Three US banking disruptors to watch
Mapa has been closely following digital banking developments in the US market for several years. Simple, Moven and Ally are three key driving forces in the evolution of banking. While having similar outlooks on customer-centricity, they come from different backgrounds and deploy different tactics in reaching their goals.
Simple – getting the basics right
On average, Americans under 35 save -1.8% of their yearly income – Simple customers save 10%. Simple customers have access to features such as automated, and personalised, savings goals; a ‘safe to spend’ balance; the ability to search for any transaction ever made, and can add photos, notes or hashtags to any purchase. The list goes on.
Simple in itself is not actually a bank, it is a service that manages your bank account. The actual account is held by a bank, previously The Bancorp Bank. Bought by Spanish BBVA in 2014, Simple moved its accounts to BBVA Compass early last year.
Simple CEO, Josh Reich, comments, ‘We want to remain an independent company. We appreciate the resources they provide but we don’t want to die from their loving embraces. We want to cherry pick what is useful to us; we are doing more of the taking in this relationship.’
More recently, Simple has taken it upon itself create a contemporary version of a joint account. In September last year, they announced their beta testing phase of Simple Shared; a joint account ‘for partners in spending, saving, and doing.’ Available only to its current account holders, the main requirement for this account is a shared address – the relationship status between the two parties can be whatever it wants to be; couples, roommates, family, or something else.
To reiterate what we’ve said in the past, Simple does the basics well.
Moven – an enterprise platform
Moven aims to drive behavioural change within its users. Moven’s founder, Brett King, has said that they now have statistical evidence to show that their users are saving somewhere between 30%-50% more than contemporaries who don’t use the Moven app.
With the help of technology, King believes that banking will become an integrated part of our daily lives. Smartphones will, with the use of geo-location services and bank account data, make assertions and recommendations on spending. Credit promotions could be highly targeted and contextual, such as a 12 month interest-free offer to someone looking for a new iPhone inside the Apple Store. Moven is designed to provide customers with a bank account but also to give advice on how to manage and use their money as it is being spent.
Moven launched out of its beta testing stage in 2014. Like Simple, Moven is a platform, rather than a bank. In the US, its debit cards are issued by CBW Bank; however, unlike Simple, Moven is partnering with several banks outside of the US – allowing them to use the backend software and placing their own branding on top.
In the same year as its official launch, the disruptor agreed to integrate its money management software into Westpac New Zealand’s banking app. In April last year, they partnered up with Canadian TD Bank to create a TD-branded money management app using Moven’s software.
The enterprise side of the disruptor has been so successful that they’ve had to restructure the business, laying off a dozen or so employees. ‘We’re just making a lot more profit out of the enterprise business,’ says King. ‘The revenue is stronger. And we have an obligation to our shareholders.’
Ally – looking for multi-product customers
Online bank Ally is arguably the most exciting disruptor in the US at the moment. It has a particular focus on the automotive industry – dealers and their retail customers – as its parent company, Ally Financial, spun out of General Motors Acceptance Corporation in 2006.
In 2008 it participated in the bail-out of US banks. Two years later, it was rebranded to Ally and, as of 2014, the majority of shares had been returned for public trading.
Their vision? To be ‘a relentless ally for your financial well-being’. And, all things considered, it’s been doing well.
For the last three years in a row, Ally has won GOBankingRate’s Best Banks study for best online bank in the US. The main reasons for beating its competitors have been attributed to its superior no-fee checking and savings products, its online and mobile banking tools, and its 24/7 customer support channels. Features and initiatives worth highlighting include Ally Bank online banking courses that teach customers the essentials of budgeting, banking and investing, credit, and auto-financing.
What sets Ally apart from the other two, is that it is trying to offer a more complete set of banking products – offering strong rates on savings and Certificated of Deposits. Neither Simple nor Moven offer anything other than checking accounts.
Last year, the disruptor launched a credit card and entered the mortgage and wealth businesses. As of the end of September 2016, the disruptor had about $157.4 billion in assets. Ally would be an interesting choice for multi-product banking customers.
Mapa has portfolio of live bank accounts from all over the world. If you would like to know more about any of your American or international competitors, please contact us now.