I’ve been using various online banking services for about ten years, and have rarely been impressed. While I’ve watched services like Flickr transform photo sharing, and YouTube transform video sharing, I’ve yet to see anyone make me smile, get excited, and get my juices flowing when it comes to, well, banking software. Hmm, you’re thinking. Stay with me.

Right now I use NatWest’s online banking service to access the details of my current account, and then Microsoft Money to look at my spending and create reports and understand exactly why I can’t afford a little place in the Hamptons. However, like most crude database applications, NatWest’s banking systems are giving me the data, rather than the analysis that would turn it into useful information.

To get that you can download all the transaction data, which in my case neatly auto-imports into Microsoft Money. I applaud the vendors for this neat bit of hand-shaking. Then you laboriously tag all your transactions categories (put on Chet Baker and pour a large whiskey, it numbs the pain). Once you’ve done this for a couple of months of transactions the software labels stuff automatically, so that for example your Sainsbury’s transactions come up as “Groceries” (welcome to the United States of Software.)

Here’s where it gets fun. Now instead of looking at a tedious bank statement, I can see a simple, friendly dashboard on my PC which tells me at a glance how much cash I’ve spent this month, how much my car has cost me, what I’ve spent on food, and so on. You can set a budget, generate reports that show how this month’s spending compares to last month’s, and generally torture your significant other with clear, easy-to-read summaries of exactly why spending the gross national product of Benin on vitamin supplements is a bad idea. After the scrotum-crunching tedium of the initial set-up, you can see what’s going on in your financial life in a few minutes with no fuss at all.

Bank cuts rates but mortgages go up

The rate cut would normally bring the cost of mortgages down but four of the big banks ignored it and increased charges

• What’s hurting you most as the consumer crunch bites?

• Bank of England walks a tightrope between inflation and recession

Related Internet Links

• Comment archive:
  Michael Parsons

However, this is only the start. Think of what could happen if, say, Apple or Google were to push their creativity into this area. Why can’t my bank statements come automatically labelled into categories, with a neat summary at the bottom of what I’ve spent on food, insurance, and so on? Via e-mail, every week? Or as an element in Outlook? Why can’t my bank MMS me when I try to make cash withdrawal that’s over my budget limit, with a little picture of the computer from 2001: A Space Odyssey and a message that says, “I’m sorry, Dave, but I can’t do that”?

I never cease to be amazed at the incredible speed, accuracy, and immediacy with which the financial system can siphon money out of my pocket. I walk into a shop, hand over my plastic and in 15 seconds a card is swiped, a PIN entered, a balance checked, and the transaction authorised. The branch retail systems update the company back-end systems to let it know a widget has been purchased and to get another ordered, and that tiny transaction triggers loads of events: Executive Information Systems record an increase in spending in the store and track it against other stores, note spending by category, and may even trigger an alert to Just-In-Time manufacturing systems and get them to order another widget.

That’s all very nice for the people trying to sell me stuff, but why can’t we apply the same ingenuity to my interests? Imagine an iPhone with a card reader and a barcode reader. You keep your debit card and financial records on the iPhone. When it comes to buying something you swipe it with your iPhone.

A cute furry panda comes on the screen and says, “Hi Michael, this widget costs £50. You only have £40 in your current account so if you buy it today you’ll get overdrawn, which will cost you £30. It’s also available online at Amazon.co.uk and Play.co.uk for only £30. Also you promised your partner you would spend £0 this week on widgets. What would you like to do, you impulsive devil you?”

I think about it for a few seconds, swear quietly, and delay gratification – by touching the Amazon.co.uk button, which creates a one-touch transaction and purchases the product online. I walk out the store and I’ve saved £50.

Imagine a bank statement which was presented in both numbers and rolling prose, customised to your preferences, rather than illegible codes and simply numbers alone: “Dear Michael, this month was a brutal one. You spent twice as much on food as last month, because you ate at 17 delightful restaurants with your dear friends. Those thieves at Virgin Media and Thames Water cost you a fortune. And you still don’t have a will or any life insurance. You earned absolutely no interest at all on your current account, alas.” Who wouldn’t want to curl up on the sofa and read that sort of bank statement?

The other element which financial software is missing is the wisdom of crowds. Banks have all our spending information - and you can’t tell me they don’t analyse it closely, just as retailers do when they note which colours of paint have suddenly become more popular, and adjust their supply chain accordingly. Why can’t they share that analysis with us to help us with our budgeting? So for example, when I’m at my PC buying life insurance, why can’t my bank look at my income and tell me, “Most people who earn what you earn buy this much insurance and pay this much for it.” Or, “Most people who earn what you earn only pay this much for a holiday.”

One of the problems here is that I’m much more interested in my personal finances – and in being consciously aware of what I’m spending – than my bank is. My bank wants me confused, uninformed, lacking in confidence and making expensive decisions badly, which must by why it sends me a printout from an old mainframe terminal system instead of information I can actually do something with.

All of these slightly daft ideas have one thing in common: that being slightly playful makes applications human, engaging, and fun, and therefore much easier to use. Drivers who have cars that presents their fuel consumption in the dashboard end up “playing” fuel consumption – trying to drive smoothly so that they can get a good “score” on the car’s read-out. We like to play. And because for so many people money is a very serious business, I think we should bring a more playful, personal feel to the software tools we use to handle money. Let me know if you’ve found any applications that bring a sense of humour to the dismal science of personal finance.

---

Michael Parsons, now Editorial Director, Consumer Media, for CNET Networks UK, spent five years working in Silicon Valley and worrying about technology. He can be reached at michael.parsons@cnet.com

Explore Personal Tech

• InGear