Moven: From Mobile Banking to Mobile Money

February is definitely a pivotal month for the start-up previously known as Movenbank, having changed it's name to Moven, winning the best of show honors at Finovate Europe and gearing up for a February 25 closed beta launch of its mobile-optimized financial services application. 

Founded by Bank 3.0 author Brett King, with $2.4 million in seed funding, Moven is the latest but not the last in a plethora of unique banking alternatives including Simple™, GoBank™ and Bluebird™.

So what sets Moven apart from not only traditional banking organizations, but also the less traditional financial intermediaries that are entering the banking battlefield? 

First of all, Moven is not a bank. Similar to Simple, while not having a banking charter, Moven provides a unique customer experience interface with a traditional banking organization working in the background (with banking licenses, FDIC insurance, etc.). The focus of Moven from the beginning of development has been to 'help customers spend, save and live smarter' using mobile technology.

According to Brett King, "With Moven, we're not talking about downsizing an Internet banking portal onto a mobile screen or downloading a debit card onto a mobile wallet. Instead, we are creating an entirely new way of thinking about a bank account, giving the customer mobile insight and control every time they make a decision that could impact their financial health."

Not Mobile Banking . . . Mobile Money Management

         Moven PayPass Sticker

It is the goal of Moven to leverage the power of the smartphone as the primary payment device and to provide immediate feedback with every spending decision. As a customer pays at the cash register using their contactless MasterCard PayPass sticker on the back of their phone, they will get real-time feedback on how the purchase impacts their financial health right on their phone's screen. 

According to King, while initial customers will have the option to receive a plastic card with a magnetic stripe for times when the tap-to-pay option is not available and for ATM withdrawals, the ultimate goal of Moven is to have a cardless, branchless experience. 

One of the tools that is being used to assist customers is Moven's personal financial management (PFM) interface called MoneyPulse™ which will analyze spending behavior and provide visual cues (green, yellow and red indicators) to let customers know how they are doing compared to past behaviors. 

Moven MoneyPulse™

While MoneyPulse looks at how a customer is doing from an individual transaction perspective, MoneyPath™ charts a customer's spending over a month's time to allow the customer to understand spending patterns. According to King, "Moven will allow customers to see how much they've spent at a certain location over a specific period. For instance, one scenario would let the customer know that they've spent say $230 at Starbucks during the month, allowing them to identify an unconscious habit that's hurting their savings patterns. The power of mobile allows us to provide scalable, real-time personal financial management."

Moven MoneyPath™

A unique feature from Moven integrates the MoneyPath financial timeline with a customer's Facebook social timeline allowing a customer to see the impact their social life has on their spending habits . . . essentially linking a purchase or spending decision with a check-in or status update.

In addition, there will be real time categorization and gamification around spending behavior. According to King, "The 'cool factor' is the ability to create immediate financial awareness ("Crap, I didn't know I spent that much in local bars or on coffee!") and then gamifying behavior to encourage saving and other positive behaviors".

Moven Budget Categorization

Moven Geo-location Receipt

Real-Time Budget Monitoring

So how do all of these capabilities work together from a customer perspective? Moven just released a 3 minute video to show how MoneyPulse, MoneyPath and some of the other features work. What can be seen from the video is how much emphasis Moven places on immediate feedback to financial decisions. It is clear that this form of feedback would not be possible in either a check or card environment

Engaging Without Being Intrusive

Moven's mission is to leverage mobile technology to continually encourage customers to be more aware and responsible with their financial behavior without being too judgmental or intrusive. The Moven team has a psychologist, behavior specialist, user experience specialist, designers and experienced banking industry professionals on staff. This combination is behind the unique skill set that Moven believes is needed to develop tools and provide ongoing insight into better personal money management.

Financial education is extended beyond the mobile applications, with helpful hints provided regularly on the Moven blog. Beyond announcements around the future introduction of Moven, there are musings regarding savings, retirement, budgeting, credit use, etc. which all reinforce the Moven brand.

One of Moven's most unique engagement tools is their CREDscore®. 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 your phone – a score that goes up when a customer gets better at saving or managing their money.

