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March 10, 2016

A game-changer?

New York-based neo-bank Moven has been widely heralded as a disruptive innovator which is changing the nature of banking. Robin Arnfield talks to Vincent Bahk, Moven’s Chief Customer Officer

By Verdict Staff

New York-based neo-bank Moven has been widely heralded as a disruptive innovator which is changing the nature of banking. Robin Arnfield talks to Vincent Bahk, Moven’s Chief Customer Officer

Founded in 2011 and launched commercially in March 2014, Moven offers a US fee-free FDIC-insured mobile checking account and debit MasterCard which are provided by its US banking partner, Weir, Kansas-based CBW Bank. It also offers real-time personal financial management (PFM) and budgeting/savings apps as part of its mission to encourage what it terms ‘financial wellness’.

"Moven isn’t your typical bank," Alex Sion, Moven’s president, wrote on his LinkedIn page. "We provide banking and financial services, and we work with banks and industry partners to do this. So you get the protection and security of depositing at a bank, but none of the frustrating baggage. We’re changing the definition of what a bank does and how it works with its customers. So, while we’re not set up like a typical bank, we’ll provide all the products, services, and features of a typical bank and will even create some much-needed innovations of our own."

Digital banking strategy

"We’re about connecting a bank to the moment (in time) that matters for the customer," says Bahk. Using Moven’s app, consumers can make decisions about spending and saving when they are at the point of sale.

"We believe banking products are on the road to commoditisation and becoming ‘utilities’ – just like the telephone dial-tone and the Internet," says Bahk. "Mobile has enabled us to play a role in our customers’ lives, instead of simply selling them a banking product. Transaction data, location data, social media, etc. all give us insights on how to address a true customer need in the moment."

Bahk says that what differentiates Moven is its ability to connect the customer experience layer directly to banking products. "Other providers, like traditional PFMs, are limited to being a referral engine, but today’s customer is smarter and knows that they are being sold to," he says. "Our engagement data tells the story that our customers are depending on us in their daily lives. We’re becoming something they rely on."

Bahk claims current digital banks are still not meeting the specific needs of millennials. "While digital banks are in the medium that millennials prefer, they are still bringing old rules and trying to apply them to a new behaviour," he says.

"The millennial mindset is thinking about money management, banking, savings, and planning for the future in a completely different way thanks to innovations of the sharing economy such as AirBnB and Uber. Similarly, millennials have different customer service expectations compared to previous generations."

Advice

"Moven’s key differentiator is ‘advice and guidance,’" says Ron Shevlin, Director of Research at US consultancy Cornerstone Advisors. "It has developed a number of PFM functions to give its customers real-time information on how they’re doing against their budget."

Moven works with conventional plastic card and mobile wallet transactions, giving consumers instant feedback via mobile alerts on their spending activity including real-time, categorised receipts and the colour-coded Spending Meter.

This helps users avoid over-spending by showing how much they are spending on different categories and how recent transactions compare to past activity. Moven uses three colours – red, yellow and green – to indicate a user’s financial health.

Moven app users can get a complete money management picture by linking and aggregating all their accounts with different banks through the app, Bahk says.

Partnerships

In addition to its US banking business, Moven is seeking to partner with banks in other countries, and has already teamed up with Canada’s TD and Westpac in New Zealand.

"If we partner with a bank, our first assumption is that they have their own products which we connect with," Bahk says. "In essence, we’re the customer engagement layer to our partners’ financial products."

In December 2014, TD signed an agreement with Moven for the exclusive Canadian rights to Moven’s PFM app, and is currently in pilot mode. In February 2015, Westpac New Zealand launched a new version of its digital banking platform incorporating Moven’s PFM tool.

"There are others banks in the pipeline, but we’re not at liberty to reveal their names yet," says Bahk.

"Offering a PFM app like TD is doing with Moven helps create stickiness for a bank," says Ed O’Brien, director of Mercator Advisory Group’s Banking Channels service.

In May 2015, Moven signed a services agreement with Accenture to develop digital banking solutions such as next-generation account opening, biometric authentication, and real-time marketing, which they will provide to banks globally.

"Accenture gives us immediate scale, so we can meet our clients’ needs," says Bahk.

