Is Fintech Getting It Wrong? Focus On Needs And Wants

A friend of mine, Alessandro Hatami, wrote an interesting piece on Sifted that I shared in my news yesterday. He claims that neo-banks like Monzo and Starling are not reinventing banking at all. They’re just modifying and improving it. Alessandro then goes on to cite the key things that banking should really focus upon:

There are three things banking customers fundamentally need — and are worth disrupting. Let us try to imagine what ‘transformation’ in these areas could look like in ‘The Ideal Neobank’:

  1. A Payment Account: Imagine a bank that allows you to seamlessly pay anyone, anywhere: be it your babysitter, your favourite retailer or a holiday home abroad. The bank takes care of everything and you can always be sure you will always get the fastest, cheapest, most secure solution possible.
  2. A Credit Line: Instead of an overdraft, personal loan, credit card, car finance or a mortgage you get a credit line. The bank knows you and will advance cash (with guarantees if required) as you need it. You make one payment a month — like a subscription — to pay for it.
  3. A Savings/Protection Tool: You have some excess capital and the bank enables you to buy any product in the market that allows you to protect and grow it. This would not only include savings accounts and investments but also pensions and insurance. And your bank would sell you any such product in the market that meets your needs — whether or not it’s their product or a third party’s.

I agree and disagree with his view. I agree that neobanks are not really disrupting core banking. For example, the average old bank only updates its mobile apps 14 times a year, if they even have an app, whilst challenger banks update 31 times a year.

Source: Optima Mobile Banking App Review 2020

But do releases measure it? Do neo-banks even do the right thing? Does Alessandro get it?

I’m not sure. I’ve written a huge amount of words about building a digital bank, but these musings made me go back to the whiteboard and start again. What would I do if I were launching a digital bank today?

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