The emergence of digital banking is creating new opportunities for institutions to rethink how they engage customers, and Movenbank represents one of the more ambitious examples of this trend. By combining mobile banking, NFC payments, social media data, branchless banking, and customer financial wellness into a single platform, the company aims to deliver a banking experience tailored to the digital lifestyles of modern consumers. While the model offers potential advantages in convenience and personalization, it also raises important questions about privacy, security, and the role of social data in shaping financial services.
From The Financial Review:
Imagine a bank with no branches that lives by the philosophy that the number of Facebook friends and Twitter followers you have will be critical to determining the quality of the services you receive.
This is a dream institution for those heavily into social networking and keen on giving more thought to managing their finances. The bank, known as Movenbank, is coming to Australia in the not-too-distant future.
It has strong Australian connections. One of the co-founders, Scott Bales, is the chief mobile officer, based in Singapore.
He says that if he worked at a traditional bank with branches he would be known as the head of retail banking and chief technology officer. But he is happy to break that mould.Movenbank will run on hand-held devices. It will take advantage of the latest payments technology called near field communications (NFC) which allows users to make instant payments by pointing their device at a “reader” at point of sale.
Movenbank was started with a blank sheet of paper by Brett King and Bales who are just about to complete a capital raising. The millions of dollars raised in that funding round will be used to set up the bank in the US, where it will be launched in the next few months. Being an electronic bank, its launch timetable is determined by the quality of the technology with which it can interact. The two cities with the most number of NFC readers are New York and San Francisco. London is the next most densely populated with NFC readers so it will be next cab off the rank in the first quarter of next year.
Bales says the Australian launch will follow later in 2013. In order to allow Movenbank to concentrate on what it does best, it will be launched in partnership with local banks that can handle all the back-office tasks, risk management and regulatory obligations.
One of the unusual features of Movenbank is that it will actively encourage its customers to be responsible managers of their finances. It will do this through a number of means but the primary tool is its “CRED” score which is a transparent scoring system that helps users to “save, spend and live smarter”.Bales says research done by the bank has shown that someone with more than 100 friends on Facebook is a lower identity risk. It is these sorts of statistics that will be fed into the Movenbank algorithm, which will assist in offering better quality services to customers.
Those who have participated in the Movenbank early research work, called the “Alpha stage”, have been asked to undertake the equivalent of personality tests, with the emphasis on their attitude to spending and saving money. The 5000 people around the world who have participated in this have been willing to give Movenbank access to their Facebook pages.
Bales says when the bank is up and running the quality of services offered to customers will depend on such things as whether or not you recommend the bank to others. But recommending the bank will only be one factor determining the value of the relationship with the customer.
This is an interesting and novel concept, one that introduces new elements, such as heavy reliance on social media and newer technologies such as NFC. These characteristics are likely to pique the interest of a wide variety of customers, particularly early adapters and those in younger demographics.
It will be interesting to see how the rollout unfolds over time, and how traditional customers take to this model. The current focus is on obtaining high-quality DDA accounts, from which there will be ample competition. Also, some, if not many, prospective customers may have privacy and security concerns about offering so much personal information to an online bank without long-established privacy policies and protocols.
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