"We have pursued global partners to not only distribute our platform but also strengthen our offering," says Bahk. "Since launching these partnerships (with TD and Westpac), we’ve created an infrastructure that is multi-currency, multi-lingual and on a distributed cloud system. This is proven to be a leading formula for a future-proof platform, something we wouldn’t get if we pursued only domestic partners."

Business modelBahk says Moven’s business model is SaaS (Software-as-a-Service) based. "We’ve structured our contracts to share risk and upside with our partners, but, fundamentally, we are an engagement platform that any financial institution, including banks in the US, can take advantage of."

Moven differentiates between its Direct to Consumer US banking customers and its PFM app users. "While we keep our numbers close, we can that we have tens of thousands of active users on our platform in the US who are direct customers with Moven accounts," says Bahk. "We also have hundreds of thousands of (Moven) app users, and, with our global partners, our usage will be in the millions."

Bahk stresses that Moven’s Direct to Consumer US banking business is "created specifically to be a live, working laboratory for the firm’s software platform. It’s enough to be a ‘real’ business and ‘practice what we preach,’ which is a key differentiator to any other FinTech firm out there," he says.

Enhancements"We’re always making enhancements to our digital offerings in order to take a customer-centric approach," says Bahk. One example is support for Moven’s PFM tools on iOS and Android-based wearables. "We have more to come in our product roadmap soon," Bahk tells CI.

In January 2016, Moven released a new version of its app which no longer requires passwords or fingerprint authentication for certain basic level transactions such as viewing balances, provided customers have enabled auto-login on the app. Once they have set up auto-login, customers use their mobile device as ID authentication. However, risk-based transactions such as fund transfers still require authentication through user names/passwords or fingerprint ID.

"We’ve taken an old paradigm of passwords and moved it to a mobile-first world of fingerprints and device ID where passwords are obsolete," says Bahk. "We will be taking the approach of auto login and fingerprint ID as we introduce new features within our app and our banking products."

During the first half of 2016, Moven will introduce its Impulse Savings feature which includes:

  • Prompts to ‘lock away savings’ when a user’s spending behaviour has placed them sufficiently in the green (below their average spending) that it makes sense to do so. "Moven gamifies that moment in time when you’re thinking about spending that cash that is burning a hole in your wallet, and turns it into a savings moment," the firm says;
  • The ability to set up a visual wish list of items a user wants to save for, as well as the option to curate these directly from a user’s board on visual social media services such as Pinterest, and
  • When users have reached a savings milestone, they access their savings by tapping the app interface three times to simulate ‘breaking the glass.’ This employs behavioural gamification to make users think before spending their hard-earned savings. If they proceed, their savings funds are immediately transferred into their Moven spending account for their desired purchase.

Moven will also launch a GPS-based Emergency Cash notification feature which tells users their funds are low as they enter their favourite or most frequented merchants.

Using its behavioural insights on a user’s typical spending habits at that location – for example, their average grocery bill – Moven sends the user an alert offering them a real-time overdraft with a transparent upfront fee, to bridge the gap between their typical spend and their current balance. When the user’s next direct deposit to their Moven account comes in, the emergency cash advance is settled.

FundingIn October 2015, Moven closed a $12m Series B Funding round led by Route 66 Ventures with investments from backers such as Anthemis Group, its original seed capital provider, and Atlas Asset Management. The new investment will be used for international expansion, enhancement of Moven’s consumer banking experience including new spending and credit products, and expanding its US technical team.

In July 2014, Moven completed its Series A Funding round led by SBT Venture Capital, raising $8m from investors such as Route 66 Ventures and Standard Bank.

Loan repaymentsIn January 2016, Moven announced partnerships with US loan refinancing providers Payoff and CommonBond to incentivise its customers to pay down their loans. CommonBond operates a low-cost student loan marketplace, while Payoff provides tools to help customers pay off credit card debt.

Moven’s customers who become Payoff Loan repayment members will receive a $100 credit to their Moven account, while those who become CommonBond members will receive a $200 credit to their Moven account and a 25 basis point discount off their monthly student loan repayment when they pay via Moven.

"As many Moven users have credit card and student loan debt, incentivising them to pay their balances through these app partnerships allows them to manage and improve their financial health via an increasingly seamless experience," Moven said.

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