Only 20% of European customers trust their bank to treat them fairly and honestly, but with a lack credible banking alternatives it doesn't actually seem to matter. As most customers see it, they can either have a bank account, or they can not have a bank account. Account switching legislation in the UK perpetuates the problem, Henry Ford style: “you can have an account with any provider you want, sir…..as long as it’s a bank”. Our new report, “Disrupting Finance: Digital Money Managers”, profiles a series of disruptors offering your customers a third way. Here’s why we think you should be worried:

1.       They offer aggregation. Digital money managers offer aggregation because they have to, of course, but in doing so they enable users to manage their finances independently of the firms they don’t trust. Users can pick and choose products from different providers then manage everything in one place – a sort of iTunes for financial services. There's clear disruptive potential here, particularly if an already proven price comparison site acquires a promising digital money manager, as we've already seen in the UK with MoneySuperMarket’s acquisition of OnTrees. 

2.       They offer insight. Not all digital money managers are read-only, Check in the US, recently acquired by Intuit, owner of Mint, supports transactions. But reading can be enough, if it’s a good read, to disrupt traditional banking providers. Instead of static balance and transaction history, firms like Money Dashboard and Hello Wallet help users quickly understand their safe to spend, cash flow projections and what to do next. This sort of thing quickly develops its own momentum. If its the digital money manager, not my bank, offering me advice, who I begin to trust, then that's where I spend my time. 

3.      They're optimized for mobile. Unlike their website only predeccesors, today’s digital money managers benefit from the discovery power of the app store. More than that, they benefit from a device that forces them to make money management very, very simple. Already digital money managers across Europe, the US and Australia are topping app store downloads in the free finance category, above transactional apps from many leading digital banks. 

Read our full report, "Disrupting Finance: Digital Money Managers", for our run on who the main players are, the threat they present, and how you can outsmart them. Digital money management is banks' opportunity to lose, but with continued inaction, or the wrong type of action, more customers may opt for a third way in banking: keep the bank account, lose the bank.