Two weeks ago over 1,000 entrepreneurs, venture capitalists, analysts and a wide range of other people interested in the very leading edge of financial services innovation spent two days in San Jose, US, watching 70 presentations at the Finovate Spring event.
This column represents my summary of the highlights from a personal finance perspective based on both the presentations and one to one discussions with those I found most compelling.
Best for: Consumer engagement
One thing so many Finovate presenters do well that traditional advisers and institutions struggle with is communicating information and concepts in styles that are easy for consumers to understand. For example, Hip Pocket generates a really simple analysis to help consumers understand and compare their current level of retirement savings with their peers.
The user provides a small amount of information about themselves, as well as high-level details about their retirement savings and gets a comparative analysis of their situation against their peer group. Humans are naturally competitive creatures so this provides a great platform for encouraging further saving. A similar service is provided for mortgage comparison. This is an interesting crossover between gamification, for example Australian website People Like U, and a refreshingly different way to think about achieving customer engagement.
Best for: Budgeting
Stratos Card won my personal “I Want One of Those” award with a credit card sized device that can hold all the information from your different credit, debit, store and loyalty cards on a single electronic one. For a $95 annual fee users receive the card with a small device, which can plug into your smartphone’s audio socket.
This has enormous potential for linking the next generation of employee benefit solutions that are focused around financial fitness and helping employees take greater control of their budgeting.
Best for: Investments
If I had to pick one service from the event that directly relates to the UK investment industry it must be Draft App. It provides a simple but highly effective service that a non-professional investor could be expected to understand.
The service first aggregates all the investment and banking accounts of the investor into a single holistic view. Then it assigns a risk category based on a weighted algorithm that combines standard deviation and asset class. Draft assigns actual risk tolerance versus a desired risk tolerance and also shows performance on a cumulative, year-to-date, one-, three-, five- and 10-year return, a cumulative fee percentage, and how assets are allocated across classes, styles, sectors and markets. The user can then see on the same dashboard exactly how their investments compare to the top 10 per cent of portfolios across the whole Draft system.
The service is available both in a direct-to-consumer version or as a white label for adviser firms. In the latter context it could be a very useful vehicle to identify other assets the adviser might be able to consolidate under their advice.
Best for: Saving
Moven is one of the most innovative online banking organisations in the world and at Finovate it announced plans to enter the UK market. Its chief executive Brett King tells me he has two major UK banks biding for its services.
The company presented a new app it says can be so integrated to their customers’ lives it will replace the need for budgeting and personal financial management. It includes a spending meter, which takes on the mood of the user’s financial health. Stay in credit and the screen stays green, if things get tight it changes to amber and if you are in the red so is the Moven app screen. Users can drill down into categories and individual items of expenditure to consider how they impact their budget. Quite simply if you stay in the green, you save money.
King challenges the goals based concept increasingly popular in personal financial management tools, saying that, once they achieve the goals you set, they will want to spend the money. Moven believes saving should be encouraged so that the consumer chooses whether to spend money or not, pointing out that it is a consumer’s day-to-day spending behaviour that gets them into trouble and that is what people need to be helped to modify to become successful savers.
All the above services present a far more consumer friendly face of financial services and advice and provide important lessons we could all learn from.
Ian McKenna is director of Finance & Technology Research Centre