"CRED goes beyond just a credit rating to include a view of social and financial management credibility," says King. "The key will be to provide customers a valid value trade-off, where they will be willing to share social data to participate in building a better financial solution".

Another engagement tool is the Financial Personality, that uses an interactive survey to determine where a customer may fall in comparison to others. As with all other elements of Moven, this tool can change over time and allows for social channel engagement, since sharing and comparing of Financial Personalities is encouraged. The real purpose of the Financial Personality tool to further customize the real-time feedback and messaging according to the personal 'money style' of each customer.

Removing Friction From Banking

Chris Skinner, who writes the Financial Services Club Blog recently did a post entitled, 'The Bank That Removes The Friction Will Win' where he discusses the benefits provided organizations that have removed friction from commerce using digital data such as Amazon, Apple, Google, Facebook, Paypal, etc. His belief is that banks that leverage the available customer data and make banking as easy and intuitive as Apple makes entertainment and Amazon makes shopping will be both disruptive and successful.

While Moven will be introduced later this month with only a portion of the eventual functionality, what do we know today about how Moven wants to disrupt the traditional banking model initially and in the future?

Account Opening

The unique user experience begins at account opening. There are no extensive new account forms to sign and no involved opening process. Simply deposit funds, receive a MasterCard PayPass sticker and start using the account. When I opened my relationship, the process also asks for information on accounts I hold elsewhere and allows me to build my Financial Personality and my CRED score. Similar to Mint, Moven wants to be at the center of a customer's money management process.

Platform Support

Moven already has an online and mobile introductory site and plans on launching their beta platform on both iPhone and Android platforms out of the gate (unlike most other new players). In fact, they already have an Android app for CRED available on the store. Moven also has Facebook apps available for customers and prospects today, such as the Financial Personality profiling tool.

Card vs. No Card

As mentioned above, customers during the first 90 days will be provided the option of receiving a card for cash withdrawals at ATMs and for transactions not supported by PayPass. That said, it is the intention of Moven to quickly move to a cardless engagement due to Moven's belief that there are significant limitations to a card-based strategy.

This positioning was reinforced at Finovate Europe, where King drew the line in the sand by stating, "Any bank that still issues a plastic card to their customers in the future doesn't understand where mobile fits in the emerging banking experience."

Product Line Expansion

When viewing an application or business like Moven, it is normal to try to view the offering within the normal product-focused perspective of traditional banking. Is it a mobile banking app? Is it a mobile wallet? Is it PFM?

This would be a mistake, since the strategy at Moven does not focus on the underlying products, but on the utility of banking and the utility of a consumer's money. That's why Moven will not offer checks and is forthright in their criticism of cards.

Moven will focus entirely on retail banking services is not looking to expand into the small business space at this time (Many of the current complaints around the Simple offering deal with their lack of business accounts as discussed in The Financial Brand blog post reviewing Simple). 

According to King, later this year, there will be unique savings functionality added that will provide impulse saving incentives and a credit/overdraft capability will be added that will not work in the same way traditional banks handle credit.

Moven Capabilities

Not Everyone is Sold on Moven . . . Yet

While Moven is bringing a new perspective to the way people can bank in the future, there are industry followers who wonder about the potential of Moven to move market share. 

For instance, in a blog recap of the Finovate Europe conference, Forrester's Benjamin Ensor stated he was impressed with the innovation done by the Moven team, but believes the solution could be overhyped because of the difficulty in launching a brand new bank. According to Ensor, "Moven's biggest impact may be in encouraging traditional banks to raise their game, rather than the customers it takes from them". He did add that he would welcome being wrong.

Similarly, Daoud Fakhri from Datamonitor Financial wrote a blog entitled, 'Market Not Yet Ready for Moven', where he expresses concern that consumers may not be ready to embrace the concept of a virtual bank that only exists in the digital realm. Fakhri references Datamonitor's 2012 Financial Services Consumer Insight Survey that found that 90% of US consumers regard a conveniently located branch as an essential feature, and that only 26% would even consider switch to a bank with no branches. 

