Welcome to digital disruptors. Today we’re sharing insights from Mobey Day. You’ll hear from Canadian and European industry experts who are bringing digital transformation to financial services.
I’m Meghan from Say Yeah, and our team supported Mobey Day from its very beginning, in Toronto in 2016. We’ve presented at the conference, we’ve judged competitions, moderated panels, and connected with its many diverse delegates. There’s no better time to talk about financial services transformation in Canada, and open banking is definitely a hot topic.
Thanks, Meghan. I’m Lee Dale, Say Yeah’s CEO. And I like to take a moment to unpack open banking. The heart of open banking is data portability. Think about your mortgage. You have a pay schedule with your lender, you can make lump sum payments, but you’ll be penalized if you want to change anything. All these details are carefully guarded by your bank. They don’t share your mortgage options with anyone else, which makes it harder for you to control and understand your home financing.
The difference with open banking is you have control over this data, your data, you could share it with other lenders use it to study trends or shop the market for a better, clearer, more flexible mortgage option. Now in Canada, there’s still no legislation on open banking, but it’s coming as Europe leads the way North America will follow. This is what makes Mobey Day an important event for Canadian financial leaders, giving them the chance to connect with peers from across the pond, who are already years into open banking.
Now, let’s dig into our highlights. We’ve got Stacks’ Chief Product officer Ranjit Sarai, and Erlend Sundvor. the Eika bank group’s payment expert. They’re sharing their companies’ innovations in finance.
I’m Ranjit Sarai, I’m the Chief Product officer at stack. I have been at Stack for about a year and a half. And I’m responsible for all product strategy roadmap and development of the product. We found a lot of our customers are paying tons in fees every month. And it’s tough because as a bank, you typically rely on that fee revenue to support your customers in terms of the overhead, so you have to pay for branches, you have to pay for a lot of overhead as a traditional bank. And the way to generate the revenue from a retail bank perspective is charging fees.
And typically millennials unfortunately don’t have large bank balances. And so they actually pay the most in fees, because they’re not as profitable for the bank. And so if you’re someone that’s, you know, you’re 45 years old, and you have 510 thousand dollars in the bank, they’ll waive all your fees. If you’re a millennial with $1,000 or $500. In your bank account, you’re probably paying the most in fees. And so we from day one created this product that’s basically free, essentially eliminate all the fees for the customer. And our business model is based on interchange, which is every time you spend on the card. Merchants pay a percentage to us in terms of revenue. And so for us, it doesn’t really matter what the balances. It’s really if you use the card, and so customers really are profitable to us, the more they use the card, which is a natural behaviors you spend the shot in terms of what banks could do. I mean, really, it’s really Looking at their business models, it’s tough to do. But to really attract millennials, you have to have an authentic business model. You can’t kind of charge fees or high fees with other products, you really have to be transparent, authentic. And I think part of the things we’re talking about today at Mobey are an open banking is going to help drive that, for banks is really that transparency in the data and in terms of the products and services itself. So we spent a lot of time at campuses, we spoke to a lot of materials, talk to our friends, and really tried to understand kind of what, what’s wrong with banking today.
And obviously, the big one that came up is was fees. And so that was a big part of it, part of our core value prop is again, no fees. But the other part was that banking just wasn’t exciting anymore. Right? It’s kind of a chore. If you think about, you know, the the big take we’ve got is actually it’s quite a painful experience to open up your bank account, because the balance is typically less than what you expect. And you kind of you kind of hate yourself for spending all this money not saving enough. And so we did a number of things in our products that really helps change that emotional experience when you open the app. And so one thing we did which is kind of unique is every time you Make a transaction, you make a purchase with stack, you have the ability to take a photo or video that purchase and share it with your friends in the app. And so now when you open the app, you have this whole feed of the stack community. And they’re sharing purchases, they’re sharing deals, they’re saying I got 40% off Banana Republic, they’re sharing coupon codes.
