Do the maths

In today’s financial market, keeping track of our personal finances across several different providers can be tricky, tedious and downright discouraging. But, according to fintech boss Samantha Seaton, all we need is a gentle ‘nudge’ in the right direction– and she intends to give it.

The CEO of UK-based Moneyhub Enterprise is on a mission to harness technology to change our experience of financial services and management for the better. If spreadsheets and investment portfolios set your head spinning, then it’s time to rejoice.

Moneyhub builds digital financial tools for customer-centric organisations. From implementing the revised Payment Services Directive (PSD2) to fintech solutions to support sales strategies, its technology platform is available off the shelf and ready to be switched on. It can also be developed collaboratively into a bespoke solution with ‘pick’n’mix’ application programming interfaces (APIs) to suit the specific needs of an individual or enterprise.

At the forefront of the Open Banking revolution, the Moneyhub platform consolidates accounts from multiple sources and providers into one place, giving consumers live insights into their financial behaviour and eliminating the complexity of money management with a human touch.

“It’s really about trying to help you understand where your money is,” explains Seaton. “What have you got? Where does it go? And what could you do with it that may be different to what you’re doing with it now? Ultimately, I would love for it to be able to help you know what’s the next best thing to do with your money.”

To be honest, it comes pretty darn close. Imagine an app that can give permission to make an automatic sweep from a savings account into a current account to avoid unnecessary overdraft fees. Or one that gives you a nudge when the time is right to move your investment. With an API that tracks every bank’s interest rates, updated at four-hour intervals, Moneyhub can show the optimum level of cash to hold in a consumer’s current account and tell him or her when to transfer the rest to the highest performing interest account on the market. It’s your personal treasury at your fingertips.

There’s no doubt that Seaton’s unwavering interest in people affects her approach to technology, right down to crowdsourcing ideas for what she terms Moneyhub’s ‘nudge store’ (insight analytics, to you and me).

Personalised smart nudges help users save money. A loan-to-value ratio nudge, for example, alerts consumers when they qualify for better mortgage rates. It’s a great example of her customer-first philosophy.

“The beauty of Moneyhub is that it is what I call segment agnostic,” says Seaton. “It doesn’t really matter how much money you’ve got, where you are on the journey, because Moneyhub is very personalised. We keep getting told by our users ‘we want more nudges, more insight’, so that’s the direction of travel.”

But how do you give more insight and nudges to people quickly and effectively? And, anyway, shouldn’t consumers be able to figure this stuff out for themselves? Can’t they just do the maths?

“I have quite a strong view that, for most of us, maths solves a lot of our problems – from when we start saving right through to our first bank account, to student loans, and trying to get onto a mortgage ladder or just pay our rent. If you look at the journey that most of us go on, maths would be able to prompt us fairly easily as to what we should be doing with our money to make the best use of it,” says Seaton.

“Therefore, I’m not sure why we’re not doing more of that. Why aren’t we trying to just help people in a very effortless manner? Just nudge you in the right direction. You don’t have to do it, but there’s no reason we shouldn’t tell you and make it very visible that this is a way that you could save money.

“It might be you’ve got a store card that you’ve forgotten is costing 32 percent.

There’s only £200 on it, but all these little bits we do poorly, with our admin and our money, do make a difference. And there isn’t an advice community out there that wants to help you with that. We’re just left to our own devices, so why wouldn’t we try and fill that gap with maths and technology?

“The way to do it is to use all the brains out there in our customer base. You should be able, if you’re technically minded, to write nudges and put them in the nudge store, which is then accessible to everyone, expanding our ability to create that insight.”

Seaton’s business philosophy, and that of her company, can be summed up by the maître d’ of a Singapore Hotel, who once told her: “In Sri Lanka, we put the customer first, and the money will follow.”

It seems as simple as two plus two equals four, but some bigger banks and financial institutions appear to be struggling with the concept.

“You’ve got an era of people running those businesses off profit and loss for so long,” says Seaton, an Aussie who has lived in the UK for more than 20 years. “Then you’ve got another group of people coming through, saying ‘we need to put the customer first’. And when the first group says ‘well, what does that mean from a revenue perspective?’ there’s this disconnect and that’s very difficult.”

Imagining the impossible

Open Banking means UK and European financial institutions are now obliged to allow fintechs access to the data and accounts of any customers who give their authorisation. Those institutions that are prepared to be agile, fast followers should reap the rewards, and enlisting the expertise and insight of specialist fintechs, such as Bristol-based Moneyhub, can give them a huge boost.

Nationwide, for instance, Britain’s biggest building society, is strategically investing in startups to support development of advanced products and services that can benefit its members in the future. And, towards the end of last year, bosses used capital from its £50million Venturing Fund to invest in Moneyhub, to help the banking giant ‘identify, learn about and explore new capabilities and technologies’.

Seaton says Moneyhub shows the potential of Open Banking, artificial intelligence-based data analysis and a customer-first culture to develop new financial products and services – and to power a step-change in how those services are delivered.

“I think some of the big institutions will start to look at customers more holistically, as people with needs that have to be met – not someone they sell a pension or insurance to. I think they will start to really broaden the remit.

“Take the self-employed, for example. This is a growing market with quite specific needs. It’s all very well saying they need to invest in their pension, but that’s not a group that will invest in pensions because they don’t want to lock money away. When you’re a freelancer you worry that if you have a gap, you’ll need to get your hands on that money, so it discourages you from long-term investing in any way, shape, or form, unfortunately.  Whether that’s right or not, that is their need.

“So, imagine if you came up with a pension, or a long-term investment, which meant you could also perhaps borrow against it if you had a year without work?

“Suddenly, you’d be like ‘oh, OK, well maybe I’ll put my money into that then’. And the thing is, most people don’t go without work. Most of them actually end up fine. But they get to the end of their career and don’t have a pension because they’ve never been confident enough to do it – but they could have.

“I think some of these things are going to start to emerge, which are quite different to what we’ve had in the past. And we need them.”

This article was published in The Fintech Finance Magazine: Issue #12, Page 38 & 39.