Fakhri summarized, "Moven looks impressive on paper, but consumers are just not ready to embrace virtual banks right now. The move is a brave gamble, but one that is likely to prove too far ahead of its time."

JJ Hornblass from Bank Innovation, while not necessarily being skeptical of Moven or any other recent new player, believes that many may be missing the potential risk of new channels and new business models. As stated in his recent post entitled, 'Amid the Innovation Hubbub, Are We Forgetting Risk Management?, Hornblass says, "How can an enterprise fully understand the entire gamut of risks of something that is entirely new"? While he doesn't suggest these risks are insurmountable, he just believes managing risk should be part of the equation.

Counter to these cynics, Ron Shevlin believes we are entering a new phase of competition where the importance of location is replaced with the expectation of being able to monitor personal financial performance in real time as discussed in his recent Snarketing 2.0 blog entitled, 'The Next Wave of Banking Competition'.

In Shevlin's blog entitled, 'NeoChecking Accounts', he also discusses many of the benefits of the new mobile offerings, stating that the likely early adopters may be those consumers who are less entrenched in their current financial relationships - Gen Yers. When asked whether this would be a drawback, Shevlin believes that affluence is not what will drive the profitability of Moven. "Profitability will most likely be driven by potential fees (people will pay for value), interchange, and the potential to generate revenue from third parties who would benefit from Moven's customer insight".

Brett King's response to the skeptics is even more straightforward. "We're carefully timing our launch to match emerging smartphone behaviors and launching a bunch of unique innovations, but at our core we're just trying to make a consumer's money and banking experience work better, minus the friction and inefficiencies of a typical bank. In that way, I think we are already becoming the benchmark of what a banking experience will become. However, in reality, many are probably hoping we will fail because I think they realize when we succeed we will render current distribution methods largely obsolete."

Additional Resources

Moven Gives Sneak Peek of New Mobile Banking App - Pandodaily (February 2013)

Amid The Innovation Hubbub, Are We Forgetting Risk Management? - Bank Innovation (February 2013)

The Bank That Removes The Friction Will Win - The Financial Services Club Blog/Chris Skinner (February 2013)

Market Not Yet Ready For Moven - Datamonitor Financial (February 2013)

The Future of Movenbank - Snarketing 2.0 (October 2011)

Will The Power Of Mobile Make Branches Disappear - Bank Marketing Strategy Blog (February 2013)

The Next Wave of Banking Competition - Snarketing 2.0 (February 2013)

NewChecking Accounts - Snarketing 2.0 (January 2013)

Moven to All Digital Banking - Bank Marketing Strategies (April 2012)

GoBank Introduces One of First iOS7 Mobile Banking Apps

If you are an Apple iPhone devotee and have downloaded the new iOS7, you probably have a strong opinion about the new design. Maybe you love it. Maybe you hate it. Maybe you are like me and are still getting used to the new look, feel and functionality. 

Upon introduction, many apps immediately took on the new 'flatter' iOS7 look. That is, except for your mobile banking apps. In an industry desperately trying to keep up with customer demand for basic functionality, most didn't have time to change the look of their apps . . . except for GoBank.

In line with the GoBank brand, the relatively new mobile-first banking brand considered the introduction of a new design in late September an important differentiator for GoBank. "Being first to introduce a new design that leverages the iOS7 look shows that we're not just a bank, but also a technology company … right on the pulse of what's new and next," stated Sharon Pope, chief marketing officer of GoBank in an online interview with Bank Marketing Strategy.
  

Download (or update!) the #gobank #app to experience why Apple is featuring us as one of the "best new… http://t.co/x8AKAtK9xA
— GoBank (@gobank) October 1, 2013

According to Pope, GoBank's iPhone team worked carefully to incorporate Apple's new vision for the iPhone aesthetic so that the app would feel right at home on customers' recently updated devices. "You can see a lot of the elements of Apple's vision throughout the design. And a great indicator how beautifully we applied Apple's guidance is that Apple has featured GoBank as one of the "Best New Apps" for the iPhone."

