[MyData's Long Road Ahead]④ Detailed Spending Classification and Analysis in the US and Europe... Aggregated Data in Korea

[Asia Economy Reporter Song Hwajeong] # Mr. A, who lives in the UK, uses the 'Meniga' app to manage his expenses. It organizes income and expenditure in a social media (SNS) timeline format, and when there is overspending or unpaid taxes and insurance fees, warning or alert messages pop up, making it easy to manage expenses. After drinking excessively at a party with friends last night, a warning message inevitably appeared. Still, this month he is participating in a challenge within the app to reduce alcohol consumption, and his spending on alcohol has significantly decreased compared to last month.

# Ms. B, an office worker and housewife living in Seoul, has recently found it easier to organize her household ledger. This is because she can now manage various expenses and income all at once using MyData. Previously, she had to check her own and her husband's card statements every month one by one, but now she can see everything at a glance through the MyData service of her main bank. In particular, it analyzes which areas have high spending and compares them with people of the same age group, which helps her adjust expenses rationally. However, she wishes the classification categories were less limited so she could save expense details in more subdivided ways.

In MyData, 'expense management' is one of the most representative services. Most financial companies' MyData services provide expense management features. Consumers receive alert messages every time they spend and can check all their expense items at a glance. Financial companies offer customized consumption reports based on accumulated spending data or recommend new consumption patterns by comparing groups with similar income, age, and region. Overseas, services have already gone beyond simple expense management by classifying expense items much more precisely than in Korea, analyzing them to help daily life, managing even spare change, and operating differentiated services.

◆ Overseas Started Expense Management Early... Also Managing Spare Change

Meniga, a fintech company from Iceland, is famous for its personal consumption expense management service. It communicates with customers in a friendly timeline format like SNS and provides various services. It offers weekly and monthly consumption reports as well as status on rent and utility bill payments. It also analyzes personal consumption patterns to warn about overspending and provides discount coupons. Based on preferred spending categories, it recommends the most optimal card products for each individual.

Meniga's app is especially known for its automatic categorization of expenses. When customers initially respond with 'yes' or 'no' to whether the app's recommended classification is appropriate, the app learns from this feedback to refine its expense classification and analysis services.

For example, in the case of hobbies or leisure activities, most domestic services simply classify them under a single hobby/leisure category, but Meniga's app subdivides them into various categories such as art & crafts, entertainment & nightlife, hiking & camping, horseback riding, golf, and more. The shopping & services category is divided into clothing and accessories, interior items like flowers and candles, jewelry, laundry and repairs, alcoholic beverages, tobacco, as well as postage and delivery fees, and even carbon offsetting.

The US fintech company Acorns launched a financial product linking consumption and investment with the concept of 'spare change investment' as early as 2012, gaining tremendous popularity. Acorns' 'Save your spare change' service automatically rounds up the amount spent and saves the difference between the rounded amount and the actual spending. For example, if you spend $3.75, the difference between the rounded $4 and $3.75, which is $0.25, is saved. Also, if a consumer sets the spare change amount to $1 and buys a $14 item, the payment is rounded up to $15, and the remaining $1 is saved.

Following Acorns, several fintech companies such as Qapital, Revolut, and Qoins offer similar services. The US Qapital app automatically saves small amounts according to rules set by the customer. For example, after setting a budget per store, if less money is spent than the budget, the remaining amount can be saved. US-based Qoins uses spare change or periodic automatic savings to pay off customers' debts such as credit card or student loans. Unlike traditional services focused on saving and investing, Qoins emphasizes debt repayment. The UK Revolut app allows users to invest in cryptocurrencies using spare change.

◆ Domestic Expense Management Services Provided but Differentiation Remains a Challenge

In Korea, expense management services are also provided as a basic feature in MyData. Hana Bank recently launched the 'Hana Hap' platform, a MyData-based personal asset management platform, with the 'Hap Ledger' service that focuses on managing household assets and expenses. The Hap Ledger includes major expense items such as housing and automobiles, which account for a large portion of household assets and expenses, as well as expenses related to children and pets, enabling integrated expense management. KB Kookmin Bank offers customer participation content through its MyData 'Goal Challenge,' analyzing and diagnosing customers' assets and expense details to propose financial goals.

Spare change-related services are also being introduced one after another. Kakao Bank's piggy bank service is a representative spare change management product. If there is spare change under 1,000 won in the linked account, it automatically saves it. Kakao Pay Securities offers a 'Coin Collection' service that invests leftover change after Kakao Pay payments into funds. Toss introduced a service that saves spare change under 1,000 won into the Toss Money account after purchases. For example, if you pay 3,700 won with a Toss card, 300 won is saved. Fink's 'Habit Savings' automatically saves a certain percentage of payment amounts based on consumption patterns. It allows saving 5-50% of payment amounts in six categories: cafes, shopping, convenience stores, chicken restaurants, bakeries, and fast food outlets.

An official from a bank said, "Each bank provides expense management services through MyData, but so far, they are all at a similar level," adding, "We are all trying to present services that are at least somewhat differentiated from others."