Automatic categorisation is indeed a really nice feature set.
Not having to manually categorise the payments is good.
But in day-to-day scenarios, there are a lot of miscellaneous ways where the system might not be able to categorise the payment correctly.
For example- I set out to buy a packet of Tea Leaves, but the nearby kiraana store is not accepting UPI payments currently. So, I find someone, borrow cash from him, and send him the equivalent UPI payment. An automated detection might count this tranx simply as a “fund transfer” but contextually, they were in expenses/utility/shopping categories instead.
Automated detection will lack context if transactions are not done very formally. However, in day to day uses, there are many scenarios in which transactions are made loosely.
So my suggestion was to perhaps have a manual switch alongside automated categorisation wherein users can have a fair bit of control on how they want to label a particular txn based on the context it fits.
Or more so, customisable spending categories that a more savvy user can manually edit.
Not seen this feature in any payments app I have used yet. But this feels like a really nice utility to have.