Hoping to design in line with Apple's iOS7 'human interface guidelines' as outlined in their developer user interface design resource guide. According to Apple, an iOS7 design should embody the following themes:

• Deference: The UI helps users understand and interact with the content, but never competes with it.
• Clarity: Test is legible at every size, icons are precise and lucid, adornments are subtle and appropriate and a sharpened focus on functionality motivates the design.
• Depth: Visual layers and realistic motion impart vitality and heighten users' delight and understanding.

New GoBank User Experience

Immediately upon login, it is clear that GoBank was following the lead of Apple, especially with the design of buttons, eliminating the previous hard-edged buttons, arrows, etc. and replacing them with the borderless buttons that are key to the new iOS7 design. While the use of 3D button icons were used by Apple initially to replicate the Blackberry experience that so many early smartphone users were familiar with, consumers no longer needed the transitional visual element.

In addition, the initiation of the GoBank app follows Apple's start-up standards by avoiding splash screens and other elements that inhibit the ability to open the app immediately. This has always been a strong point for GoBank, with key activities shown at start-up. "We have never wanted the user to click through 4-5 screens to get to their main reason for visiting the site," stated Pope.

It should be mentioned that of all of the mobile-first banking firms (Moven, Simple, Bluebird), GoBank had one of the most streamlined applications in it's pre-iOS7 iteration. I have written on my admiration of GoBank in the past (Seven Reasons I Love GoBank) because the UI has always been intuitive, crisp and fluid, with all primary mobile banking functions being easy to access. 

The application and communication from the bank also is informal and accessible from their Facebook page to their new iOS7 Fortune Teller application that informs users if a proposed purchase could cause a potential financial challenge.

Another iOS7 designer guideline was to let translucent UI elements hint at the content behind them. For GoBank, this can be found in the pre-login experience (what someone would see when they download the app for the first time, which overviews some of the key features).

Project Runway Update

According to Sharon Pope from GoBank, the sponsorship and product placement on Project Runway has yielded a marked increase in awareness of GoBank throughout the fashion community and their overarching target audience. "It's a great target for us, because that community is always looking to find that look for less. Our budget tool, and Fortune Teller, are great for them. We think it's the perfect accessory to any fashion-loving person on a budget. And we've received a lot of praise from early users in this area," says Pope.

The engagement with Project Runway is also highly promoted through Facebook, Twitter, Instagram and YouTube.

OH: "It’s amazing. I’m totally going to use this in my everyday life.” #projectrunway #sponsor http://t.co/F3cBkWFzWv
— GoBank (@gobank) September 27, 2013

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Tomorrow's Checking: Built For The Mobile-First Consumer

PRODUCT STRATEGIES

The checking account is the foundation of a customer relationship and has withstood the test of time even as electronic payments and debit cards have replaced checks, online banking has eliminated the need for paper statements and remote deposit capture has made a trip to the branch a rare occurrence.

But all that we have become accustomed to is about to change as we enter the era of the downloadable bank account.

The downloadable bank account differs from today's checking account because it is built specifically for Customer 3.0. This customer manages much of their life on the go from their smartphone, wants access to real-time information about their finances and wants the ability to transact business without checks or plastic. They are the type of customer who pays for their coffee with their Starbucks mobile app, and uses mobile deposit capture instead of going into the bank or credit union branch.

Tomorrow's checking is not just having mobile access to a traditional checking account. It is a bank account built for mobile.

It is a downloadable mobile banking application that provides the basic money storage and money management capabilities of today's checking as well as integrated payments, contextual insight and an overall customer experience not being provided by traditional financial institutions today. It is easy to open and manage using a mobile device, and is similar to the products offered by Moven, Simple GoBank, Bluebird in the U.S. and mBank, Fidor, Hello, CommBank and Soon overseas. Tomorrow's checking may not have any associated plastic card, but may be able to store alternative currencies as was recently announced by Standard Bank.

Both Moven and Simple Provide Exceptional
Mobile Banking Contextual Insights

While the traditional checking account may not completely go away anytime soon, the risk of not meeting the needs of the mobile-first customer is increasing. This is because more new players are entering the marketplace such as T-Mobile's Mobile Money, with the potential of providing a downloadable bank account to a much broader audience than just the underbanked, unbanked and debanked. With either an already established physical presence or no bricks and mortar, these services can be provided at a lower cost than traditional banks.

