How Can Data Power the Money Experience?

By Theodora Lau & Bradley Leimer of Unconventional Ventures 

One thing that technology platforms from Amazon to Google to Facebook know is the value of data. These platforms know more about us — through how we use our mobile devices and applications, where we go, how we search, and what we buy — but to what end? 

Most of these platforms are focused on selling advertisements and exchanging our attention for sales, either for themselves or their customers. What’s in it for the consumer? What’s in it for the average business user? We have become the product indeed. But financial data is different. It represents what we value. 

While many financial service providers have leveraged financial transactional data and predictive analytic tools — credit providers and credit card issuers especially — the industry has more often done so with the goal to sell you more services and drive greater revenue — some much more aggressive than others. But now, more than ever, we need to leverage financial data with a different purpose in mind. 

The value of data to connectivity and purpose 

You’ve likely heard the old adage doing well by doing good. 

A phrase often attributed to Benjamin Franklin, it suggests that there are alternative paths to create a win-win for all stakeholders — and this is especially true for the financial services industry now inundated with a host of external challengers with, perhaps, very different objectives in mind. 

What if the power of data could be used to create broader economic stability rather than selling ads? What if our business model evolved to leverage data purely to promote financial wellness for every customer we are privileged to serve? What if every piece of financial data became a new marker toward deeper systemic financial success across our communities, across our global society? This way we align the goals of the consumer and business with that of the financial institution — through positive financial outcomes.     

This is the financial industry’s last, lone superpower: purpose.  

The alignment of long-term goals 

When we think of money experiences, we must deeply understand the financial needs of our customers. That starts with clean transaction data, solid analytic tools, and experienced partners to unlock new value through this data. The data around financial transactions is about exchanging value (our money derived from our labor or investments) with something more tangible (a need or want, a good or service). 

Financial institutions, especially ones that offer broad aggregation services to provide insight across any financial providers a customer may choose, are in the best position to create significant insights around these money experiences. They are also the most trusted provider for advice and support in time of need. 

It’s time we think about banking-as-a-service as the service we provide to our customers through their data.

How could extended money experiences improve our lives? The industry has a responsibility to help the exchange of the trust and loyalty our customers provide with something more beneficial to more parts of our lives — or someone else will. Financial data is an enabler, it is part of what we do, who we want to become — we need to find ways to leverage aggregated data to assist more of the aggregated humanity. This helps create a new system of value. 

This is how financial brands can break through the competition: Make our lives better and easier, and create a purpose around the financial success of these relationships over the long term.    

From neobanks to superapps to new forms of value  

How do we focus on driving long term financial wellness as more non-bank providers move towards the platform model of data exchange designed to drive further consumption? By doing the opposite. 

While large platforms like Gojek and Grab focus on convenience (you can order food, transportation, and a variety of services) and often combine these with an embedded merchant network to facilitate easy payments and access to credit, these platforms more rarely promote components of financial health. 

Ant Group may be one exception, as they (along with Tencent) have helped create ways to save and invest and have driven financial inclusion. But what about the U.S.? While many financial institutions aspire to help the community they serve achieve financial success, the industry is inconsistent. And this must change.

Consider the ways your financial institution could further leverage financial data:

• Focus on building opportunities for our customers to save more at every opportunity (providers like MX can help your customers understand the impact of spending, and help them free up needed cash to help them during moments of financial need).
• How are you helping your customers save and invest? You do this by freeing up money by analyzing spending. Why is the industry not taking more ideas from fintech startups like Acorns or Betterment, and making building wealth a more pertinent part of your purpose? 
• Help customers better understand their income flow, especially in times like during this pandemic, and especially for customers whose work is more transitory, like gig workers through partnerships with innovative companies like Stoovo or Steady. 
• What are you doing to help your customers become better skilled, increase their opportunity to earn, or become better educated? The more they earn (with your help), the more we create a long-term win-win loyal relationship driven by purpose. 
• Consider how creating a subscription model around a package of products and services, both sourced internally and externally through partnerships, can create real value for your customer and develop real brand differentiation for your institution. Check out Aspiration.
• How can we leverage financial data to understand the impact of the subscription economy — all those streaming services, along with growing internet and utility bills? Working with companies like MX, and with services like BillShark and Truebill, we can help reduce the impact of these expenses by reducing them or removing ones no longer needed. 
• How do we build out transparency in the use of credit? One way financial institutions can do this is by putting all available offers perpetually in front of their consumers, as banking partners of the company CuneXus does, in order to be top of mind and always available to help customers and members know where they stand. 
• How do we leverage the power of artificial intelligence and data to safeguard individuals, especially older adults, from financial exploitation? Developed by experts in aging and fraud, EverSafe's algorithms help guard against scams, fraud, and identity theft.

Beyond new ways to purposefully leverage financial data, how are financial institutions part of the conversation around regulatory changes that impact their customers and their long term financial wellness? How are more industry players advocating at their local, state, and federal levels? How are we fighting for better financial access, stronger data protections, and fairer financial conditions — from how taxes are structured, how different types of government services can be more inclusive with consistent application of financial laws and protections across all communities? Look at companies having impact like Propel. 

We shouldn’t rely on industry lobbyists for something so vital to our communities, especially as more fintech startups are working with regulators at every level. We shouldn’t concede our relationships to outsiders. 

The time for a movement is now

There are innumerable ways for financial institutions to offer more value through financial data and through financial actions than what technology platforms do through their ecosystem of apps. 

That’s not the problem with banking — it never has been. 

It’s the mindset around what the purpose of banking is truly about. It’s about the way leaders across thousands of financial institutions think about the people and communities they serve — and their ability to act and evolve, and build new forms of value that will redefine what this industry stands for.  

How can we, as in industry, remain relevant as more options become available every day, and more and more financial activity slips to another suitor? How can we make banking better? 

By focusing on our customers and ways to improve their financial condition. 

Every single day.  

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For more information on this topic of extended finance, we suggest you look at MX’s Ultimate Guide to Money Experience, Ultimate Guide to Open Banking and Ultimate Guide to Bank APIs. This article is the result of a paid partnership with MX, previously published here.

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Unconventional Ventures helps drive innovation to improve systematic financial wellness. We connect founders to funders, provide mentorship to entrepreneurs, strategic advisory services to a broad set of corporates, and broaden opportunities for diversity within the ecosystem. Our belief is that anyone with great ideas should have a chance to succeed and every voice should be heard. Visit unconventionalventures.com to learn how you can partner with us today.