So you have this sense of community, not there alone. Every other bank when you open its you and the bank, right doesn’t matter. If I’m part of Bank A and they have a million customers, I don’t benefit from that. Right. But with stack you benefit from the screen sharing deal sharing stack hacks, we call them financial hacks. So we have that built in. The other part was saving. So the key takeaway found when we talk to our customers, as everyone knows, they have to save, but the hardest part of saving is actually starting. So everyone’s like, you know, I need to save I need to save, but they don’t have know how to start. And so what we did is we have this feature enabled, where when you set a goal, we let you know Okay, when is this when do you want this goal because they want to go to trip to Mexico and you want to go in a month. We actually tell you you need to save $5 every day to get there. And then we round up your transactions to five dollars. So every time you spend you’re saving. And so we’ve taken the whole kind of thinking and the barriers and then saving away by tying it to spend. And so now when you shop you’re saving and so you’re shopping, you know, people shop, typically to buy things that make them happy here they enjoy doing. But now you’re getting the benefit saving at the same time. So it’s less guilty. And now when you go in the app, you see your transaction just like any other bank, but you see what you save every transaction. And so we’re really trying to make an experience that’s more delightful when it comes to banking.
So I’m Erlend Sundvor, I worked at the Eika group in Norway, we are local alliance of small banks in Norway. So we are a bit different from some of the other players here. Mainly large banks. And I’m head of payments. So I am responsible for all everything that’s happening in the payment space for our local bank. I think this this new openness not only what we call open banking, but in general the ability to connect services and build new customers. experiences through that and in new and innovative ways. That wasn’t always the case. You know, we have seen a tremendous development over the past couple of years previously and payments were something that happened in the back office was not very interesting. nobody really cared.
Outside of these international experts. We met local leaders from TD Bank, BMO, Scotiabank, and more. Not to mention attendees and speakers from insurance, law and FinTech backgrounds. Everyone’s talking payments, identity and data portability. And they’re here to form partnerships, all with a Human Centered Design lens, putting customers first. This is the transformation happening within the industry, both locally and abroad. That’s why we’re so excited to be here today connecting with this great group of leaders.
Everybody’s talking about customer centricity and customer first but in the end it’s not really happening. It always ends up as the bank first. Almost always. So, it’s fairly obvious, but it’s, it’s proving hard to do in reality, it is basically just looking where the customer is. I mean, that is Norway, the main interaction the customer has with the bank is through the mobile banking app and debit card. So that’s where the customer is. And that’s where where much of the focus should be. Not all that’s not everything. Of course, we have to have other channels as well. But but that is really where the digital innovation has to happen. I don’t think there’s any more exciting business to be in right now than the payments and digital banking space. So so if you really want to get a lot of exciting things to do, and that’ll be exciting projects and the world happens and I think that’s, this is the right place to be.
At Stack, it’s kind of straightforward. We start, we’re starting from scratch at a startup, there’s no legacy really you, you build a team together, you build the technology together. And you’re able to instill from day one, the principles of digital kind of innovation and agile methodology and all those things. I’ve worked at many banks before. With, that’s not the case. And it is a lot more difficult, where you have legacy, you have legacy technology, you have legacy institutions and culture. You know, the biggest thing I found in those instances was the culture piece. And so getting people on board with agile thinking in terms of, you know, not everything has to be 100%. Right? When it goes out the door, all the requirements will not be fully specked out. You don’t need a 400 page requirements document before you start. You know, that’s difficult if you’ve never done it before. And so from a from an organization perspective, digital transformation is really a journey. It’s essentially for especially for large bank, it’s really like you’re trying to move this aircraft carrier, right. So you can only move a few degrees at a time you can do a complete 180 or 90 return and so The biggest thing is getting your people on board. The technology is actually not that difficult. It’s freely available. A lot of tool kits exist. But if you don’t have buy in from your people, then you’re not gonna be able to execute on this.
Let’s finish up with Ranjit Sarai’s take on the value of Mobey Day.
I really think Mobey forum itself is a pretty unique kind of organization. It’s kind of built by kind of members for members. It’s really kind of this gives you an inside look into kind of what’s happening behind the scenes. I know, there’s two parts to the Mobey Day, there’s kind of the closed closed door, forum groups, and then there’s the open one. Both are amazing in terms of the things you learned, but the closed door sessions are amazing. So if you can become a member, it’s super interesting because you’re with your peers. And again, in the privacy of a closed session, people are a lot more open in terms of what’s happening. There’s there’s kind of that that unsaid rule of what’s said at Mobey forum stays at Mobey Forum, and so I get tons of value from those sessions as well. Well as the open sessions are amazing because you can bring outside speakers in and get outside perspective. And so having a combination of both is pretty unique.
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