How Varo created a smarter banking experience

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Instead of manually tracking expenses and stressing over balances, imagine a tool that does that work for you. A smarter solution that organizes, tracks, and alerts you on your monthly spending and savings, helping you stay on course without the mental strain. That’s what we envisioned when creating Smart Ledger, Varo’s newest feature contributing to a smarter banking experience.

We sat down with Dante Alvarado-Leon, Sr. Product Manager of Digital Banking at Varo to better understand what went into the creation of this feature.

Challenge we saw

Living paycheck to paycheck is a reality for many, which makes managing money a big task. Making sure your income covers all your needs every month is just the start. Many must watch every dollar to avoid overspending and ensure there's enough set aside for bills when they're due (and ideally, saving a bit for the future). But keeping track of it all, especially by yourself, can be overwhelming. We identified the need for a tool that makes monitoring your finances simpler, less time-consuming, and automates the process. This led us to creating Smart Ledger.

Learnings from customers prior to creation

In shaping the path for Smart Ledger, we dove deep into the minds and habits of our users. Not once, but twice. Our goal? To synchronize our development with the mental models our customers form when managing their finances. Here's a peek at what we uncovered:

Concept Validation: Insights That Resonate

Our initial hurdle was deciphering which type of insights would resonate closer with our users - localized insights into individual accounts or a more holistic, global view across multiple accounts. Additionally, understanding the natural pathways our users take to review their monthly expenditures was crucial in pinpointing the optimal launchpad for Smart Ledger.

Feedback Frenzy

The customer feedback was enlightening, to say the least. Although there wasn't a loud clamor for a global ledger, the positive reception towards the idea validated its potential. 

Here are some heartening snippets¹:

• "I love this! If I knew what bank you were, I’d sign up for an account now."

• "I absolutely love this feature, and I really wish that my bank offered that because I am all about doing my budget right now and seeing where I can cut back so this feature would be incredibly helpful for me."

• "Overall, I feel like this feature would be extremely helpful. It was easy to use. I feel like I would use this on a weekly basis."

When quizzed about uniqueness and helpfulness, our feature scored high, proving we were on the right track.

Deciding on Transaction Categories

When labeling and categorizing transactions, the devil often lurks in the details. Our focus was on understanding the intuitive categories users naturally gravitate towards for their financial tracking.

Diving into the semantics, we explored how terms resonated with our users. From Income and Spending to Inflows and Outflows, each label conjured different levels of clarity and preference among our users:

Income and Spending: This traditional term hit a sweet spot for its professionalism and simplicity.

Money In and Money Out: Appreciated for its simplicity, intuitive appeal, and precise descriptiveness.

Incoming and Outgoing: Another traditional term that users felt aptly described their financial movements.

Inflows and Outflows: Some users found this less intuitive and slightly confusing.

Deposits and Withdrawals: These time-honored terms still held sway for a segment of our base, esteemed for their clarity.

Ultimately, we decided on the labels Money In and Money Out for Varo’s new feature. This choice not only resonated broadly across our diverse customer base, but also shaped the user-friendly design and feature implementation of our Smart Ledger, making personal finance more accessible and understandable for our users.

What does success look like for this feature?

Success for Smart Ledger is envisioned as the transformation of the Varo app into a comprehensive hub where banking meets intelligent money management seamlessly— not as an add-on, but as an integral part of the banking experience. This is what every bank should strive to provide.

We aim for Smart Ledger to be the cornerstone of continuous engagement, where users regularly interact with the tool to manage their income and expenses efficiently. By incorporating advanced features into our roadmap, our goal is to exceed traditional banking expectations. We hope that the unique differentiation of our new Smart Ledger feature will help our customers become more confident in managing their daily finances.

Our approach/guiding principles

Echoing Tommy, one of our Product Marketing Managers, Smart Ledger is envisioned as a transformational tool that simplifies, enlightens, and empowers users in their financial journey.

Simplified Visualization: Finally, an efficient alternative to spreadsheets and handwritten notes! Smart Ledger offers a seamless, all-encompassing view of your finances, aggregating income and expenditures in a coherent, easy-to-navigate interface within the Varo app. This platform is designed to keep everything in check, so you're always informed.

Enlightening Details: With the ability to break down financial data by categories automatically, users gain access to insightful analytics about their spending patterns. Smart Ledger acts as a financial microscope, revealing the fine details of where money flows each month.

Empowering Strategies: Beyond merely presenting information, Smart Ledger equips users with personalized financial strategies. These tailored tips aim to steer budgetary habits towards more informed, deliberate decisions, enabling users to maximize savings and enhance their fiscal health.

Smart Ledger is more than a feature; it’s a commitment to transforming the financial landscape by making budgeting simpler, insights clearer, and financial goals more attainable for everyone.

Process of designing main features

In designing Smart Ledger and other main features within our app, we embark on a meticulous and inclusive development journey that puts our users' needs at the forefront. Below is a step-by-step overview of our approach, ensuring that our products not only meet, but exceed user expectations.

Discovery: Our process begins with a deep dive into understanding what our users truly need and the challenges they face with managing their finances. This initial step is crucial for setting the direction of our product development.

