In Part 1 of this blog series (which you should read because it’s awesome…and because it sets the stage for this one), I laid out how the densely packed banking singularity erupted in an explosion of financial services over the 2010s, i.e., the Birth of Fintech.
This chaotic upheaval of financial services spawned a bunch of specialised products for everything from payments to investments. And while these products, by virtue of their focus, were superior to their traditional counterparts, the overall experience (as far as our financial lives go) was still disparate, confusing, and ultimately not as beneficial as we’d hoped.
Don’t get me wrong – this unbundling was important. We owe it everything. Much like we owe our existence to the Big Bang and the billions of years of chaos that followed. But much like the Big Bang, we are now at an inevitable point in time – when the chaos has lasted long enough that we’re beginning to see moments of order within it.
Welcome to the world of self-organized fintech. Welcome to Neobanking.
The theory of all things money
The fintech services from the decade gone by have done us a ton of good. We have slick payment apps whose rewards are like little kicks of dopamine; lending apps that have made small credit lines so much more accessible; and even trading/investment services that cut out the middleman while also giving you a beautiful UI to DIY!
But for all the success these services had in improving the experience of a single thing, they largely failed to generate enough interest to change how seriously us 20-somethings took our financial lives and security. And the reason appears to be simple – too many disparate apps that really don’t make managing our financial life any easier.
Imagine a service that not only tracks how much money you’re making and spending every month, but can kick up your investments if you have a little extra coming in these days. Think of an app that can take a look at your savings accounts and the projected returns from your investments to tell you if it’s a good idea to get a loan for that new car or bike right now.
Picture a single, unified service that is able to take into account your goals and your finances – all to help you make better financial decisions. Day after day. Month after month. That level of decision-making is only possible with a holistic view of your money. And the ability to make decisions based on such a holistic view is what has always set the financially savvy apart.
If chaos is beautiful, order is helpful
Look, I’m not one to bite the hand that enables you. Whether it’s the e-wallets, UPI apps, easy credit lines or mutual fund apps – focused fintech products have not only set the tone for what financial services should look like in the future, but more importantly, set expectations about their experience in our—the consumer’s—minds.
But as these services evolved, so did our 20-something minds and needs – from the let’s-wing-it-neanderthal to the think-it-through-sapiens stage. We are increasingly looking to either clean up our financial lives (if you’re fortunate enough to have one) or seriously get started on building one (if you’re an ignorant fool like I am).
And what we need in this situation isn’t more products – what we need is help. That’s why the “better way to do X with your money”services from the decade gone by are now, slowly yet steadily, giving rise to “improve the experience of N things for your money.” The purpose? Firstly, to help us make sense of everything that’s at our disposal; and then, to help us make better use of it all through contextual, data-backed suggestions.
In it for the long, wide run
The rise of such services will be far more significant than just having a good-looking new app on our phones – it will mark the arrival of new-age 360º financial partners, much like the banks of yore, that will stick with you through your various, changing needs.
As you go from needing small credit lines that ease month-end woes, to thinking of more serious loans for bigger things in life, these services will help you make better decisions instead of leaving it to you to figure out the best course of action. They will understand that as your life and needs change, so does the importance of everything from investments to savings. And they will use this knowledge to channel your money into the right places.
One view to rule them all
Let’s face it, the
older we get more we grow, the more we realise that big expenses are like a game of dominos – you have to be able to assess what that expensive car/superbike loan is going to mean for your finances and life over the next few years. The only way to do that is to have your investments talk to your savings accounts; and the only way to do that, is to have it all in one place.
Neobanks will combine the products we’ve come to appreciate with a unifying experience that we’ll love, all to create a well-organized financial services system that’s able to address various needs at different stages in our lives. It’s banking, but with the touch of the technology born out of eons of chaos.
Fragile ideas and delicate balances
The fact that you and I exist and are reading this is a matter of chance and sheer luck. The theory that everything aligned just right for our universe to have worked out the way it has, is rarely contested. And despite the systematic formation of fintech clusters being akin to the rise of galaxies and solar systems in the cosmos, that’s about where the analogy ends.
Because in the end, realising this grand idea and vision means unifying a multitude of complexly architected and heavily regulated services. And unlike with the universe, this unification will have to be a carefully orchestrated act – not a matter of chance and sheer luck.
For the upcoming universe of neobanks and financial super-apps, doing things right will involve walking a thin line between being conservative with product unification (while risking the rise of more unbundled services), versus trying to do it all at once (only to have several services with a poor experience, which is banking-square-one).
While the idea of what a neobank can be sounds wonderful, the reality is that this idea is far too nascent to be able to deliver on all hopes and dreams from the get-go. As neobanks begin to crop up and serve a new generation of users with whole new modi operandi for life, they will need to start by understanding what’s truly broken, what’s good to have, and what existing systems don’t need fixing because they really aren’t broken.
And there’s no better way to do that than to talk to the consumers we’re building for and ask them what they struggle with. To paraphrase David Veléz of Nubank, the secret is in understanding and solving problems, not asking people to come up with ideas. You tell us what you need, what’s missing, what’s broken; we take the time to understand the problem and build a solution that adds real value.
This is not an easy path. Neither is it a short one. But when it comes to your money, aren’t we all in it for the long run?
And a shameless plug to boot
As I write this, I wonder about Jupiter – what we’re going to launch with; what you, our community, will have to say about it; and how we’ll evolve in the months and years to come. Jupiter is one of the first ‘moments of order’ that you’ll spot in the aforementioned chaos of financial services. But we’re going to be a lean, clean financial machine to begin with.
As we grow, we want you to tell us what’s missing and what is (or might be) becoming irrelevant. You’re our balancing stick as we walk that thin line. And if you’d like to help us do a stellar job (so we can help you do stellar things), join us on the Jupiter Community to share your problems, thoughts and, yes, even ideas. Our product team always has their ears to the proverbial ground.
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