FIs have complex, expensive and rigid IT environments and processes. They live in a poorly integrated batch world while their customers have moved on to a real time – always-on commerce model that they are challenged to support. If it were just as easy as appointing a Chief Innovation/Digital/Cool Dude Officer or establishing a Venture arm we wouldn’t still be where we are. Sadly, hard problems rarely have simple solutions. A recent Citigroup report has predicted a reduction in banking staff of 30% over the next decade. This quantifies the urgent pressures financial services firms are facing. We’ve heard this for years, but this time it is different. Why?
This time it’s different…
There are two drastic changes that make this cycle of disruption and innovation different from prior decades.
The customer is in charge. Customer expectations have leaped forward. A new generation of customers, and a few digital savvy older ones, don’t visit branches, fill out applications, fax documents, and wait 5-7 business days for anything. They expect an always-on digital experience that helps them to do what THEY want to do. They are not interested in YOUR product. In prior years, while the customer wanted a different experience, they didn’t really have any alternatives. Moving from one bank to another was very difficult and often resulted in little more than the color of their plastic changing.
Today, your customers have choices. IT firms, retailers, Telco’s, Fintechs and neo-banks are in the fray disrupting banks, siphoning off profitable customers and services, and filling the void between customer expectations and heritage bank products.
Fintech Competition. Fintech firms have raised $7B USD in January of this year alone. The venture capital market is voting that financial services is in need of disruption and customers are voting with their wallets. Firms such as Betterment, Moven, Lending Club and Stripe are disrupting customer acquisition, payments, wellness, investments and loans. Each of these fintechs have established themselves as formidable competition to any bank by innovating and optimizing the processes that customers care about most. This is being done through a counterintuitive change in business, technology, or model. That’s the bad news. That’s the bet your job news.
Fintech Collaboration. Fintechs provide FIs an opportunity to leapfrog traditional incremental development and deploy digital services better/faster/cheaper with wildly different economics. Chances are, in every strategic process you have today, there are dozens of well-funded Fintech firms focusing on disrupting that process and changing the economics. What happens if they join forces? Ondeck and Chase, Moven and TD are just two examples. Cooperation is enabling the internal disruption that will drive change within an organization, instead of waiting for the disruption to come externally.
The real opportunity is to combine the innovation and unconventional thinking of Fintechs with the reach and resources of traditional financial institutions. In recent research by Cubeyou, when Millennials are asked about relevance, Fintechs like Moven, Gobank and Simple top the list, while the same group rates Chase, American Express and USAA as tops for reach. Collaboration across these dimensions is the key to industry innovation.
A word of caution, the bureaucratic force is strong in FIs. The institutional temptation to either build it or kill it, is the graveyard of many great ideas.
The conservative posture of IT and Risk Management, the vendor hostile orientation of Strategic Sourcing and the Middle Management fear of failure, are a toxic trilogy to thwart real innovation. If you are not failing occasionally, you’re not innovating enough. If it takes longer to negotiate the contract and pick a vendor than it does to do the project, you’re not moving fast enough. If you find yourself falling back to a product orientation, you’re not being new enough. In the endless pursuit of better, faster, cheaper – you’ll need to change your behavior to get different results. FinTechs can help.
Want to hear more? Join us at Money 20/20 Europe on Thursday, April 6th, where we will be talking more in depth about FinTech collaboration.
Moven Research Reveals the Frustration Behind Americans’ Money Woes
It’s no secret Americans today are facing a challenging financial landscape and paying close attention to their finances is a priority moving into 2015, but money anxiety and limited resources have them looking for help in all the wrong places. New research from Moven, the first spending app and debit card that provides real-time behavioral feedback and instant receipts to help customers spend smarter, shows that 1 in 6 (17%) Americans are actually turning to the Internet or Google for financial advice. That number is even higher among millennials (ages 18-34), with 1 in 4 (24%) reporting they would seek out advice via Google or the Internet.
Moven commissioned accredited research firm YouGov to study the financial behavior of a representative sample of 1,178 American adults. The findings indicate that money anxiety is causing Americans to actively seek out financial information, but they lack the tools and resources needed to truly be successful. Given the upcoming holiday shopping season its likely many Americans will overspend in the coming months and Moven’s research suggests most will be unprepared for the inevitable shock once it’s time to pay the bills.
