Digital Money Management 2.0: Moving From Utility to Value


Going to the bank a decade back was a task. Apart from physically going to the bank, one needed to ensure enough time was allotted for the entire process. The process was almost pre-historic from the age-old token system to three different bank counters based on the customer’s need. Banking has seen a fast over-haul with penetration of ATMs, Online and Mobile banking over the past decade, but its not only about technology, its about how quickly consumers can change their behavior to match the needs of the new technology. The proof is that while there is a large-scale penetration of the usage of ATMs; the same is not true for mobile and online banking. Only 18% of banking customers actually use mobile and online banking. This begs a question: How come ATM usage was so rampant, while online and mobile banking is still catching up?

The answer is in the core of human behavior. We will only change for something that can provide a value higher than the effort needed to make that change. ATMs worked because they saved time, were easy to use, and allowed the customer to not go through an elongated process to access their money. Maybe, customers still don’t feel it is worth it to make the effort for mobile and online banking. There is a steady increase in the usage of these two innovations, but nowhere as close to the speed at which ATM behavior evolved. With an average population age of 24, India is seeking easier, value adding banking solutions, but unfortunately today, banks are focused on providing only an eased utility, not an enhancement in value.

Fin-tech solutions need to address the intrinsic need of the new generation. The generation, which fell in love with brands like Apple, a generation who doesn’t need a TV to watch their favorite show, and generation who would rather post on Facebook, than pick up the phone and call. At the core of every technology innovation is the customer, the customer, today, is unlike any other generation in the past. The demand of speed and convenience; it is not a value add for them but an expectation from any product. The generation thirsts for solutions, which are sexy, yet simple and provide a sustained value much after the use of the product. The definition of value has changed. It’s not only about speed, but also about insights, and how a product has changed my life for the better. Strengthening this premise, a recent Accenture study listed Platform Economy as one of the five key disruptions of the next few years, while CISCO expects the Indian smartphone market to explode in high-paced growth over the next four years. With financial transactions and activities being a large part of our regular routine and smart phone platforms being an important part of a consumer’s life, a large opportunity for product, technology and process innovation in the fin-tech space has just opened up even further!

In the current consumer environment, the fin-tech space can seek a great potential in connecting the consumer and its bank through a platform, which not only provides utility but sustained value. This has the ability to create large sector by itself, and the USD 22 billion e-commerce segment in the country only further strengthens this hypothesis. This is not unmasking an opportunity that was unknown, but would be correct to say that only a few products have gotten this right.

Most of the major banks have tried to align themselves to the new on-the-go consumer with customized banking applications and progressively designed web banking. The innovations by banks have certainly helped save time, but there is a long way to go before they can wow the consumer. Fin-tech solutions need to enable decisions for consumers through data and insights customized to their specific financial behavior and history. The opportunity of using this data to improve the overall consumer experience from a usability and experience perspective is immense. Data-driven insights and intelligence have the ability to go from mere utility to a ‘wow’ experience. This can provide a big return for not only the consumer, but also the bank or financial institution. It’s about bringing an intuitive environment to fin-tech solutions, where a solution is not a product but an extension of the person; a guide, advisor and mentor in making financial decisions. This not a pipe dream; it has happened in the online shopping space and even a video-platform like YouTube uses data to recommend entertainment experiences to its consumers, so why can’t the fin-tech industry wake up a smell what’s cooking?

And this is not only for the current banking population, but also for our next generation. In a recent survey, more than three quarters of adults in India do not understand basic financial literacy, and even more disturbing India as a country was ranked number 14 on a list of 15 developing countries on understanding financial literacy in a research commission by global payments leader. Fin-tech solutions can not only ‘wow’ the consumer and be a lucrative business proposition, but it can spark social change in society. We can use innovations such as these to climb up the ranks and become a financially literate nation. This is sustained value, and this is the opportunity that the fin-tech sector is faced with.

Great innovations have been borne by trying to address or solve a very simple problem through technology upgradation and improved process. We developed Slonkit, a tool to help children and parents monitor, track and develop good financial basics, came from. It was to address a problem of wanting to teach children the basic of finance and enable parents to give an environment of controlled financial freedom to their children. There are many problems such as this, which still exist, and many attempts to solve these problems through technology still remain at a measly functional stage. The fin-tech industry and innovators need to step, and there has been no better time than now.

The banking experience has surely come a long way, but there is a definite scope for the next level of innovators to take it to the next level. Apart from addressing the functional advantages of technology such as convenience and speed, fin-tech solutions can move to changing the user’s life for the better. There is a scope for large-scale innovation to address various problems in the financial behavior of our nation’s current and future customers. We have been struggling for decades to find and explore different ways to manage our money better and more efficiently. With an increased purchasing power and easy credit, a financially illiterate consumer can spell huge problems, and applications such as Slonkit along with others are trying to create a positive change in the way the next generation will manage their money. Every fin-tech solution needs to focus on three major aspects simplicity of use, convenience in using the solution and delivering data-driven insights customized to the consumer. If the industry can make this change in approach, we would truly move from creating functional utility driven solutions to intuitive value adding ones; the type of solutions which will enable a adoption, not because of high-scale marketing and visibility, but sustained value.


About The Author:

Murad Nathani is the Co-Founder & Chief Executive Officer at Slonkit. Slonkit brings the first of its kind system (a mobile application connected to a VISA card) that allows parents and children to begin the conversation on money and make the conversation a part of their daily lives. It also helps parents to guide their children to good money habits – a life skill required to build a better future.