Understanding Transaction Categorization API in Banking

Understanding Transaction Categorization API in Banking


The banking sector is evolving at a rapid pace in recent times. Banks are introducing more features and solutions to support customers and offer them better values. One of the best ways to enhance customer experiences in the banking sector is to opt for transaction categorization API. If you are looking for reliable categorization, Genify can help.

Wondering what transaction categorization is? Continue reading to know everything about it.

A Quick Overview of Transaction Categorization

Transaction categorization is a process in which the purpose of bank account transactions is identified. In other words, it is the identification and organization of savings and expenditures. The categorization is done based on transaction amount, transaction description, contextual metadata, and date.

How does Transaction Categorization work?

Every time there is a transaction of money between two entities, transaction data is generated. This data usually has the date and description and amount of the transaction. However, it also consists of a lot of clutter. The transaction data is categorized to gain a clear understanding of the context and purpose. Then similar transactions are grouped into particular categories. The core aim is to get an idea of the spending habits and patterns of the customers.

Common Ways to Categorize Transactions

There are several ways to categorize transactions. The most common macro-categories are listed below.

  • Bills:This category may include all the bills that are paid every month. A few examples are utility bills, phone bills, and more.
  • Expenditure: It includes everything customers spend money on, like clothes and groceries.
  • Debt Payments: This category includes all the payments towards debts like student loans, home loans, car loans, or credit card balances.
  • Savings: It includes the savings of the customers in the form of funds and deposits.

A point to note here is that each of the macro categories can consist of several micro categories. It can provide even more detailed insights relating to the account transactions.

Benefits of Transaction Categorization

Allows the Delivery Tailored Services

Transaction categorization allows the banks to monitor spending patterns and understand the spending habits of customers. It provides an exact idea of how customers spend their money on different items throughout the year. As a result, it becomes easy for financial institutions to determine the best offers for their customer base. They can deliver tailored services to ensure maximum benefits for the customers.

Improves Customer Experience

To remain competitive, banking institutions look for ways to deliver the best possible experiences to customers. Transaction categorization can be an ideal option. As it enables offering custom services, it can improve customer experience significantly. Moreover, it can also increase the confidence and trust of customers in financial institutions, thereby building customer loyalty.


Want to cater to the needs of your banking customers better? If yes, choosing transaction categorization can be an excellent idea. It ensures accurate interpretation and handling of each of the transactions. Are you in search of a transaction categorization API solution? Look no further than Genify. React out to the professional experts and discuss your unique requirements.


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