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In our own FinTech bubble, last week’s news of Monzo integrating with IFTTT has caused many a geek outs. For good reason – the possibilities are actually endless and here is the first intelligent way to do automation that may finally bring the consumer closer to having what they always wanted and never got from their bank: being served when it comes to their finances, in a way that makes actual sense to their every day life, in a fast and easy manner.
Once the sense of extreme gratitude for any actually useful technology being awarded to us plebs has washed over me, I must confess my extreme excitement left way to some concern and I’ll tell you why.
For those of us lucky enough not to be familiar with either challenger banks or the IFTTT mechanism in itself, the former is an alternative to your usual incumbent banks and the latter stands for “If This Then That”, and it is a free web-based service to create chains of simple conditional statements, called applets and you can think of it as a standard maker, a way to enable disparate parts of the internet to work together in a manner that’s automated according to a certain user’s instructions.
Creating automation is not a new concept in financial services of course, over the past couple of years we have spoken of little else than AI even if we seem to have mainly focused on the least exciting -in my opinion- of its applications – Voice Banking. Nonetheless, the promise of AI is much greater than that in its potential to read our minds and ensure smooth sailing through our life moments where money is concerned.
Many years ago at Meniga, with our eternal obsession for the consumer’s feelings and needs and our sense of being bound by the amount of trust and data they were entrusting us with, to offer them what they could truly find of value, we built something we called “Peace of Mind Banking” This was in essence a way to have some of the usual, mundane tasks performed by your bank automatically in the background on regular basis, without you as a consumer needing to expand any more effort than the initial set-up. The same principle as regular payments and Direct Debit only for many more actions such as automatic fund transfer between own accounts to always avoid bank penalties, etc.
For all of Meniga’s wins this nearly bombed at Finovate (and by that I mean we haven’t won Best of Show that particular year partly because banks couldn’t reconcile what being that customer centric and avoiding penalising their customer would do to their bottom line, and partly because, in 2012, it was far too early for its time and the excitement around automation hadn’t begun.
This is now thankfully starting to change.
The best example of how transformative automation can be in financial services, has emerged and quickly became stupendously well adopted, over the last 18 months – automated incremental, and often invisible savings.
Companies such as MoneyBox, CoinJar, Acorn, etc are but a few examples of FinTech providers who directly to consumers, or in partnership with banks, have provided a way to round up purchases to the nearest dollar (sic!) and squirrel those savings away in a saving account that provides its holders with immensely positive emotions when checked, and gives them a way to painlessly do an activity they otherwise loathed: saving. (Look out for a full article on the mechanics of the psychological process that makes automated invisible savings so addictive soon.)
Monzo already rolled out a CoinJar integration earlier this year showing they understand the extreme potential. Which gives me hope that they also understand their share of responsibility in the game, the layers of better they should provide to all consumers – automating payments in general and Direct Debits in particular and harmonising that with notifications and predictive cash flow; creating context for transactions; helping them avoid overdraft and other fees by performing automated transfers between accounts, etc.
Every bank is in debt to the consumer as compared to other technology driven service industries. The equation is painfully simple: Banks’ Moral Debt to Consumers = Technical Debt * Experience Standards in the Digital World and this debt’s interest rate is compounding by the minute and translated directly into loss of relationship but with moves such as this integration, Monzo are tackling that debt and widening the gap to the incumbents who do not.
As I keep repeating often, much of that technical debt remains a problem as more and more banks -challengers included- still have trouble admitting the importance of fundamentals around data analysis and seem to hope against hope that they will avoid having to lay that groundwork, but for the purpose of this article I won’t go into that again and will presume that Monzo’s core pillars of categorisation, aggregation and data analysis are in better shape than anyone else’s so they can focus on the experience as they do with this integration.
This part from what Monzo says is really good news: “ We’ll be rolling out more functionality based on your feedback, carefully considering how to make sure this integration is safe, useful and fun .” but the reason I’m only cautiously optimistic is that I need to see that promise materialise into what the consumer needs in lieu of having that outsourced to the community or the consumer themselves. Let me explain.
There is no contest that what’s needed is a far superior technologically and personally relevant experience with one’s finances, but what that should entail has at least two layers: one that is generally the case for all consumers and one that is intensely personal and only relevant to the individual. IFTTT and other mechanisms to further personalise one’s MoneyMoments should count for the latter only, while the former is a responsibility a bank shouldn’t attempt to delegate.
This was, incidentally, my objection towards the fad of app stores popping out at every self-respecting incumbent bank since Credit Agricole’s in 2011, a tendency that has become the norm with the advent of our saviour – Open Banking, and that objection has always been that banks must stay firmly with the -admittedly uncomfortable- knowledge that no amount of technology and openness absolves them from “doing right by the consumer” by constructing the foundations of what the delightful experience should be.
Without that intent, Monzo is simply building another app store open to external developers to do their job for them in an effort to avoid deeply thinking of what needs to be done, and potentially absolving them from the obligation to create emotionally relevant experiences across the board themselves.
Related: Dude, Where's *My* Bank?
So call me cautiously optimistic now that the unicorn dust is settling.
For this to be substantial and neither a publicity stunt for purposes of B2B, or securing another investment round, nor an attempt to proclaim care about the consumers while outsourcing any design thinking and sound technology building, banks that follow their examples -and I have no doubt this could easily be everyone very soon, such an integration can easily become the standard-, must do a lot better in constructing valuable MoneyMoments for us than making Alexa play “Money Money Money” when our salary hits our account.
Only then we will move from “If Customer Dissatisfaction at Gap between Banking and Rest of Digital Services then IFTTT integration” and into “IfBanking then Money Moments™”