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Ian McKenna: Dispatches from Finovate (Day two)

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Day two of Finovate kicked off with the organisers highlighting the volume of money that firms presenting in 2014 had raised, totaling a staggering $1.4bn. Of this two of the six who had raised the most are firms whose propositions have significant potential in the UK; Motif Investing, who raised a breathtaking $75m, and Personal Capital, who managed an only slightly more modest $50m.

A wall of private equity money is currently looking for homes in the advice technology and digital advice market, driven in no small part by the significant number of successful exits that have been achieved by organisations such as eMoneyAdvisor (to Fidelity) and LearnVest (to Northwestern Mutual). In both cases the precise numbers are undisclosed but it is generally accepted that the amounts have been north of $250m.

In this summary I am going to focus on one organisation that gave a really impressive presentation and also committed to entering the UK market. The company is Moven. Having spoken with their CEO Brett King after the event and gained further insight to their plans, I think they have some important messages that the whole UK savings industry could learn from.

King is a charismatic presenter and wowed the audience with the company’s new app, positioning it as integrated to their customers’ lives which he argues will replace the need for budgeting and personal financial management. Not surprisingly, the presentation walked away with a Best In Show award at the end of the day.

The app 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.

Users can make a payment with the app and will receive an electronic receipt in seconds commenting on how it will impact their progress to their monthly budget based on previous expenditure. Using geo-location it can identify how much someone typically spends in a particular store and if there is not enough money in their account to meet usual spending at a location it can provide a reminder to transfer more funds.

In the US Moven partners with a bank who provide a prepaid debit card capability with an attached reserve account to help those who actually want to keep their spending under control.

The savings screen does not have goals but presents images of things the user wants to save for.  Users can import these from sites like Pinterest. King challenges the goals based concept which is increasingly popular in personal financial management tools, saying that if you give people goals once they achieve them they will want to spend the money.  Moven believes saving should be encouraged so that the consumer chooses whether to spend money or not.

When a user makes a purchase which is going to take them over budget a reminder is sent to invite the user to choose not to buy the item. But rather than discouraging them to spend, the message will be sent with a picture of the item they want to purchase and a comment about how much closer they would be to buying the desired item if they chose to save the money rather than spend it. The payment card can be linked to the individual’s phone so that a fraction of a second after they make any transaction they get a message inviting them to confirm if they actually wish to proceed.

King points 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.

The app has now been extended to encourage users with an impulse save capability similar to that offered by True Potential to their clients.  Again like True Potential the impulse save can be made via smart phones (iOS or Android) and Apple watches.

At Finovate Moven announced a global partnership with Accenture and that they would be offering services in several more countries, including the UK where Brett King told me that he has two of our largest banks aggressively competing with each other and is expecting to be operational in this country by mid-2016.

Moven’s application of behavioural finance to consumer’s day-to-day finances clearly offers major benefits to those who want to take better control of their day to day spending. Personally, though, I can’t help think that there are non-banking organisations’ who would make far better use of these services.

Ian McKenna is director of Finance & Technology Research Centre

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