Personal Finance and Money Management Software Developers
Business for Sale Industry Economics
2002 - 2021
2021 - 2027
Companies that develop personal finance and money management software comprise the Personal Finance and Money Management Software Developers sector. The sector has maintained growth by continuously improving the quality and breadth of its services and expanding its user base. While the sector had a short setback in 2020 due to the COVID-19 (coronavirus) pandemic, this is not likely to have a detrimental effect on the sector’s future prospects.
As a consequence, industry income increased by 6.5 percent annually to $527.6 million during the five years through 2021, including a 5.2 percent gain in 2021 alone. However, when additional operators joined the market during the same time, competition rose; as a consequence, despite increasing revenue, industry profit fell somewhat.
Increased usage of the internet and mobile banking has benefitted the sector. Commercial banks license industry-specific personal finance software for integration into their online banking systems. The industry’s technological advancements have been mostly focused on advancements in artificial intelligence technology. These advancements allow more automation of services and allow operators to diversify their service offerings.
Classification algorithm improvements enhance budgeting, monitoring, and money management services, while natural language processing may automate customer support answers and sentiment analysis. Additionally, advances in cybersecurity technology have allowed integration with a broader variety of third-party operators, increasing bill payment and other services. These advancements aided the industry’s expansion and boosted its customer attractiveness.
Revenue is expected to expand at a 3.2 percent yearly pace to $616.5 million in the five years to 2026. Economic recovery after the coronavirus epidemic is projected to benefit the business since higher consumer spending will likely boost revenue growth.
Additionally, the customer base of the business is projected to grow as older customers gain awareness of the business’s product offers and younger customers continue to join the workforce. Additional operators are anticipated to join the sector as entrepreneurs with novel services and business models compete for a piece of the expanding market, intensifying industry rivalry.
Personal Finance and Money Management Software Developers create websites and mobile applications that help users manage their personal money. The sector continues to adapt and flourish as new enterprises join the market and operators develop and execute unique sorts of services.
Over the five years to 2021, developments in the industry’s goods, such as improved integration of artificial intelligence (AI) technology, more diversified service offerings, and higher-quality user interfaces, have all contributed to the industry’s revenue growth. As a consequence, industry sales climbed by an annualized 6.5 percent over the last five years to $527.6 million.
Throughout the present time, improvements in AI technology have had a varying impact on a broad array of businesses, however, the overall trend has been toward increased productivity, efficiency, and service offerings. In this sense, the Personal Finance and Money Management Software Developers sector is no exception. The use of artificial intelligence technology in industrial services has been revolutionary and far-reaching.
AI algorithms provide critical functions in many operators’ business models, such as categorizing and grouping customer spending behavior. As a consequence of these advancements, the accuracy, usability, and predictive capacity of industrial services are increased. Operators may now incorporate chatbots into their mobile and web apps as a result of advancements in AI technology.
Additionally, AI technologies enable the generation of sophisticated analytical insights into customer behavior. These insights benefit both financial services industry operators and their customers, such as those in the Commercial Banking business.
As centralized platforms for consumer finances, they provide the most comprehensive perspective of customer financial activity by aggregating data on a customer’s bank accounts, credit cards, loans, and assets. With the advancement of machine learning algorithms and general AI technologies, underwriting, product development, general research, predictive behavioral modeling, and other uses of AI technology all benefit from access to such a comprehensive and data-rich environment.
As a consequence, industry participants have increasingly sought to broaden the scope of their offerings. From bill-paying services to long-term financial planning, a combination of technical innovation and centralization of consumer money benefits a variety of functionalities. As a result, although banks have improved their own consumer finance platforms, the specialization and centralization given by industry operators’ platforms make them far more appealing to customers.
Additionally, banks are not always in direct competition with industry operators, since subscriptions to industry services are non-competitive with the usage of bank-issued credit cards. Additionally, banks use operators’ personal financial management systems and aggregation tools for their own applications, implying that banks’ supply of such services may continue to assist industry operators.
This is the business model for the Yodlee part of Envestnet Inc. Additionally, individual banks lack the capability to offer information on other banks’ accounts that individuals may have, a capability that industry operators do possess. According to Intuit Inc. (Intuit), the typical age of Quicken customers was between $75,000 and $100,000 when Intuit sold the personal finance platform in 2016.
As a result, since higher-income customers are more likely to employ industry services and are more likely to have several bank accounts, bank account aggregation services provide a significant competitive advantage to industry operators.
The Personal Finance and Money Management Software Developers industry primarily develops website and mobile apps for consumers to manage their personal finances. The industry continues to evolve and grow, as new businesses enter the market and novel types of services are conceived and implemented by operators.
In particular, advancements in the industry’s products, including better integration of artificial intelligence (AI) technologies, more diverse service offerings and better quality user interfaces have helped drive industry revenue over the five years to 2021. As a result, industry revenue has increased, rising an annualized 6.5% to $527.6 million over the past five years.
During the current period, advances in AI technology have affected a wide variety of industries differentially, although the general trend has been to increase productivity, efficiency and the range of service offerings. The Personal Finance and Money Management Software Developers industry is no different in this regard. The application of AI technologies to industry services has been fundamental and far-reaching. Essential aspects of many operators’ business models, such as classifying and clustering consumer spending behavior, are done by AI algorithms.
As a result, improvements in such algorithms increase the accuracy, usefulness and predictive capacity of industry services. Enhancements to AI technologies have also enabled operators to integrate chatbots into their mobile and web applications.
