This Christmas season, European customers are using cost-cutting methods and strategies as a result of the inflation bug.
In fact, a survey by Accenture in the U.K. revealed that 70% of respondents aim to reduce their holiday spending this year, while 49% said they were trying to reduce their spending on presents, 46% on eating out, and 35% on socializing and food and drink at home.
Neobanks like Bunq have started introducing budgeting features that let Europeans ring-fence money in several sub-accounts, for example, to assist customers to control their holiday spending.
To trim away everything that is not crucial enough for them to maintain, Niknam continued, “people should have tools to quickly determine what they’re spending their money on.”
In order to assist consumers to manage their money more efficiently, other digital-first challenger banks like Monzo, Revolut, and Starling also offer their own budgeting tools.
Similar to Bunq, these neobanks’ cost-cutting strategies rely on giving a predetermined budget to various spending categories to provide users more control over their spending and a clearer understanding of where their money is going.
For instance, Starling gave its current account clients virtual cards earlier this month to offer them more control over their spending.
Instead of the user’s primary account balance, each virtual card is associated with a “Saving Space” within the Starling app. Customers of Starling have the option to select which Space they use, enabling them to create distinct spending plans for things like travel and shopping. The virtual card denies a transaction rather than depleting the customer’s primary balance when one Space runs out of money.