The Hidden Cost of Convenience: New Study Exposes the Most Data-Hungry Personal Finance Apps

In the digital age, personal finance apps have become indispensable, offering convenience and efficiency. However, beneath their user-friendly interfaces lies a hidden appetite for personal data.

So, what’s more important? Convenience or privacy? These are the questions that inspired this latest study by the research team at Merchant Machine. It uncovered the number of personal data types users must consent to when signing up for the most personal finance apps, then listed them all to find the most (and least) data-hungry apps.

Here's a breakdown of the study results.

The hungriest personal finance apps

Trading and investment platform Robinhood is the hungriest app of all, according to the Merchant Machine research. This greedy piece of software gobbles up over 25 data segments from users, including information on their location, search history, financial info, and purchases.

The app from online shopping firm Klarna is almost as greedy. It eats 24 pieces of your personal data as soon as you sign up. Klarna knows your online habits, your user content history, and even information on your general health and fitness levels.

Third place belongs to a major player in the personal finance space: Paypal. The online payment provider tracks 23 different data segments.

Apps that don't care about your data

But not every personal finance app has an insatiable appetite for data. There are a handful of apps that know almost nothing about their users. For example, the online banking app GO2bank is only interested in two data segments.

And while Paypal collects over 20 data segments, its smaller rival, Paysend, collects only 2 segments.

If you want an easy way to invest in stocks without giving away every single piece of online information, then ditch your Robinhood trading account for TD Ameritrade; this online broker only wants 5 of your data segments, none of which include sensitive information or browsing history.

Banking apps that collect the most data

Fintech start-up Chime offers a range of banking services with no monthly fees or overdraft fees. Sounds great. But you will have to pay for the service with your data. The US banking app requires users to consent to hand over 23 pieces of information. (That's probably the same number of people who read the terms & conditions regarding Chime's data policy.)

Chase Bank is one of the biggest banks in the USA, and it has a massive appetite for its customer data. It collects over 20 different customer data segments, including usage data and diagnostics.

UK finance apps with a hunger for data

Monese and Virgin Money top the table for UK finance apps that want their customer data. Monese collects 18 segments, while the Virgin App analyzes 17 data segments.

Many of the big-name UK banks feature on the list, including Halifax, Natwest, and Bank of Scotland, which collects the fewest segments of all (11).

This table reveals a notable difference between UK and USA-based personal finance apps. While UK apps still have a noteworthy hunger for data, on average, they collect nowhere near as much customer information as their US counterparts.

The buy now, pay later apps

You can buy now and pay later thanks to a range of innovative fintech apps, including Klarna, Sezzle, Zip, and the aptly named Afterpay. But there's something that you'll need to give all of these financial providers up front: your data.

Every single buy now, pay later app featured in the study collects at least 10 segments of customer data, with Klarna (24) and Sezzle coming out on top (23). It just proves that there really is no such thing as free in today's digital economy. Remember, if an app doesn't ask for a fee upfront, then you're paying for that service with your data.

Most invasive investment apps

The Robinhood app takes data from its customers and keeps it all to itself.

And it's not the only investment app that wants to grab packets of customer data. There's a distinct pattern within this sector, with all the major players collecting 15 data segments or more. Some names you'll recognize include JP Morgan Mobile, eToro, Cash App, and Fidelity Investments.

Schwab Online is the only investment app which, relatively speaking, is not that interested in customer data. It only collects 11 segments, which is tiny compared to all the other investment apps out there.

Coupon and cashback apps

Coupon and cashback apps are great ways to pick up some cheap deals. But again, there's a price to pay if you want to get your hands on the latest discounts and offers. And once again, that price is your personal information.

Groupon, one of the biggest and most famous coupon companies, collects 21 segments of data. It shares the number one spot with GoodRX Prescription Saver and Ibotta, a North American mobile technology company offering real cash back on your everyday purchases.

Money management apps

A look at popular money management apps rounds off this latest study from Merchant Machine.

And while they're very different from the apps we've looked at so far, it's the same old story when it comes to data collection. Apps like Mint, Albert, Wise, and PocketGuard can help you manage your monthly budget and track your money better, but you'll pay for it in data. Sign up for any of these services, and you're handing over access to your location, browsing history, and other online habits.

Summary: The 21st Century Trade-off

The trade-off between sharing personal data and app convenience is very real.

As users, we provide data to apps in exchange for personalized services, seamless experiences, and free access. However, this exchange raises concerns about our privacy, data security, and how companies might exploit personal information.

Essentially, the convenience gained from apps comes at the potential cost of losing control over our personal data, which can be used for targeted advertising, influencing behavior, or, in worst-case scenarios, identity theft.

Users must navigate this balance, deciding how much convenience is worth the potential risks associated with data sharing. So how much is convenience worth in data terms? That's up for each of us to decide for ourselves.
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