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Ian McKenna in the US (Pt. 2): What we can learn from the States


The second day of Finovate Fall was a stark contrast to the first. As I explained in my previous piece, day one was full of financial advisers delivering innovative digital advice solutions, but on day two the most interesting presentations came from organisations with very different backgrounds. One showed how far ahead of the UK America is in some respects whilst the other served to identify quite how good some elements of the British financial system are. 

Larky is a loyalty plan aggregator that enables consumers to benefit from a wide range of incentive and discount schemes as they travel around in their normal daily lives. It leverages the power of location features on mobile devices so it can notify users when they are near to local deals. I see this sort of service as having huge application in the employee benefits space.

There is no point in having discount schemes for employees if they do not realise when they can take advantage of them. Contextual tools like this create a way to deliver real savings and rewards to scheme members and highlight when they can take advantage of them. This is a great example of how location services will increasingly play a key role in driving purchasing decisions. In the future, wearable devices will inevitably amplify this effect.

It turns out that many loyalty programs can have diverse benefits, for example the Detroit Zoo actually offer discounts from Pittsburgh Paints, but how many Zoo patrons would realise this? Using such services very diverse companies can create business for each other through loyalty plans.

Larky’s offering can be white-labelled by financial organisations and if a company does so they can also drive more business to their existing clients by inviting them to create discount schemes for other organisations’ employees.

MoneyStream’s chief executive Mike Bertrand left Intuit two years ago and decided to produce a financial platform for consumers aiming to make their lives easier to manage. To do so, he decided to create a digital financial assistant to help consumers take more control of their day-to-day finances.

To understand this one needs to recognise that the US banking system is far less sophisticated than the UK. Many of the services we take for granted simply do not exist in the US. There is no equivalent of direct debits and the concept of same day transfers of funds between accounts with different banks is seen as a nirvana. Where we can however learn a great deal from the US is the widespread adoption of personal financial management services to help consumers.

In the US consumers still manually write and post checks for payments on a monthly basis. MoneyStream makes three simple promises to the user. Never pay late, never go overdrawn and do everything in one place. One of the primary challenges of persuading a customer to use a PFM service is to get them to provide the key account information in order to make the service work. To achieve this it is essential to give users valuable information quickly. In the first three minutes MoneyStream provides an Outlook style day to day calendar of income and expenditure and when the bills are due. 

The service predicts user budgets using a “people like you” analysis to identify cohorts who will have similar situations and where it is reasonable to expect what amounts will be. It will detect new bills automatically. One of the major advantages of MoneyStream over a wide range of PFM services that already exist in America is the extent of integration they have built with mobile phone companies utility suppliers and a whole load of third party organisations so individuals bills can be presented all in one place via the service.

It identifies opportunities to see where there are chances to switch suppliers for a lower cost and also if the user switches to a lower cost credit card they can automatically switch all existing payments to the new account.

The service is called MoneyStream rather than cash flow because that how users tell the company they see it. MoneyStream has been written from the beginning so that users can share elements of their money stream with financial advisers. At a time when increasing numbers of UK advisers are implementing lifetime cashflow planning with their customers this service highlights why a similar day-to-day financial management offering could also help.

Arguably MoneyStream represents the direction for the next generation of services like MoneySupermarket and perhaps shows why the UK aggregator bought the OnTrees service earlier this year. 

Ian McKenna is director of Finance & Technology Research Centre


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