Insights

The Future Of Mobile In Financial Services – Kevin Mountford (Co-founder of Raisin UK)

Apadmi has worked with many leading names in the financial services sector, supplying mobile-first solutions that helped them mitigate many of the challenges of their industry. We pride ourselves on standing out from the pack through our sector-specific knowledge and constant research. 

Recently, the financial services industry has seen a lot of disruption from both Brexit and the Coronavirus pandemic, so we decided to reach out to an expert in financial services, Kevin Mountford, to discuss the future of the Financial Services sector, and the role mobile will play in its evolution.

Co-founder of Raisin UK, Kevin Mountford, is a financial services innovator and expert, with a history of leadership in the sector. Read on to learn more about Raisin UK and hear Kevin’s thoughts.

Getting to know Raisin...

Raisin was formed in Berlin around 7 years ago with three founding members; Dr Tamaz Georgadze, Dr Frank Freund and Michael Stephan. Their aim was to give German savers a better deal.

Continental Europe, generally speaking, has one set of regulatory guidelines and – in most cases – a single currency. There was a clear gap there to build a platform and attract banks from different jurisdictions, which formed the main premise of the business. Raisin has evolved and grown substantially since then.

We operate in multiple countries with a number of different platforms – including the UK one. In essence, Raisin not only gives the customer access to a wider set of banks and building societies in the UK, and the products they bring, but it’s also a marketplace. It’s a closed-loop operation – a single entry point, requiring a single application, and a single identification and verification (ID&V) check.

Once they’re into the Raisin portal, customers can move their deposits around and build up their portfolio. The really interesting thing is that it does create stickiness over time, so as we get more products to the customer, they build up their wallet size and Raisin becomes an efficient way of managing all their cash requirements.

In the UK, Raisin UK formed in September 2017, but we needed to re-brand and build out our new platform so we didn’t actually launch until the summer of 2018. Raisin UK is still at an early stage compared to Raisin as a whole. One of the things I focus my time on is trying to build the Raisin UK brand in both the B2B and B2C world – on the consumer side, it’s not only about a memorable brand, it’s important that we provide a credible service.

In the digital and mobile world, branding and UX will only take you so far – it’s security that customers need. Security and ease of use are two of our core USPs.

"Overall, Raisin has brokered almost €30 billion, has more than 320,000 customers, works with over 100 providers and is only growing."

The finance industry has changed

On a macro-level, there have been a couple of big disruptions over the last twelve months. Brexit we were aware of, but COVID-19 somewhat overshadowed Brexit in terms of focus until the closing months of 2020.

Brexit was important to think about for Raisin, especially as a German-based group. When Raisin acquired my old business, PBF Solutions, several years back, they were clearly already aware of Brexit and as such came into the British market with their eyes wide open. The UK is the second-largest retail savings market in Europe, so it was an obvious choice for Raisin’s expansion.

Raisin UK can operate independently, because of the ecosystem we’ve created within the wider business – in a sense, we’re a robust standalone business. However, there are synergies between the UK and wider Raisin businesses, which enabled us to integrate and draw from the core business when required, making us very flexible when dealing with the challenges of Brexit. 

Obviously, the one thing no one could have anticipated was the COVID-19 pandemic. 

"I remember that seemed to hit us very suddenly, when we didn’t know the extent of the problem. I was somewhat fearful when the March 2020 budget was announced. We saw the Bank of England base rate slashed (not once, but twice), and we saw quantitative easing come back in – I remembered the impact of that back in 2007, and was expecting the same again."

Luckily, the banking sector has learnt a lot of lessons from the 2007 crash, and it has become far more robust thanks to the stress tests and processes that regulators have gone through. We haven’t seen the sort of severity we saw back in 2007. In fact, since then, Raisin has grown at pace, particularly in the UK.

We’ve brokered over £1 billion deposits in the UK, a major contribution to the group. Strategically, the UK has become increasingly important – at the start of this year, we had one of our most successful months yet, building up customer numbers, inflows, partners and products.

I think we’ve got an excellent platform and, hopefully, that next £1 billion will come a lot quicker than the last.

