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)

Banks Need To Reassess Cross-Selling Efforts

For decades, cross-selling has been a strategic priority of banks and credit unions since earning more business from current customers is the most efficient way to achieve growth. Despite this focus, a new study indicates that many financial institutions may be far from realizing the full potential of cross-selling.

In fact, according to the study, only 19 percent of retail bank customers owned three or more products in addition to a checking account with their primary bank compared to 49 percent who have three or more products with other financial institutions.

A just released Deloitte report entitled, 'Kicking It Up a Notch: Taking Retail Bank Cross-Selling to the Next Level' supports the view that success in cross-selling targeting may need to move beyond traditional product ownership, satisfaction and tenure parameters to include a behavior segmentation approach that takes into account perceptions based on total account holdings. 

While the Deloitte survey shows that banks have generally achieved long tenure and a high degree of satisfaction with customers, this success has not translated into multiple product relationships. In fact, the study found that there is a positive correlation between the number of products a customer uses and their desire to use multiple institutions.

Source: Deloitte Center for Financial Services

According to the study, customers only turned to their primary financial institution for a savings account on a consistent basis. In fact, while 75 percent of respondents owned credit cards, only 33 percent had one that was issued by their primary bank. Obviously, this could be the result of an inferior offer, poor marketing and/or the absence of a primary bank offered credit card, but it still illustrates a major opportunity gap.

Some of the other 'opportunity gaps' may be caused by poor cross-selling at the time of account initiation, poor customer education on the benefits of relationship consolidation or even beliefs that a primary bank is not the best place to build a specific relationship (wealth management or insurance products).

Source: Deloitte Center for Financial Services

The research suggests that banks and credit unions may want to revisit traditional cross-selling strategies that focus on current product ownership, tenure of relationship and demographics to predict cross-selling success. Deloitte believes a deeper analysis of customer perceptions and motivations driving product purchasing may be needed, including a potential share of wallet segmentation scheme.

Share of Wallet Segmentation

"To remain competitive in a largely saturated market where revenue opportunities from new customers tend to be limited, deepening relationships with existing customers will likely remain critical to increasing banks’ top-line growth," Deloitte says. "One important way this might be achieved is through more refined strategies and targeted execution of cross-selling programs."

As a first step, respondents were grouped into four segments - 'Basic Users', 'Value Shoppers', 'Diversifiers' and 'Consolidators' - based on share of wallet.

The segments were then analyzed based on a number of dimensions such as demographics, perceptions, price sensitivity and channel use.

Finally, the segments were analyzed for product ownership patterns to identify opportunities for cross-sell success as well as 'dead ends', where investment could be wasted (no expanded ownership potential). Product ownership details available in the full report.

Segment Challenges and Opportunities

Basic Users

As the name implies, 'Basic Users', despite the large size of this segment (42 percent of respondents), have limited financial means, less access to credit, and an average bank product ownership rate of 1.7. And while there is uniformity of income and product ownership rates, Deloitte suggests there are two groups of basic users; 1) young people whose product needs may evolve/grow as they get older, and 2) middle-aged and older customers whose needs and behavior are unlikely to alter over time.

"One way to attract young basic users could be through education. Providing information and advice on financial challenges, such as debt management, benefits of improving one’s credit score, and the importance of saving early for retirement may help banks become the go-to institution for this group," Deloitte says.

To target young basic users Deloitte suggests use of social media and mobile banking and gamification that emphasizes improved money management.

"As young basic users progress in their professional and personal lives, their needs are likely to evolve. Banks could leverage their primary relationship to engage early with this group to provide products that meet their needs at various life events - education, marriage, purchasing a home, starting a family, investing, or retirement. This can allow their product needs to be met sequentially and appropriately, rather than pushing products prematurely with limited success or failing to cross-sell at all. A consultative approach as opposed to hard-selling may be particularly effective with this group."

In addition, Deloitte suggests retail bankers could learn from product bundling strategies common in other industries, offering younger consumers in the Basic User segment the flexibility to purchase products in bundles as well as individually. For example, all add-on elements of checking account such as debit card usage, in-network ATM usage, paper checks, overdraft protection, and wire transfers can be priced individually. "Such a pricing approach will likely increase the affordability of the product, allowing Basic Users to pick and choose services that fit their wallet size," says Deloitte.

Deloitte also advocates low-cost products such as prepaid cards with low usage fees, no minimum balance requirement or overdraft fee. While the younger part of this segment is relatively small and could be considered a long-term investment, banks and credit unions who connect early could enjoy relationship growth over time.

Value Shoppers

Value Shoppers, the second largest Deloitte segment (39 percent), are described as being the least loyal customers with only 1.1 products with their primary bank. A lack of trust among this category of customers means that they usually don't believe their bank is 'fair', and are prepared to take their business elsewhere even over a 'slight' fee increase (6 in 10 will leave if fees increase $5 a month).

