With time, people are getting more cost-conscious and prefer tracking their account and credit card transactions. If you have a banking or fintech app with a strong user base and wish to help them by offering categorized data, then you can invest in a good transaction categorization api for hassle-free transaction categorization. It helps make it much easier to categorize all the transactions accurately. Besides, the best part about this tech is that you can enrich transactions with information your users expect in their fintech app. In this article, we will delve into categorization methodology and the benefits it can bring. So, keep reading.
What Do You Mean By Transaction Categorization?
Account or credit card transaction categorization is a systematic process of detecting and organizing expenditures to make it simple for users to understand where their funds have been allocated. Most banks and financial institutions have integrated various transaction categorization APIs in their apps to help customers in better financial management. While there are multiple transaction categorization methods, some common categories are bills, expenditures, debt payments, savings, etc.
Each category can also carry a massive number of micro categories to offer detailed information on every account transaction. For instance, in the main category, such as expenditure, you can find subcategories providing further details on fashion, cars, sports, and more. However, the primary objective here is to know what works better to track spending patterns and assist financial institutions in deciding where their customers are spending money. That, resultantly, allows financial institutions to provide tailored products to their customers.
Benefits of Transaction Categorization
There are a lot of benefits to categorizing credit card and account transactions, like:
- It can make the process of bank reconciliation easier.
- It can assist in monitoring expenditure patterns, making it simple to know a customer’s spending habits and devise a plan accordingly.
Besides, based on the total money customers spend on different items, banks can determine the best offers that customers love to go for. For instance, transaction categorization can help a bank know the customers who prefer to save money. Therefore, based on that information, the bank can suggest different ways of investing money in profitable solutions.
On the other hand, by providing customers with such personalized service, the bank can enhance customer confidence and experience.
How Is Transaction Categorization Important for End-Users?
With enhanced account transaction classification data, your app can offer end-users an easy-to-understand categorization of their total income and expenditure. They can easily retrieve the desired information and spot errors. Besides, having access to all the relevant transaction details will help them stay on top of their cash flow and make informed financial decisions.
Closing ThoughtsTransaction categorization can be an excellent option for a fintech company or a bank that wants to offer best-in-class services to its customers. Not only will it add great value to customers, but it can also be an effective way to build trust and brand loyalty. So, what are you waiting for? Get the best transaction categorization API and integrate it into your app today!