see a summary of their income, expenses, and savings. The expenses are color-coded by category, and when tapped, each category will show the amount spent. The digital wallets are also displayed, showing the progress toward each savings goal. Additionally, a section for selecting a date range and downloading a report has been added, allowing users to generate financial summaries for specific periods.

Invoices can be scanned or entered manually. For example, online purchases can be entered manually. The scanned invoices can be edited in case of scanning errors or if the ink has faded. Categories are automatically assigned to each invoice, but users can edit these categories if needed.

The savings screen shows the progress for each digital wallet, allowing users to track how much they have saved for each goal and filter by month.

The expenses screen gives a breakdown of percentages for each category, and a chart below shows daily spending.

Based on usability testing feedback, the limitation on withdrawing money from the wallets has been removed. Now, money withdrawn from a wallet is displayed as a negative balance.

Income can be edited in the settings, allowing users to adjust if their income is not stable from month to month.