“For most people, sticking to a budget is nearly impossible because monthly expenses never stay the same and unexpected expenses can easily throw consumers off track,” said Alex Sion, President of Moven. “In reality, budgets are an outdated way of managing expenses and consumers would be better served finding resources that help them understand how fast they spend and where they are spending. With real-time feedback they can focus more on changing their behavior instead of tediously updating a budget,” he added.
Additional key findings from the research include:
Financial Wellness a Concern, But Tools are Sorely Lacking
- Financial wellness is a major concern moving into 2015: Half (50%) of Americans are planning to discuss financial wellness with their families in the next 12 months. This is significantly more than plan to discuss their physical health (46%), career/ the job market (34%), education (26%), or mental health (19%).
- Americans don’t think they have what they need to be financially successful in 2015: 1 in 5 (19%) Americans think they would keep a financial resolution in 2015 if they had better resources to do it. 1 in 6 (18%) think that if they had real-time feedback on their spending habits it would help them keep a financial New Year’s resolution.
Money Matters When It Comes to Love
- Talking financial wellness could save a romantic relationship: 1 in 4 (26%) of Americans said financial wellness caused the most stress in their relationships. In fact, it was listed as the number one stressor in romantic relationships across all age groups.This was at least doublethe amount of Americans that listed physical health (12%), their career (11%), mental health (10%) and their geographical location (8%) as number one.
Keeping Track is Too Much Work, Especially For Millennials
- Americans don’t take budgets seriously: A third of Americans (33%) that keep a budget found it frustrating just because they couldn’t stick to it. More than a quarter (26%) were frustrated because it was too stressful or overwhelming. And, in today’s digital age, a surprising 1 in 3 (36%) Americans are keeping track of their monthly expenses on a piece of paper.
- Americans would rather someone else do their work: Consumers know they can’t keep a budget on their own and are turning to other people or services to track their monthly expenses. Technology is becoming increasingly important in this regard, as almost a quarter of Americans (24%) are relying on services from their bank and 1 in 10 (10%) are relying on a personal finance app.
- Men are lazier than women at keeping budgets: Men and women are both equally terrible budgeters, 23 percent don’t keep a budget at all. Men that do keep a budget are more likely to be frustrated with it because they are lazier (22%) than women (19%). Men (11%) that keep budgets are much more likely to keep track of their expenses with a personal finance app than women (8%). More than 1 in 3 women (42%) that keep budgets are actually doing so on a piece of paper, compared to just 31 percent of men.
- Americans are obsessed with checking their bank accounts: Despite the fact they can’t stick to their budgets, Americans are trying to monitor their spending. Nearly a quarter (23%) of Americans check their spending accounts once a day or more. 1 in 4 women (24%) check their spending accounts once a day or more, compared to 1 in 5 (21%) of men.
- There’s no cure for millennials’ financial anxiety: 1 in 11 (19%) millennials check their spending accounts multiple times a day, more than any other age group, but a third of millennials (31%) don’t even keep a budget at all. They are most likely to benefit as technology evolves and provides resources beyond just budgeting services for money conscious consumers, yet just 1 in 6 (18%) has turned to a personal finance app to track their monthly expenses.
“Financial health, like physical health, is about understanding your current situation, behaviors and trajectory so that you can make changes to improve your ability to live your life and survive unexpected shocks,” said Sion. “The upcoming holiday season is a great time to step back and take stock of your finances and reflect on whether your daily habits and behaviors are empowering or endangering your long term money goals which is much more effective than trying to stick to a budget that’s destined to fail,” he added
Connect with us on Twitter @getMoven.
Moven commissioned accredited research agency YouGov Plc to poll the views of a representative sample of 1,178 U.S. adults. Fieldwork was undertaken between October 24-27, 2014. The figures have been weighted and are representative of all U.S. adults (aged 18+). The research was carried out online.
Today while presenting at Wired Money in the UK, I proudly announced the closing of Moven’s Series A Investment round.
Led by SBT Venture Capital, this $8m raise included Route 66 Ventures, Standard Bank, and a few new angels. We are excited to welcome each of them to the Moven family and thank them for their investment in our mission to reinvent banking.
We would also like to thank Anthemis Group, our Seed round lead who also chose to participate in this raise. Their appetite for continued funding is a strong vote of confidence that all of us at Moven deeply appreciate.
