[Photo:  Toronto Financial District - George Socka / wikimedia commons]

Toronto-Dominion Bank did not set out to change consumer habits when it offered its TD MySpend app in April. Canada’s 2nd-largest bank just wanted to offer more information to customers who use their phones to check account balances. A transaction-tracking app using red, yellow and green messages to warn account holders when they are paying out more or less than usual has resulted in some users spending less, a potentially powerful new weapon in the battle for customers.

But its ease of use has caught on. Customers don’t have to make up a budget to start using the app and it sends notices immediately with each purchase showing them whether they are spending more or less each month in categories such as dining out, entertainment and travel.

"The real-time nature encourages customers to change their behavior toward their financial goals," said Rizwan Khalfan, chief digital officer at TD Bank. "We were not expecting this."

About 750,000, or 20%, of TD's 3.5 million mobile banking customers in Canada have downloaded the TD MySpend app since April. Of those, 30% were using it at least twice a month and, on average, reducing their spending by 4% to 8 %. This means that about 6% of TD's mobile banking customers have been using TD MySpend and spending less.

Rizwan said the bank plans to put more marketing muscle behind the app as it learns how initial customers are using it.

The success of new apps is also vital to bankers who fear technology companies will offer better tools to win customers and snag more of the fees and marketing information that come with handling payments.

TD MySpend combines spending from different deposit and credit card accounts only at TD Bank. Khalfan said the bank is considering how it might safely bring transaction details from accounts outside of TD into the app. Doing so would require contracts and technical agreements with rival banks.

Here's how TD Bank in Canada pitches its app:  The Pitch

https://www.tdcanadatrust.com/products-services/banking/electronic-banking/mobile/tdmyspend.jsp