Combining the attributes of a prepaid card and a traditional checking account, new checking disruptors can provide FDIC insurance, the ability to make direct deposits and electronic payments, accessibility to nationwide surcharge-free ATMs, mobile deposit capture and even branch access, checks and integrated rewards.

Attacking on a different front, players such as Google, PayPal, Amazon, Apple, Isis and others are hoping to control the digital wallet processing component of the payments ecosystem, leaving traditional banks with only depository functions.

Demand for a Downloadable Bank Account

There is already a demand for a low cost, easy access checking alternative as has been seen from the explosive growth of prepaid debit cards. According to PEW Research, the amount of money loaded onto prepaid cards has more than doubled in just three years, suggesting that more consumers are turning to them. As more prepaid cards have recently come into the market, the defining lines between traditional checking accounts and prepaid cards are beginning to blur. This is especially the case with those providers that offer mobile access to these accounts. 

While prepaid cards to date have been primarily targeted to the lower demographic segments who are less likely to use traditional banking services, the segment is still large and the banking needs are not significantly different from those of Customer 3.0.

According to the research:

• 5 percent of adults, or about 12 million people, use prepaid cards at least once a month.
• A large majority of prepaid card users are experienced with other financial products: 7 in 8 have or previously had a checking account, and 2 in 3 have or previously had a credit card.
• Most customers’ primary motivation for using prepaid cards is to gain control over their finances. The top four specific reasons they use the cards are to:
• Buy things online.
• Avoid credit card debt.
• Avoid spending more money than they have.
• Avoid overdrafts.
• 2 in 3 prepaid card users would welcome features that make it easier for them to save money.

Several recent research studies indicate that consumers overall would prefer to use a traditional financial institution (bank or credit union) for their primary financial relationship. There are many reasons for this affinity including trust, familiarity, local availability (yes, branches) and security. Additional studies show that consumers would also prefer to use their current bank for mobile payments.

Celent research found that 75 percent of consumers would like to view all of their finances within a mobile application and 63 percent would like to pay merchants directly from their bank account. Other features of a downloadable bank account desired by the respondents to the Celent research include mobile deposit capture (63%), the integration of rewards (55%), direct payment capability (52%) and photo bill pay (43%).

Source: Celent Research on U.S. Mobile App Preferences, July 2013

Based on the consumer requirements discussed above and the offerings of competing organizations, it is clear the checking account of the future (the downloadable bank account) will need to have the following features:

• Simple Design: From being able to open a new account using the camera functionality of a smartphone to being able to make payments, transfer funds, deposit checks and make purchases, the focus of tomorrow's checking will be on simple design, ease of use, and a focus on the customer experience. 
• Contextual: Using real-time transaction data combined with customer behavioral insight, tomorrow's checking will seamlessly integrate personal financial management (PFM) within the mobile application, providing a look into the future as well as into the past.
• Transactional: As opposed to relying on apps from outside providers or being reliant on specific merchant technology, tomorrow's checking will allow customers to conduct transactions anywhere with their mobile device. Further down the road, there may need to be the possibility to fund purchases from multiple currencies.
• Rewarding: Related to the contextual nature of tomorrow's checking account, personalized rewards will need to be provided to the customer based on their demographics, transaction activity and even their location.

It is clear that the checking account must evolve to remain relevant in today's digital world. One benefit to the bank or credit union for building a new downloadable banking account is the ability to retain the primary relationship with the customer at a time when competition is attacking from several fronts. 

More importantly, however, may be the ability for the financial institution to collect and act on behavioral insight that is associated with payment transactions. This insight is the Holy Grail of the entire banking relationship and the key to future growth (or existence).