Finally, we would like to recognize the Santerre Group, Kevin Plank from Under Armour, our NY Angel investors, and Jim Pallotta from Raptor Group for their stellar support throughout our Seed round and initial product development. We certainly would not have made it this far without them.
As many of you know, Moven has been in launch phase for less than a year, only recently exiting our Beta invite process in March of 2014 and opening up our service to the public. In that brief time Moven has become one of the most watched new brands in the global banking sector. Our work has been cited by Wired, AT Kearney, American Banker, Accenture, Forrester, EFMA and many others as a potential model for the future of banking.
While many “neo-banking” competitors’ initial product launches required $10m to $300m to execute, we are proud to say that the Moven team was able to launch what Techcrunch described as a, “feature set (that) is notable, and in some cases even tops that of…other more modern mobile banking/payments apps” with only $4.5m in spend. With $8m more in capital to invest, we believe that we will continue to generate significant progress with effective, strategic use of that investment.
For now Moven’s objectives are clear. First is to invest in the product and create the defining benchmark for the ‘downloadable smart bank account’ category in the US. With this new funding Moven can now fully capitalize on the hundreds of thousands of prospects and emails built over the last few months. And we can continue to invest in ground-breaking features and tools that will redefine the banking experience for every one of our users.
Second, is to exclusively align with strategic partners in other parts of the world to integrate the Moven app with their basic banking experiences. We have always envisioned the disruptive change occurring in retail banking as a global phenomenon. We will now be moving forward with a number of international partnership agreements that will give us presence on three continents while creating new revenue opportunities. You’ll be hearing a lot more from us about these partnerships and launches in the coming months.
It’s hard to believe that it’s been only 18 months since our initial funding, but if our accomplishments to date have been any indication then the journey has only just begun. We believe that in short order millions of customers will be using our app each day to help them spend, save and live smarter.
Thank you for your incredible support thus far and remember to keep on Moven!
– Brett King
When it comes to renting or buying, having the right insights can make a huge difference to your financial health. At Moven, we’ve come up with a number of rules of thumb and key insights to help you make smarter financial decisions.
1. First, your monthly housing cost – rent/mortgage, utilities, maintenance – should be less than 1/3 of your income. Simply divide your annual income by 40 and use that amount as your maximum.
2. Second, consider buying a home only if you plan on keeping for at least 7 to 10 years. That’s about the a typical economic cycle; anything less and you risk losing your money to broker and bank fees.
3. Next, look for a property where it’s price to rent ratio is comparable to the neighborhood average. To find the price to rent ratio, simply divide the purchase price by the annual cost to rent the same property (or one like it).
4. If you live in a pricey city, try to keep your housing spend in line with your peers. Spending less than a third of your income on housing may be harder in bigger cities, but don’t let yourself become house rich and cash poor!
5. When buying a home, be conservative with your expectations of its future value. Think of your home as a way to protect rather than grow wealth. Remember that home prices don’t typically increase that much more than the rate of inflation.
6. Take advantage of the current low rates, but do so responsibly by putting 20% down and having 10% set aside. Buying a home often has many unforeseen expenses, so be sure to have a buffer.
Check out the info-graphic below for more details and be sure to join the conversation on Facebook and Twitter!
Moven is proud to announce the winner of our “Live Rich, Spend Smart” 2014 contest: Jill Kathan.
During the month of January Moven received submissions that resulted in thousands of shares and reached over 3 million people all over the U.S. about how they make smarter spending decisions to live rich each and every day. Many of the stories were inspiring, but one stood out the most.
Detroit is a city under siege. The recent financial crisis has had a devastating impact as auto manufacturers shuttered factories, banks foreclosed on homes, and the city even filed for bankruptcy.
Despite all this, it is still a city full of hope. There are many who still call it home and remain steadfast in their belief that Detroit will rise again. Among these is our winner, Jill Kathan.
A graduate of Michigan State, she served her city for seven years as an elementary school teacher. After marrying her sweetheart and having their first child, she chose to stay home with her daughter, Kelsey Anne. But that hasn’t kept her from volunteering at her daughter’s school whenever she can and keeping a strong network of friends and family around her.
Being a stay-at-home mom was part of Jill’s live rich and spend smart mentality. Switching from a dual to a single income household meant a tighter budget, but more time together as a family.
Jill and her husband met the challenge to live rich and spend smart in three ways.