Nonetheless, Deloitte suggests targeting value shoppers can be an attractive proposition for banks.

"They have all the attributes that banks typically look for in high-value customers: financial strength, broad product needs, and higher channel engagement levels (67% pay their bills online and 58% use bank tellers) - the second highest among all the segments. Winning over this segment will likely involve changing their negative perceptions and incentivising product consolidation at the primary bank,"' Deloitte says.

The report notes that companies seen as having transparent pricing are best placed to win customers' trust. This may require simplified fee structure, consistent communication or a better demonstration of value.

"Given value shoppers’ low affinity with their primary banks and their tendency to shop for the best offers, loyalty incentives could be effective in influencing them to consolidate some, if not all, of their financial relationships with primary banks," says Deloitte. "Although banks have effectively implemented rewards programs at the individual product level, they will have to build a more holistic structure that incentivises customers to achieve the 'preferred' status in multiple product categories."

Wells Fargo’s Portfolio Management Account (PMA) is provided as a good example of incentivising customers for consolidating accounts with the bank. The PMA package begins with a checking account, which is then linked to other eligible Wells Fargo accounts, including savings, deposit, credit, mortgage, and brokerage. (details available in the Deloitte research available here)

Diversifiers

This group, according to Deloitte, is comprised of a significant proportion of mass affluent households (47 percent) and takes the highest average amount of bank products at 6.3, with about half from their primary bank. What they don't have through their primary financial, institution is the likes of investments, life insurance, and annuity products.

"Banks seeking to grow relationships with 'Diversifiers' may need to target specific products where the segment relies on other financial players (investment brokerage, life insurance and annuities)," says Deloitte. "Retaining this segment will also likely require banks to shift from traditional pricing to value-added benefits."

Advice given here includes personalised service at the branch level, access to dedicated financial advisors, and immediate resolution of any complaints.

Deloitte also suggests that banks could impress diversifiers by developing a better perception among the mass affluent base as a viable alternative for investment and brokerage services. The report highlights an example of Bank of America utilising its Merrill Lynch unit.

Consolidators

'Consolidators' are the banks' most loyal consumers, holding an average of 4.1 products with 3.6 of the products at their primary bank. They clearly hold a positive view of their primary bank, often in terms of service and even fees.

"What strategy should banks use with consolidators?" Deloitte asks. " Banks should retain them and leverage their loyalty by converting them to advocates."

"Personalised attention to consolidators’ needs and prompt response to their concerns will strengthen their relationship with the primary bank, increasing the possibility of turning them into advocates," says Deloitte. "Peer influence-based, community-oriented marketing holds the potential to create authentic customer relationships."

The report goes on to suggest banks could create dedicated virtual space, both on websites and social media pages, for consolidators to share their experiences and influence the perceptions and buying decisions of other customers. "Banks may also consider devising reward programs to incentivise consolidators to help generate referrals."

Additional Ways to Achieve Cross-Sell Success

While I have written many blog posts around the importance of cross-selling and the opportunities for success, Deloitte also emphasizes the importance of of changing current banks processes and functions to achieve success. Three aspects recommended by Deloitte are:

• Improve onboarding: It is critical to make the onboarding process efficient and effective since 75 percent of cross-selling occurs in the first three months
• Set cross-divisional goals: Set goals that ensure that lines of business stay coordinated and capitalize on cross-functional relationships
• Equip sales force: Combine incentives with training to improve sales force effectiveness

As shown in this recap of the well done Deloitte research report, banks need to move beyond product ownership and demographics to better understand the behavioral and attitudinal traits of customer segments. With this understanding, banks can redesign their channel and communication strategy and fine-tune product offerings to suit the needs of the different segments.

While the process may be challenging, it is clear the current strategies are not effective and need to be adjusted to remain competitive in a highly saturated market where revenue opportunities from new customers are limited and the importance of deepening relationships is paramount.

Additional Detail of the Deloitte Research

The survey was conducted online by Harris Interactive during August 16-30, 2012. In total, 4,271 checking account customers aged 18 years or older participated in the survey. Responses were weighted across geographic regions, income levels, age, and gender groups to reflect the national population.

Definitions of “primary bank” as used in the Deloitte report refers to the bank where respondents have their primary checking account. “Other financial institutions” refers to other organizations at which customers have a financial relationship.

The analysis includes 12 different products sold by financial institutions beyond the checking account:

• Savings account
• Money market account
• Home equity line of credit
• Investment/brokerage account
• Credit card
• Auto loan
• Prepaid card
• Life insurance
• CD
• Mortgage
• Secured card
• Annuity

Additional Resources

Kicking It Up a Notch: Taking Cross-Selling to the Next Level - Deloitte (July 2013)

Kicking It Up a Notch: Taking Cross-Selling to the Next Level (Infographic) - Deloitte (July 2013)

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