Moreover, AI technologies are capable of generating advanced analytical insights into consumer behavior. These insights are of value to both industry operators and their clients in the financial services sector, such as the Commercial Banking industry (IBISWorld report 52211). As centralized platforms for consumer finances, which aggregate information on all of a given consumer’s bank accounts, credit cards, debts, investments and more, they offer the most comprehensible view into consumer financial behavior.
As machine learning algorithms and general AI technologies become more sophisticated, underwriting, product development, general research, predictive behavioral modeling and other applications of AI technology all benefit from access to such a comprehensive and data-rich environment. As a result, industry operators have increasingly attempted to increase the scope of their products.
Functionalities ranging from bill-paying services to long-term financial planning all benefit from a combination of technological advancement and centralization of consumer finances. Consequently, although banks have enhanced their own consumer finances platforms, the specialization and centralization offered by industry operators’ own platforms make them distinctly attractive to consumers by comparison.
Further, banks do not necessarily compete directly with industry operators, as subscriptions to industry services are nonrivalrous with the use of bank-issued credit cards. Moreover, banks use operators’ personal finances systems and aggregation tools for their own applications, so the provision of such services by banks can still benefit industry operators. This is the business model of Envestnet Inc.’s Yodlee segment.
Individual banks also lack the capacity to provide information about bank accounts consumers may hold with other banks, a capacity that industry operators do possess. According to Intuit Inc. (Intuit), the median age of Quicken users, a personal finances platform Intuit sold in 2016, was between $75,000 and $100,000. Thus, since higher-income consumers are more likely to use industry services, and such consumers are likely to possess multiple bank accounts, bank account aggregation services constitute an important competitive advantage for industry operators.
The Personal Finance and Money Management Software Developers sector is expected to expand at a rate of around 5% per year through 2026. Consumer adoption of industry services is projected to increase as current services improve and new ones are introduced. Additionally, when the economy recovers from the recession caused by the COVID-19 (coronavirus) pandemic, the sector will very certainly profit from general economic recovery. As a consequence, industry income is predicted to increase by 3.2 percent annually to $616.5 million by 2026. Profitability is also predicted to rise throughout the same timeframe due to comparable considerations.
Throughout the projection period, the continued interaction of industry operators, consumers, and downstream customers is projected to continue defining and establishing the sector’s core structure. Operators will almost certainly aim to enhance their service offerings to customers in response to consumer demand and fresh industry service developments. These types of services will very certainly continue to utilize artificial intelligence (AI) technology by automating customer suggestions and interactions.
Additionally, operators will continue to compete to create the most commonly utilized centralized financial services platform. Operators may do this by forming agreements with third-party customers, such as banks and lenders, and purchasing startups that may help them extend their consumer service offerings.
Newer services that may become more appealing to include into current personal money management platforms include personalized tools for assessing personal budgets and long-term financial planning, as well as enveloping, investment guidance, and debt management. The convergence of artificial intelligence technology with such services, as well as unique sorts of services and approaches to typical personal financial challenges, are likely to generate fascinating innovations in the business going ahead.
On the business-to-business side, the industry’s prognosis is likewise predicted to be favorable. The emergence of Big Data analytics has had a profound effect on almost every aspect of contemporary life, including banking. Banks and other financial institutions should continue to use industry services to get insight on consumer spending patterns and wider financial behavior.
The integration of the conventional financial services sector and industry operators may intensify, resulting in innovative income streams for industry businesses and an enlarged area of industry operations. As a consequence of these trends and possible prospects, the sector’s flow of newcomers is predicted to continue, with the number of industry firms predicted to grow at an annualized rate of 7.1 percent to 114 operators over the five years to 2026. Additionally, the number of industry employees is predicted to increase in lockstep with business development, expanding by an annualized 4.8 percent to 1,791 people over the same time.
Despite a strengthening economy, expanded industry offerings, and increased demand for personal financial software, the sector is projected to confront significant challenges. External competition might intensify from digital businesses that have historically not operated in the financial services sector but have considerable access to customer data, such as Facebook Inc., Amazon Inc., and Alphabet Inc.’s Google LLC.
These firms do not already provide personal financial management software, but they might create technologies that access large pools of consumer behavior data, leveraging significant economies of scale and putting industry operators at a competitive disadvantage. While such businesses are unlikely to produce the precise package of services now and potentially supplied by industry operators, they may acquire smaller industry operators or establish platforms that siphon demand away from suppliers of certain industry services, such as bill monitoring.
Due to the very sensitive nature of the information they manage, cybersecurity continues to be a top priority for industry operators. The sector has a significant problem as a result of a rising trend of attempted cyberattacks against operators. If such an assault succeeds, it has the ability to significantly harm the image of industry services or to bankrupt an individual firm. Additionally, rising financial regulation in the personal finance management software market, or subsequent regulatory tightening, might limit the industry’s future growth potential.
This industry produces personal financial management software. The products are designed to assist consumers in managing their various financial assets. Often, the software will provide single-password access to numerous sources and account aggregation. This sector encompasses both packaged software and software that is exclusively available online.
Personal Finance and Money Management Software Developers is at a growing phase of its life cycle. Industry value added (IVA), which measures an industry’s contribution to the entire economy, is predicted to grow at a 6.9 percent annualized pace during the next decade through 2026. By contrast, the US GDP is predicted to expand at an annualized pace of 1.9 percent during the same time.
When an industry’s growth significantly exceeds that of the general economy, it is often said to be in the growth phase of its life cycle. Additionally, the sector continues to see an inflow of new operators, with the number of businesses, predicted to expand at an annualized rate of 9.0 percent over the next decade. Additionally, the industry’s goods and features are continuously evolving, and the services it provides have not yet been classified into distinct and stable categories.