Back in 2009, I reflected on our innate habit of mentally earmarking money, noting:
“If it turned out that I wanted a laptop costing £1,200 and I had £700 in savings and £600 in my current account, I could technically afford that laptop, but I wouldn’t buy it because, in my head, I only had £700 in the allocated savings account.”
This behaviour mirrors the traditional ‘envelope system,’ where individuals physically divided cash into envelopes for specific expenses, ensuring disciplined spending.
Fast forward to 2025, and while cash has largely become a relic, our desire to compartmentalise finances persists. Digital banking has adapted, offering virtual equivalents to these envelopes. For instance, Monzo introduced “Pots,” allowing users to allocate funds for specific goals, while Starling Bank offers “Spaces” for similar purposes. Revolut provides “Vaults” and “Pockets,” enabling users to categorise and manage their money effectively.
However, alongside these advancements, we’ve witnessed an explosion of subscription-based services:
- Streaming Services: Netflix, Amazon Prime Video, Disney+, and perhaps that niche platform you trialled and forgot to cancel (hello, History Hit).
- Software Subscriptions: Adobe Creative Cloud, Microsoft 365, and various productivity tools.
- Lifestyle Boxes: Weekly deliveries of meal kits, razors, supplements, or even socks, because who doesn’t appreciate fresh socks monthly?
These recurring charges, often modest individually, can cumulatively strain our finances, especially when forgotten or underutilised. The convenience of “set it and forget it” often leads to the latter.
While digital banks have empowered users to segment their funds, managing the myriad of subscriptions remains challenging. Most banking apps display transactions chronologically, placing the onus on users to identify recurring payments. Some apps offer features to visualise upcoming direct debits, but proactive management tools remain limited.
To enhance user experience in this subscription-saturated era, banks could implement:
- Subscription Dashboards: A dedicated interface highlighting all active subscriptions, their monthly costs, and renewal dates, offering a clear view of recurring expenses.
- Smart Notifications: Alerts for impending renewals or price hikes, such as, “Heads up! Your monthly fee for ‘Obscure Streaming Service’ is increasing from £5 to £7 next week.”
- Simplified Cancellation: One-click options to terminate unwanted subscriptions directly from the banking app, streamlining the often cumbersome cancellation processes.
- AI-Powered Analysis: Tools that analyse usage patterns and suggest downgrades or cancellations, e.g., “We’ve noticed you haven’t logged into ‘Premium Meditation App’ in three months. Consider cancelling to save £10 /month?”
However, a significant challenge lies in the fragmented nature of these subscriptions. Some are direct debits, others are continuous payment authorities linked to cards, and many are managed through platforms like PayPal or the Apple App Store. This dispersion complicates holistic management.
Enter Variable Recurring Payments (VRPs), a feature of open banking that offers more control and transparency than existing payment alternatives. VRPs allow customers to set parameters for recurring payments, such as maximum amount and frequency, providing a more seamless and secure way to manage subscriptions.
While digital envelopes have evolved, so have our spending habits. Banks that acknowledge and adapt to the subscription economy’s nuances can empower users, ensuring our hard-earned money doesn’t silently seep away. Achieving this requires a combination of excellent user experience design and tight integration of open banking standards, allowing a comprehensive view of all our financial commitments. Until then, vigilance across multiple platforms remains essential to maintain financial well-being.
AI disclosure: AI supported background research, analysis of 2009 blog post, minor thematic development, and refining of narrative flow. Image generated using Dall-E.
All final article content, style, and opinions remain solely the author’s own.
John Gibbard 