What Is Shared Finance?
Shared finance is defined by Forrester Research as: “Any situation in which a person acts as an observer of, partner in, or proxy for another person's finances" (Forrester, 2021). The clearest examples that fit this definition are standard joint checking accounts and shared credit cards, which are extremely common and offered by most if not all financial institutions to their customers. However, in reality, shared finance spans many use cases beyond a typical married couple’s joint finances. Examples include: parent-child finances, financial co-parenting between separated or divorced individuals who share a child, management of accounts for elderly relatives by proxy, roommates pooling funds to share common bills such as rent and utilities, and more. Many of these financial relationships are less clear-cut, grant different levels of access to different users, and their duration may vary from months to years.
There is value to be found for both customers and financial services organizations in each of these use cases, but this evolving approach to money management also presents a variety of challenges for financial institutions.