In Retail banking most account flows are relatively easy, as usually there is only 1 account holder and in the rare case there are multiple account holders each account holder has full access rights to the account.

This contrary to business banking, where much more complex mandate rules are in place.

Unfortunately this simplicity in Retail banking, leaves quite some use cases for shared finance unsupported (or under supported). Very often it is assumed in retail banking that the different account holders of the same account have a high degree of trust between each other (e.g. a couple), but this is not always the case.
We can imagine multiple use cases where more complex models of authorization, mediation and follow-up are required between the different holders of an account.
A good user-friendly (easy to use) system to properly manage those relations and all associated account flows could provide significant added-value for many retail customers.

Let’s explore some use cases to better understand this gap:

• Parent-child relationship:

  • Most parents want to give maximum autonomy to their child to manage his/her money (so they can learn to deal with money), but at the same time want to protect their child from bad financial decisions and want to do some supervision. This means that on the account of the child (on which both the child and the parents have a mandate) it should be possible to define certain restrictions.

  • Specific niche-banks for young people, like GoHenry, Gimi, Greenlight, Osper or Rise provide solutions for this, but having to open an account at a specific niche-bank can be a bridge too far for many people.

• Divorced parents co-managing money for a child:

  • Often divorced parents with shared child custody have a shared account, on which both parents deposit money and with which all expenses associated to the child can be paid. This can avoid difficult discussions, if a large (unforeseen) expense is required in the week of parent A, for which parent B should also contribute.

  • The relation between those divorced parents can be sometimes quite tense, so providing services to keep track of all contributions and expenses made by each parent can relief a lot of this tension.

  • A Fintech app like Onward is exactly providing this service.

• Co-housing (with friends, family, colleagues…​):

  • Often in co-housing, there is also a shared account, with which certain common expenses are paid (like shared groceries or cleaning, maintenance and repair tasks to the common facilities).

  • This can be managed via a traditional shared account, but this can give a lot of costs (if every account holder has its own debit card) and complexity (e.g. for onboarding or offboarding co-housers from the account). Most groups therefore rely on group expense tools, which virtually track and split all expenses and allow to rebalance with a minimum of cash movements. E.g. tools like Splitwise, Tab, TriCount, Venmo, SettleUp, Splittr…​ offer excellent functionality for this. These tools can however also become messy, if not everybody is sufficiently disciplined to input all expenses (and usages) or if someone is not paying his or her share (in time).

  • Some Fintechs (e.g. Braid) also try to find a solution for this, by allowing to easily create dedicated pools of money, which can be spent together (with your pool).

• Couples with split finances:

  • The time of couples marrying and staying together forever is long gone. With about 1 in 2 marriages ending in divorce and even higher percentages for co-habitating couples, it is no surprise that couples are keen to keep part of their finances separate. But as soon you keep a part separate, it means also you need to make arrangements of which part you want to manage jointly.
    Especially in couples where one of the two earns considerably more than the other, this can lead to a lot of difficult discussions.

  • Also here applies the common phrase "Good agreements make good friends", but in the financial sector there are very few tools supporting people to manage this.

  • Fintechs like Zeta and Honeydue are providing solutions for this.

• Elderly:

  • In the same way that parents want to help and control finances of their children, this situation can also be needed for children helping their elderly parents.

  • This can have a variety of reasons, i.e. from parents losing their mental capacity (e.g. due to illness) to manage their finances, to children helping their parents with doing their banking digitally (as banks offer less and less services via their branch network), all the way to legal structures where parents and children co-manage finances, e.g. bare-owner usufruct constructions allowing to transfer already part of the parent’s wealth (and avoid succession taxes) to money on shared accounts, which is inherited by the children, when one of the parents dies.

  • Certain Fintechs offer a solution for this, like Sibstar for people living with dementia or solutions like Kalgera, EverSafe or Golden Financial Care for automatically identifying fraudulent or abnormal transactions (even if those are initiated by the person itself).

In all those examples, we can identify a number of common needs, i.e. creating collaborative financial products with following requirements:

• Easy and intuitive addition (onboarding) and removal (offboarding) of account holders

• Easy definition and management of access rules for each account holder

• Possibility for account holders to choose for a physical and/or virtual debit card, i.e. via a virtual debit card account holders can use certain online and P2P payment tools, without bearing the costs associated to physical cards.

• Definition of restrictions on payments (and other types of withdrawals), e.g. definition of a maximum amount per transaction, per week, per month…​ (per account holder), restrictions on sectors where money can be spent…​

• Possibility to add meta-data to transactions on the account, e.g. add category tags to a transaction, associate communications (explanations) to other account holders, link documents (e.g. expense notes) to a transaction…​

• Manage general communications between account holders, e.g. via a secure messaging box

• Workflows to manage certain money and communication flows between account holders, e.g.

  • Request a pre-approval of certain expenses to other account holders

  • Request an advance of money paid by other account holders (e.g. child asking an advance of money to his parents). This advance could be associated with a reimbursement plan, which is digitally signed by all parties. The tool can then also track if the reimbursement plan is respected by all parties.

  • Request to delay or cancel a recurring contribution of an account holder to other account holders (e.g. one of the co-parents requesting to postpone his/her monthly contribution to a co-managed account). The approval of the request can be granted with specific conditions, which can be digitally signed by both parties, giving an official proof of the arrangement made between the parties.

  • …​

• Extensive reporting and export possibilities on the shared accounts, i.e.

  • Possibility to report all contributions (credit movements) and made expenses (debit movements) of each account holder. Today the info of which account holder did a payment on a shared account is not easily identifiable.

  • Easy reporting of all agreements made via above workflows

  • Easy exporting of all data

All those features can be developed in a generic way, so that the same setup can actually support all above use cases. This could give a bank a unique competitive advantage.

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