« To simplify banking and remove or abstract unnecessary friction »

How the business model of Movenbank [1] is disrupting the retail banking model? Brett King: At Moven we started with trying to reimagine the bank account itself, based on the mobile phone &ndash; how would a smarter bank account function? What advantages would it give you from a context and interaction perspective? What problems could it solve? Then we tried to get rid of all the existing friction in servicing and managing customers to make it optimally efficient, getting rid of anything that didn't add direct value to the consumer. The easiest example of this removal of friction is that you don't need to go to a physical branch to open an account with us, and can be set up and ready to go with a Moven account in just 2-3 minutes (it takes around a week to get you your contactless sticker and debit card, however). The real disruption behind Moven, however, is our cost of acquisition and distribution, compared with a traditional retail bank. Even though we sit on top of a bank partner and processor who charge us for use of their platforms, our marginal cost of acquisition is still 90% lower than most retail banks, and our distribution costs are even lower than that on a scale basis. The biggest issues for traditional retail banks with a competitor like Moven is that once we are successful, it really begs the question whether the traditional distribution network based on branches is viable on an ongoing basis, when a competitor can run the same business at 5-10% of the typical cost base. Why is the CRED ecosystem an innovation? CRED and our CREDScore [2] TM has gone through a few iterations over the last couple of years. Initially, we started with the concept of a relationship and identity score, a replacement for existing loyalty programs, credit worthiness scores and identity all in one. But it was a little complex for customers to understand, so in our testing it became more of a personal metric for our customers around their financial health and wellness. Having said that, it also is designed to recognize the value that customers bring to us in respect to things like when they introduce friends to Moven, and when they save more and more money with us over time. So as a customer introduces friends that sign up with Moven, and as they start improving their financial health, saving more cash, we start to match their improvements by giving them lower fees, higher savings rates, lower interest rates on credit facilities, etc. This is directly linked into social media as well, as you are encouraged to share Moven with your friends on your social networks, and for that you receive benefits. Do you really think retail banks will disappear? Obviously retail banks will survive, but I do believe that generally there will be far less retail banking brands in 10-15 years, and there will be a lot less branches, and those that remain will look very different to today. The really interesting thing, however, is that banking is already starting to become distributed where the utility or functionality you need from the bank is embedded in a transaction, purchase or interaction in your daily life. Think of it this way &ndash; you don't buy a mortgage, a car loan, or a credit card from a bank &ndash; you actually buy a home, you buy a car or you go shopping and traveling. In this way, when you simplify banking and remove or abstract unnecessary friction, then banking becomes something real-time, embedded in your life when and where you need it. So who is best placed to sell us a car loan or a mortgage? Maybe not a bank. Sure there is a bank in the process somewhere, underwriting the risk on the loan and providing the credit, but the organization best suited to delivering that product is probably a card dealer or a realtor. Banking is set to just become part of our everyday life, enabling our life financially &ndash; not as a distinct, special service that requires us to stop our normal buying process of buying a home and asking the bank for permission first to see if we can afford it&hellip; Why retail bankers are hiding their head in the sand and what can they do to compete? Every business facing this level of disruption has pretty much responded in the same way. Borders and Barnes Noble failed to see the impact of Amazon to the business of buying books online, and with e-Books and the Kindle or iPad. Blockbuster refused to see the disruption that services like Netflix, Hulu [3] and even YouTube would have on their business. The same is true of the music store, Kodak film, the US Postal Service and many, many others. The thing is that these businesses are in the business of providing their product or service, not of adapting to changing consumer behavior. It takes a lot longer to change the direction of a business that is an incumbent with very traditional rules and processes like banks. In fact, banks think that the requirement of having a banking license, bank regulation and their physical distribution networks make it very hard for competitors like Moven to come along and compete. However, because of the sudden and rapid changes we're seeing in consumer behavior as it pertains to banking and payments, the banks are already well behind others like PayPal, Square, Moven, and Simple. Generally the problem is one of competing internally for budget with the guys who run the branch network, and secondly, trying to get the compliance and legal guys to accept that digital can be just as secure as a face-to-face interaction. Actually, there are some banks who show some promise here. The recent BNP Paribas branded "Hello" bank, UBank and Commonwealth Bank in Australia with Kaching, and the attempts by the like of OCBC in crowdsourcing customer engagement, or ASB Bank in New Zealand with their Social Media capability are some excellent examples of banks who have pulled their heads from the sand, so to speak [4] . 1 Movenbank has recently changed its name to Moven. 2 Taking into account an individual's traditional credit score in addition to a customer's use of digital payment channels, social connectivity and money management beliefs, CRED assesses risk as well as a customer's financial potential. Unlike a credit score, CRED is designed to be a sort of financial health or wellness score, like a calorie counter on one&rsquo;s phone. 3 Netflix is one of the world&rsquo;s leading Internet television networks ; Hulu is an online video service that offers shows, clips and movies from numerous content companies and allows everyone to easily share videos with their friends or users. Ed. note. 4 To learn more, also read the article written by Jim Marous : http://jimmarous.blogspot.fr/2013/02/moven-from-mobile-banking-to-mobile-money.html. Ed. note.

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For a smarter bank

« To simplify banking and remove or abstract unnecessary friction »

Brett King’s position as the CEO and founder of Moven, named « Financial Innovator of the Year 2012 », gives him all legitimacy to express his opinion on innovation. His strategy does not focus on the underlying products, but on the utility of banking and the utility of a consumer's money.

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