Honoring the Future
Jill and her husband are always thinking about their future selves. Whether buying their first home, saving up for a dream car, or planning for retirement, every dollar was given a purpose. Together they have a clear set of long term goals that helps define how they spend day to day.
“When you plan, it’s easier to save,” she says. “We have a family budget and know what we’re going to spend and not spend. We have even started planning ahead for Christmas!”
Managing Money Hand in Hand
For any of their plans to succeed, Jill and her husband practice another spend smart, live rich principle: managing their money hand in hand. The two of them are in constant communication about their spending choices. With a clear vision of their shared future together, they almost never fight and find that working so closely together keeps their marriage strong.
“I am very communicative with my husband about money. Both of us always know what is going on with our money since we’re both equal partners in this,” Jill states.
Choosing Gratitude over Debt
The final piece of Jill’s approach to living rich and spending smart is to always choose gratitude over debt. Any budget, no matter how rich, always has its limits. And it’s always tempting to choose debt over making difficult choices. Jill and her husband have found that practicing gratitude for what they have, rather than obsessing over what they can’t afford has helped them maintain their financial health. They almost exclusively use debit cards and only buy what they can afford.
And now that her six-and-a-half year old daughter is old enough for an allowance, Jill is passing on her philosophies to her as well.
“Not only am I not living with debt, but I am teaching my daughter the importance of money. She knows she can’t have something if she doesn’t have the money for it in her piggy bank,” says Jill.
So join us in congratulating Jill and her family for living rich and spending smart. You’ll be hearing more about her and other contestants. We hope that they are an inspiration and help you reflect on the many ways that you can live rich and spend smart!
What are David Bach’s tips on how to live rich? Watch them here!
Join us and David Bach, 9 time New York Times best-selling author and financial expert, for our #SpendSmart Twitter chat on Tuesday 2/4!
Living rich does not mean mindless spending. 2014 is about getting back on track and making smart spending decisions! To wrap up our Live Rich, Spend Smart contest, we will be discussing with our winners and participants their stories about how to live rich and spend smart in 2014.
Chat participants will have the opportunity to win $50 and $100 in a Moven account, so be sure to chat with us on 2/4 at 2pm EST!
When: February 4, 2014
Time: 2:00pm EST
RSVP Required to Win Prizes
RSVP below to be eligible to win prizes.
Winners will be picked at random using random.org and will be announced during the party. You will receive a Direct Message requesting your contact and mailing information.
Chat with you all soon!
Moven is thrilled to announce we will be working with Carrie Birgbauer of NY Money Coach, an educator and certified holistic money coach! Carrie will be supporting our Live Spend and Spend Smart contest and providing money coaching consultations to our winners. Carrie is an accomplished money coach whose feedback and insights have been invaluable to Moven.
In a recent interview with Carrie, she shared her passion for financial wellness and how she’s mastered her practice over the years.
Carrie: I’ve been a certified money coach for 4 years and an educator for 17 years. I typically work with process-oriented professionals who want to master the art of personal finance as the path to fulfilling their deepest goals and desires. I work with individuals and couples, celebrities and everyday people, who want to create a healthy and sustainable relationship with money. Money coaching is particularly effective for people who want to increase their consciousness about money, have come into sudden money or are in transition: moving in, changing careers, getting married, getting divorced, or having a baby.
Carrie: Pay your credit cards off in full on the 30th of every month – this is essential for capturing and managing each month’s spending. How you relate with money is how you relate with life. A monthly budget is sustainable only if you include an average of your periodic (anticipated non-monthly) expenses.
Carrie: I live rich by practicing gratitude and seeing all of the gifts in my life. I tell my loved ones why I love and appreciate them. I share with my clients what a pleasure and honor it is to work with them and I take time to breathe deeply. I plan to spend smart with financial wellness and accountability tools like a cash tracking app, Moven and the Money Minder. I use a proactive planning method for my spending, saving and earning and then stay connected to my money on a daily basis to see how I’m doing. Forward planning is much more effective that rearview mirror accounting at the end of the month – this way there is time throughout the month and year to make any necessary changes.
Carrie Birgbauer, MA, CYI
Saving money has always been an important factor for maintaining your finances, irrespective of who you are and where you are. Saving more money is important than spending it. Improve your knowledge on finances and start saving more than what you have been saying till date. Make a plan as to how much you would want to save within the time you are going to retire.
What are the strategies you need to follow so that you can save more than the amount you spend every month?