Banks used to be boring. Put your money in or take it out—this was basically it. Over time, when banking went universal with investments, insurances, mortgages and so on, it became more flexible, but also more complex. Fortunately, online banking simplified many processes and enabled more services available to customers.

The question is, do banks really need more functionality around their usual business? Do their clients want bells and whistles in transactional systems? Is simple really better?

Banks used to be boring. Put your money in or take it out—this was basically it. Over time, when banking went universal with investments, insurances, mortgages and so on, it became more flexible, but also more complex. Fortunately, online banking simplified many processes and enabled more services available to customers.

The question is, do banks really need more functionality around their usual business? Do their clients want bells and whistles in transactional systems? Is simple really better?

Online banking can open a whole new world of possibilities both for clients as well as banks. Staying traditional for the sake of simplicity of the user interface means losing existing customers in favor of third party products and services. Fortunately, enhancing the online banking experience is not that complicated, since there are many interesting solutions on the market ready for a quick integration with the banking system.

Let’s start with the fundamental truth about banks: they know a lot about us. Probably more than any other institution or organization. They know our incomes (and their sources), spending patterns (services and products we pay for, as well as points of sale), family and even health status, and many more information that can be extracted from the transaction history.

Personal Financial Manager

So, if banks know that much, perhaps they could help us, their clients, with organizing our lives—at least on the financial level. This is where the Personal Financial Managers like Perfectsen step in. PFMs are to transaction history like charts to numbers in spreadsheets: they make data easily digestible to the reader. Instead of mysterious, cryptic columns with amounts and merchant names, users get their financial information categorized into types of spending, like “food”, “events”, “car” etc. Therefore, clients can get a quick insight on how they spend their money and as a result, efficiently control their budget.

Advanced PFMs allow their users to set goals such as to save a defined amount of money or limit monthly expenses to the specified level. If a bank uses an API, it’s PFM can also retrieve clients’ financial information from external sources—accounts in other banks, insurance companies, stock traders and so on—giving the customers the full picture of their financial status in one place. This is not a gadget, it’s a vital and useful tool for the most of bank account owners, provided that it’s intuitive, easy to use and simple, yet powerful.

Why is it important for banks to include PFMs in their online systems? First of all, their customers need it. Some of them will use it just to clearly see where and how they spend their money, but some will take this tool seriously and start planning and controlling their budget. Either way, the users will stay longer in the online banking system and visit it more often. Secondly, if they decide on saving more money, they will more likely use one of their bank’s offers of deposits or investments. And last but not least, the customers will not go for a third party PFM solution when they need it.

Banking API

The next element, which should be included in online banking, was already mentioned: a banking API such as Kontomatik Banking API. It enhances the regular transactional system with functionalities otherwise unavailable, since they rely on information stored outside of a bank. APIs can reach for this data and give users more options. Let’s imagine an account history page, which not only shows transactions made, but also gives tips based on what and where a user paid for. These tips could be special offers from the bank’s partners—for example, a deal on similar purchases in the future. Or it can be an instant offer in the mobile banking app: when a client buys a flight or railway ticket, he or she immediately gets offers on accommodation in the place of destination or a special travel insurance policy.

Banking APIs can also work in the opposite direction: a bank can use an API to offer its products and services to the people who are not yet its customers. A third party can target new clients, giving them an opportunity to choose products from a bank with a more attractive offer than they currently have. This is especially relevant due to the recent developments in PSD 2 directive.

Currency Exchange and Investing

Another good option in online banking is a currency exchange system, for example Currency Cloud. Normally, one would need to set up a foreign currency account (and these are available mainly for a couple of the most popular currencies) and then make a transfer from the regular account to the foreign currency account, agreeing upon the exchange. It’s neither easy (the need of setting up special accounts), nor cheap (banks often charge for accounts, and their currency rates are much worse than in specialized services).

Wouldn’t it be better for customers to simply choose a currency, select the source of money for exchange and then set up a maximum price a client is willing to pay? All the rest would be transparent to the user, as it would be done automatically by the bank or by a third party. Even if the bank wouldn’t take much cut on it, it’s still a way to keep users in the bank’s transactional system and not let them use external services.

When a customer has more savings than an average client, it’s a good idea to let this person invest in different products other than regular deposits. It can be a traditional wealth management for high net worth individuals, with professional, dedicated personnel, but providing a full online view of assets, or it can be a self-service site, allowing investments in funds, bonds, stocks and alike for a small fee or even free of charge. Investors don’t have to sign agreements with third parties, visit several websites with a different look and feel—they get a one-stop access to all of their money. Companies like eToro and Alpari offer investment platforms ready to be incorporated by banks.

Online banking doesn’t have to be dull and limited. It can be attractive, yet powerful, easy to use, yet comprehensive. And it can be enhanced for a fraction of the time and money, because there are so many existing solutions on the fintech market — just buy and implement. Meanwhile, the transactional system shrunk down to basic bank operations is simply so last century. What really matters in 2016 is a full service: banks offering their own or external products and services in one place—your web browser or banking app. The more a client can get with a couple of clicks, the better for the bank.