By Dan West, Innovations Manager, FCB Inferno
Hello and welcome to this week’s Espresso of Innovation; the hottest news and strongest stories from the world of creativity and technology filtered into a quick shot of inspiration. This week we tell Wall Street to take note.
Flipping the world of finance on its head has been a much-debated topic of late. Beyond moving services online and mobile, traditional institutions have not made much headway into updating their offer to match or challenge the post-digital consumer’s expectations. Let’s look at some of the start-ups looking to change antiquated models and banks that are holding their own:
Chicago based Education Equity have re-examined the lending model. Their offering flexible interest rates for students based on projected future earnings rather than a fixed rate. So, if you walk away from university with a top job you will pay more than someone who flunks out.
How about real-time, personalised financial advice based on multiple data streams? Turkish bank Garanti takes their app iGarantito the next level to help customers save money, transfer money and make payments.
Ondot is also going user-centric with CardControl that gives consumers the option of when, where and how their payment cards are used. In addition, you can “lock” a card if it’s lost rather than having to call your bank. Bill-paying parents can even have a hand in their children’s spending, defining limits and where they can spend the card.
In the meantime Vodafone has launched M-Pesa in Romania – it’s first foray into Europe. While the West is still figuring out the mobile wallet, M-Pesa has achieved 17 million users across Kenya, Tanzania, South Africa, India and Afghanistan, with a simple, streamlined system.
Finally, nearly one third of Starbucks’ transactions come from the company’s prepaid card and accounted for about $2.5 billion in U.S. sales for the company last year. This doesn’t mean that the coffee company is going to replace your bank any day soon but it does have an enviable relationship with customers that banks can only dream of. Adding the fact that it is covering off two major banking functions – payment and storing money – means that banks should sit up and take notice.
Long ago, brand messaging moved from broadcast to dialogue, putting the consumer at the centre of everything. There is a significant demand for financial offers that deliver the same transparency and control as other products and services. If banks continue to believe they are too big to fail and digitizing without tuning in to evolving behaviours, they will soon find themselves toppling faster than they ever could have thought possible.