At Finovate Spring, Moven demoed Bank 4.0. Moven is a reloadable debit card and mobile app. Just like Fitbit tracks your physical activity, Moven tracks your spending by category and will compare your current spending with your past spending behavior. It’s as if a prepaid card had a love child with Mint that grew up to be an older, more mature debit card that is able to track your money in real-time.  I’m not the first person to compare physical activity to financial activity but I think the comparison is really compelling. People are often just as wrong about their physical wellbeing as they are about their financial wellbeing. Early adopters of wearables have proved that the “internet of me” is an effective use of gamification and can significantly impact behavior. The formula is simple; linking users to their own behavior enables them to positively change their behavior. By engaging people in their own self-interest, Moven has successfully applied the “wearable-model” to money management. Unfortunately, a lot of Fintech players and financial institutions have integrated gamification on a very shallow level (this was the word of the year circa 2011). On one extreme, we have banking apps that reward you with a gold star (carrot) after contributing to your savings account. On the other, we have the more traditional “stick” of overdraft fees; Big Brother Bank tells you to stop overspending. A scheme of rewards for good behavior and fees for bad behavior is more appropriate for cattle than it is for people. Consumers aren’t going to change their behavior by being prodded and pushed. Moven’s approach focuses on positive changes over reactive punishments or rewards. They have delivered on this and two other insights that the rest of the Fintech world would be wise to consider.

  1. Dealing with money is an emotional experience. It will never be enough to simply show someone a string of recent transactions. Successful money management will involve helping the user understand the depth of their decision-making. Prompting questions like “Is this impulsive?” instead of “Is there enough money in your bank account?”.
  2. People are highly visual learners. People can more easily digest data when it is quantified and categorized—especially data within the context of their own lives.

More than any other industry, the banking and financial industry must acknowledge the emotional experiences people have with money. We can no longer engineer products and services without considering the usability and the experience of the user first. How valuable is a gold star to a 40-some-year-old mother trying to budget for groceries? Great, she has a gold-star now that she’s somehow managed to spend less this week and put some money into her savings account. That’s not a meaningful experience. More importantly, it’s not helpful. It’s a gimmick. How is a $36.00 overdraft fee going to help someone who is clearly struggling to keep money in their bank account? Javelin data shows that Y.1, the youngest segment of Millennials (ages 18-24) is the first to leave their bank because of overdraft fees. There is a lot of capital going in to Fintech right now. As we develop these incredible financial tools we must maintain the user’s perspective and keep a focus on an evolving financial well-being over a static financial status.