Voice of the Customer Collaboration: Next, we closely collaborate with our Voice of the Customer team to sift through data points such as support calls, contact volumes, and user account activities. This rich vein of information helps us pinpoint opportunities to enhance the user experience dramatically.

Design and UX Research: Armed with insights, our design and UX research teams come together to craft conceptual wireframes. This collaborative effort is about translating our understanding of user needs into tangible designs that can be tested and iterated upon.

User Testing and Feedback Integration: With prototypes in hand, we conducted rigorous user testing to gather feedback. This feedback was instrumental in refining our designs, ensuring they accurately addressed user needs and expectations.

Finalization and Compliance Review: Once we've incorporated user feedback, our final designs undergo a thorough review by our copywriting and compliance teams. This step ensures that our features are not only user-friendly but also adhere to necessary regulatory standards.

Engineering Collaboration: Bringing our designs to life requires the expertise of our Banking engineering team. Their technical prowess is key to implementing the solutions we've designed, making our visions a reality.

Internal Testing and Quality Assurance: Before we introduce our features to the world, we rally our QA team, engineers, designers, and employees for an intensive internal testing phase. This critical step helped us identify and rectify any defects or bugs, ensuring a smooth and exemplary user experience.

Iteration Based on Customer Feedback: Our work doesn’t stop at launch, however. We remain committed to refining and enhancing our features based on ongoing customer feedback. This iterative process is central to our product development ethos, embodying our dedication to delivering solutions that genuinely resonate with our users.

Throughout every step of this process, our guiding principle remains the same: to provide our users with tools that make managing their finances straightforward, insightful, and empowering.

Ease of onboarding new customers

In our effort to make financial management as seamless and insightful as possible, we've taken deliberate steps to ensure that new customers experience the full potential of the Varo app from the very beginning. Central to this approach is the integration of the Money Out page directly within the Varo Bank account details page.

Immediate Access to Powerful Financial Insights: This strategic integration means that as soon as new customers fund their card and commence transactions, they start receiving immediate benefits. Every settled transaction is automatically categorized and reflected in the Money Out charts, providing a transparent and comprehensive view of their total spend amounts. This instant access to detailed spending insights from day one not only enhances the customer experience but also empowers our users with the knowledge to make informed financial decisions.

Streamlining Financial Management: Our goal is to eliminate the learning curve often associated with new financial tools. By embedding the Money Out feature within the familiar environment of the account details page, we ensure that new customers don’t need to navigate through multiple pages or set up additional features to start managing their finances effectively. This integration streamlines the process, making it intuitive for users to track their spending and income without additional effort.

Fostering Financial Awareness from the Start: The immediate categorization and visualization of transactions serve as a foundation for developing healthy financial habits. New customers are encouraged to engage with their spending and income data actively, fostering a deeper understanding of their financial behaviors. This early involvement lays the groundwork for ongoing financial awareness, setting users on the path to achieving their financial goals.

In essence, by making it incredibly easy for new customers to onboard and engage with their financial data through the Money Out feature, we're not just providing a tool; we're offering a path to enhanced financial literacy and empowerment from the moment they join the Varo community.

Groundwork Smart Ledger lays for future innovations

The introduction of Smart Ledger sets the stage for a future where Varo leads with innovation, transforming how users interact with their finances.

Broadening Smart Insights: In the future, we hope to extend Smart Ledger's capabilities to other Varo accounts, like Varo Believe and Savings, ensuring that users benefit from comprehensive insights across their financial spectrum.

Refining Transaction Understanding: We will be able to enhance our transaction enrichment to identify and categorize a wider array of transactions, including direct deposits and recurring transactions, providing users with more nuanced financial insights.

Connecting Smart Ledger to Improved Banking Habits: The insights gained from Smart Ledger will encourage financial health by incentivizing users to increase their Varo banking activity, with increased benefits for those with healthy spending habits.

Design Component Reusability: The design elements created for Smart Ledger, from tags to icons, are envisioned as versatile tools for future development across Varo’s platform, ensuring a seamless user experience and faster innovation going forward.

Smart Ledger isn’t just a feature; it’s a strategic move towards a more insightful, integrated, and user-friendly banking future for all Varo customers.

The results & what we hope to learn from customer usage

As we introduce Smart Ledger and its expansive capabilities to the Bank Account for all Varo customers, we're eagerly looking forward to the outcomes this integration brings. 

Our primary goal is for our customers to experience a noticeable improvement in their financial health, evidenced by increased savings, more deposits, and a deepened engagement with Varo. Additionally, a crucial aspect we're focusing on is our customers' confidence and security in managing their finances. Through observing customer interactions and gathering feedback, we hope to gain insights into how Smart Ledger impacts both the tangible and emotional aspects of financial management. 

These learnings will guide us in continually refining our offerings, ensuring Varo remains a key player in enhancing financial wellness and empowerment for our users.

We invite you to check it out today and let us know what you think!

Get started today or click to learn more about our Smarter Bank Account.

^{1 Quotes were from real prospective customers who reviewed Smart Ledger capabilities and offered feedback. Participants were compensated for their real thoughts and opinions.}