Software development is a simple affair, really. You identify a problem, and you write a software application that solves it. If you are lucky, you will be the first to solve the problem in this way. But even if others get there ahead of you, the opportunity remains for you to take ground, if the problem is big enough. And so it is with the problem of debt, and why debt management software may be ground worth taking for the innovative developer.
The problem of consumer debt across the globe is not trivial. Canada tops the list with households owing an average of 171% of their disposable income, known as the debt-to-income ratio (DTI). In Europe, Denmark ranks as the dubious leader in household debt, with citizens owing, on average, a staggering 265.11% of their disposable income. The situation repeats itself in North America, with Canadian citizens owing an average of 165% of their income. Experts generally agree that DTIs above 40% can make it difficult for borrowers to repay their loans.
The problem with debt is not limited to borrowers making payments as agreed. The impact of personal debt extends far beyond that. People who struggle to pay their debts report a greater incidence of health issues. The cost of unmanageable debt also takes a toll on marriages, with 80% of couples who divorce citing financial strain as a major contributing factor. The list goes on, but the true cost of debt is obviously more serious than what is shown on a monthly statement.
This all translates into opportunity for developers who can create debt-reduction software.
The Debt Management Software Boom
In the wake of rising personal debt, wary consumers are doing what they always do when they have a problem — they Google the solution. The search phrase “debt management software” returns more than 4 million results, and a search for “budgeting software” returns more than 24 million results. A good number of debtors, it seems, believe that somewhere there just might be a software package that can help them plan their way out of debt. And they would be right.
Mint, one of the most popular personal finance management software applications, is used by many as a tool to plan their way out of debt. Mint’s customer base grew to 1.5 million in just two years, and Mint was subsequently purchased by Intuit for $170 million.
Albeit not as popular as Mint, several other debt management software applications have emerged, with varying price points, features, and levels of market share. A few mobile app solutions are also available.
Popular Debt Management Software Features
A survey of software applications from the above links reveals many of the features users are looking for.
Use of Visuals
Most developers realize that the last thing someone wants to do when dealing with a debt problem is to try and make sense of a bunch of numbers. To make the software as non-intimidating as possible, popular programs make liberal use of colorful pie charts and graphs.
The innovative developer interested in offering something unique can incorporate a feature that allows the user to switch between numerical tables and graphic representations.
Users want to do more than plug in their numbers and see a 3-D representation of their debts. They want whatever software they use to provide easy solutions. Many programs do that by offering “what if” scenarios, which allow the user to try different payment strategies. Some go further and provide a number of pre-defined payment plans.
To improve the user experience, ambitious developers might consider making a greater number of proven strategies, along with greater personalization.
Budget? What budget? No one gets out of debt without having a budget. Packages that do not assist the users in the creation of a workable budget are doing a disservice to the customer. Developers would do well to incorporate a budgeting feature within their applications.
Track Credit Score
Mint provides an easy way for users to login to their account and access their credit score. No serious application should be without this feature. If there is anything that scares people in debt, it is foraging for their credit score. The easier they can access this crucial piece of information, the happier they will be.
Reminders and Alerts
A few of the applications on the market offer some form of alerts to notify the user of an approaching payment date. The truly innovative developer will incorporate a way to alert the user when their spending choices threaten their debt management plan. Not every application on the market has this capability.
Nearly all of the applications reviewed are capable of generating and printing reports, based on the information the user enters. Some reports contain only numerical data, while others include charts and graphs. Innovative developers will include the option of printing or emailing reports.
Mortgage and Loan Interest Calculators
Of course, users expect a debt management software application to calculate mortgage payoffs, interests paid, minimum payment payoff dates. But users are looking for more than a collection of individual calculators; they want powerful applications than can do much of the work for them.
Creative developers will make stand-alone tools easy to access, while hiding powerful math functions behind an intuitive interface.
Some Considerations for the Developer
Regardless of the bells and whistles a developer includes in their debt management application, the following fundamental aspects must always be considered.
Not only are more and more companies turning to cloud-based solutions for their business budgeting and planning, but consumers, too, and learning the advantages of subscription-based services, rather than downloadable packages that must be purchased.
The savvy developer will capitalize on the Software as a Service revolution and make their debt management solution a cloud-based program.
Designing an application to be subscription-based is only half the challenge. It must also look as good and function as well on the full range of mobile devices as on a desktop PC. According to SimilarWeb.com, top websites report that 56% of their consumer traffic originates on a mobile device. No developer worth their salt will ignore this reality.
A rash of security breaches affected some of the world’s largest institutions in recent years. In 2015 alone, 707 million records were hacked. A look at recent breaches will reveal the problem is far from over.
The development of any financial management software places a tremendous burden on the developer to protect the user’s personal information. The precarious financial situation of users with debt issues only compounds the need to protect their data. The last thing they need is for the program they use to manage their debt to expose them to identify theft or fraud. In many cases, no personally identifiable information or financial account information will be needed by a debt management program. For advanced programs, where private financial information may be processed, a no-compromise approach to security is necessary.
The use of 256-bit encryption is mandatory for transfer of sensitive data, but even that is not enough. Any program that allows users to input personally identifiable information, along with account information, must also protect the information while it is stored on the user’s device. Encrypting any sensitive data stored by the application on the user’s device may not be the de facto way most programs handle such data, but it should be.
How Ignite Can Help
The rise in personal debt means lucrative opportunities for fintechs and tech startups. If you want to succeed while others fail, you need a technology partner to help chart the course. That’s where Ignite can help. We operate six R&D development teams across Europe, enabling us to provide world-class solutions at offshore pricing. Our developers are experienced in a diverse range of technologies, from mobile app development to complete cloud-based solutions. Why not contact us today for a no-cost consultation?