Challenges to Providing Tomorrow's Checking

Beyond building the actual application, the primary challenge for traditional banks are the back office systems that support all banking services. Large banks usually lack the flexibility and innovativeness of a virtual-only start-up, according to Dan Latimore, senior vice president of Celent's banking group. "Big banks aren't as nimble as the start-ups," he said. "An incumbent bank offering virtual banking has to integrate the channel into a lot of legacy back-end systems and processes, which is cumbersome and expensive."

Another challenge to moving to a mobile-first downloadable bank account is that customer service issues arise that are foreign to most banks. "With today's checking account, customer service usually involves relatively simple issues such as account balances, status of a payment or deposit and address changes," says Beth Merle, director of business development for banking and financial services at Sutherland Global Services, an experienced provider of mobile wallet customer care. 

Merle continues, "If a bank is going to be offering a mobile-first bank account, the customer service calls could include questions about the mobile device or mobile application itself, which is usually significantly more complex, especially when dealing with different mobile devices. The call type is not a traditional one for the bank customer call agent. Banks entering into this space need to recognize this and consider the best way to assure the highest level of customer care may be to utilize a provider with expertise in these calls."

According to Celent, banks will most likely need to rethink the value proposition of the checking account and the interrelationships of current stakeholders within the organization. “Banks have to consider many issues before building these new capabilities, such as, how to manage tensions between new and old sources of value, and what would happen if mobile payments were to lead to fragmentation and re-emergence of the domestic payment solutions,” says Zilvinas Bareisis, Senior Analyst with Celent’s Banking Group. “However, we strongly believe that the core bank account must evolve to maintain its relevance in the digital world.”

One advantage the traditional banks have on their side is a huge consumer inertia when it comes to switching bank accounts. Even as banks have tried to improve switching processes in the U.S. and the U.K., a surprisingly few customers ever move their bank account. “Despite switching services of various forms over the last 10 years, switching rates have never fallen below 2% but have never exceeded 3% during that time", according to Gareth Lodge from Celent. "Hundreds of thousands of dollars have been spent on improving switching processes by many banks, with heavy advertising across all mediums used to promote the use of it. The result? Switching peaked at just over 4%.”

A challenge faced by the upstart 'neobanks' is that it has been notoriously difficult to make money from a basic current/checking account proposition. And with interchange pressures everywhere, the challenge is not getting easier. "It is no secret that many banks cross-subsidise checking account customers and try to sell them additional products, such as savings, loans, credit cards, mortgages, and the like", says Bareisis from Celent. "I appreciate that the cost structure for the new competitors is very different, but finding alternative revenue sources is likely to be important for them in order for them to succeed as a business in the long term."

My Personal Experience

For more than a year, I have been actively using mobile banking accounts from Simple, GoBank and Moven. During this time, I have become a fan of many of the features and functions of each of these accounts, most of which I don't have with my traditional checking account at Wells Fargo. The customer interface with each of these accounts is far superior to what I have with my Wells account and each is actually fun to use.

What is probably most interesting is that there is virtually no difference between how I view these accounts compared to my traditional checking account despite the fact that each of the newer accounts is actually built upon a reloadable prepaid debit card. How soon will it be before other mobile-first consumers also realize there is almost no difference?

In the past two weeks, each of my accounts has been tied to my new LoopWallet FOB. This has allowed me to do cardless transactions at EVERY merchant terminal that would normally require a card swipe. This has made an already excellent customer experience with my Moven, Simple and GoBank account (and even my Wells checking account) that much better. It provides me a glimpse of what is possible in a world where I can do all of my banking with a mobile device.

Nobody knows what exactly what the future holds for checking accounts or payments. However, it seems clear that the traditional checking account — which until now has been the foundation of a bank’s relationship with its customers — will soon evolve to maintain its relevance in the digital world. The major question will be...who will own this relationship?

Additional Resources

The Rise of the New Bank Account? - Celent Research (Sept. 2013)

Why Americans Use Prepaid Cards - PEW Research (Feb. 2014)

Consumers Continue to Load Up on Prepaid Cards - PEW Research (Feb. 2014)

Jon Wilk Presentation of Chase Liquid Account Customer Base - Chase Bank (May 2013)

2011 FDIC National Survey of Unbanked and Underbanked Households - FDIC (June 2011)