By Gareth Vaughan
Moven's mobile money management tools will help Westpac give its Generation Y customers the level of information and detail about their money, spending and savings they're demanding from banks, the New York-based start up's founder and CEO says.
Moven's Brett King, in Auckland for the announcement of his company's four-year exclusive New Zealand partnership with Westpac, said customers, especially younger ones, are now more demanding than they used to be about their expectations of what a bank should do for them.
"The millennials (Generation Y), who are obviously a key target market for growth of revenue, are probably the least aware of their financial health of the last three generations," King said.
"You would have been better off in the 1960s with a passbook walking into a bank than you are today with a credit card or a debit card. And some would argue that that's by design, that a credit card or a debit card doesn't give you a lot of information and so the imperative that banks have had is (for customers) to spend, and we've given you rewards so you spend more."
He points out all a customer can get from a credit or debit card at the point of sale is a yes or no, not even an account balance.
"I think with millennials they're much more focused on savings. And so their expectations of a bank, maybe it's a little altruistic, (are) a bank providing them tools that can help them manage their money. (This) becomes a primary differentiator and concern for them. So we see the bank account getting smarter and providing you more insights as being a key component of the platform of banking, and particularly the deposit account," said King.
"Within a short period of time you'll be able to download your bank account to your phone, and with technologies like host card emulation, tokenisation, that's more achievable than ever before. So once you can do that, just download the app to a phone instead of walking into a branch and signing a piece of paper, how does that change the nature of the way you think about your day to day banking experience?"
'A permissions platform'
King said he sees mobile banking applications becoming a "permissions platform" for the bank to get permission from customers to send them more information, advice and offers.
"If you walked into a car dealership, maybe seven or eight minutes after you've walked in, that's the time to send you a pre-approved car financing deal. That's not an app, it's something that's streamed to you based on permissions around your relationship. That's where we see the future of engagement and revenue, very much built on the fact the app is getting you on the phone to be the primary financial relationship rather than just an app you use for day to day banking," said King.
He also said Moven was targeting the 70% to 80% of the population that don't budget themselves, but want more control over their spending.
"The gap is those that aren't too lazy to budget, but just don't have the inclination to."
Although saying he wants Moven to be the equivalent of the Kindle or iTunes for banking, Moven aims to work in partnership with banks, as it's doing with Westpac, rather than replace them.
"The challenge with going the replacement route is in each market you need some sort of licence or charter, you've got unique regulations, all of those things require local knowledge. And then on top of that you've got capital adequacy issues around deposit taking, which make it quite expensive. Really for a start up there's no way you could have a multi country strategy like that without hundreds of millions of dollars of investment. So for us this was an effective way, and if it's successful we make money out of it as well," King said.
"We're extremely lean. We've got about 20 people in the business. The fact that we've produced something a bank of Westpac's ilk is interested in investing in is a testament to the agility of that team," added King.
"And we don't have to worry about customer acquisition in New Zealand now."
This story was first published in our email for paying subscribers. See here for more details and how to subscribe.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.