The importance of mobile to Raisin UK

"I think that during COVID-19, there’s also been less use of mobile banking solutions as we’re not on the move to the extent that we used to be. I believe that once we get back to some kind of normality, we’ll return to mobile banking as our primary financial platform."

We were built with a digital platform in mind. We always knew that at some stage we would need to think about the mobile solution.

Unlike some neo-banks, we were never a mobile-first business – but it was always on our radar. We set a team aside, they built the app and it was launched in August 2020.

It was a natural extension of Raisin UK, but if we look at the user data we can see that increasingly now, consumers are using a mobile device to access Raisin – particularly in terms of the early stages of product research.

What you have to remember is that, unlike some products, a cash savings product is quite a considered purchase. What we see is that people often start their journey on a mobile device, but then default to a desktop or laptop to complete their purchase. 17% of our registered users now are on the app, and since we’ve launched, the adoption of the app has increased significantly. We saw in January that we had a record number of logins through the app.

There was a lull in banking apps in 2020, and this is quite interesting on a macro-level across the banking landscape, with the amount of neo-banks and mobile banks (Monzo, Revolut etc.) which have proven they can last over time, as the market has become somewhat cluttered. Having an app is one thing, but for us, the beauty is having both the app and our traditional browser-based proposition.

It’s imperative, even looking at some of the incumbents that have previously been built on bricks and mortar until now, that every financial institution has a digital and mobile strategy as part of a coherent overall customer proposition.

How mobile protects businesses from market disruption

We’re not building a business with a short-term view – we have to think of the future, so what we develop has to be sustainable and long-term.

The expansion into mobile with our app is a step in our long-term vision, but the product roadmap also has other priorities that we need to focus on. As our parent company has evolved, we want to follow that. What we’re doing now is for long-term success.

However, as consumer behaviour changed, it became clear that a move into mobile was critical. Hopefully, as we build out the customer experience and, on a wider-scale, build consumer trust in transacting on a mobile device, I would expect to see more growth in the mobile sector, especially when it comes to the completion or conversion of a sale through apps.

For now, having both a browser-based option and mobile option allows us to meet the needs of all customers.

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My predictions for the future of financial customer behaviour

The banking landscape is very different now. Part of that has been driven by the regulators who, going back to 2007, helped pull the power away from the big banks. Pre-2007, there was a much greater concern that, if a bank failed, it would have a much wider systemic impact on the financial landscape, leading to a catastrophic impact on the customer base.

The regulators opened up an environment through which businesses could apply for banking licenses – in fact, there have been around 20 allocated within the last decade. A larger market has created more competition, we’ve all then got things like PSD2 and data management through GDPR, and we’re now into an open banking and open finance market.

It’s creating a very different landscape – however it’s a kind of evolution as opposed to a revolutionary change.

Going back to the digital and mobile finance market, it’s very cluttered, and bear in mind there are a few risks there. One risk is that many people are using mobile finance for a secondary account. It’s critical for many of the neo banks that they start getting salaries paid in, regular payments going out and they actually have a deeper relationship with their customers. Without it, I think there’s a lack of loyalty. Looking at how the usage rates by brand have moved, there’s a high degree of volatility in the mobile market.

Overall though, the industry is in a good place.

"It’s not just having the right proposition, the right UX and the right security – somebody has to win through. It could happen through consolidation, but it’s more likely to happen through evolution."

I think we can assume that, as we come out of COVID-19, the impact on the economy may not be as drastic as we thought and as soon as possible we can get back to normality. But, whereas the banking sector was part of the problem, if not the problem, in 2007, I do think it’s part of the solution today.

Looking at consumers, the way they’ve used contactless payments during the pandemic, not just through their cards but also their phones, has increased rapidly, and the transaction size has also grown. I don’t think those behaviours will change – in some ways, I think they’ll speed up the transition to more mobile banking.

The landscape is different and I think it’s a very interesting time to be in the mobile finance sector. There are a lot of opportunities, and I can’t wait to see what the next two or three years will bring.

Raisin UK’s partners in finance

If we look at the partners within our ecosystem, on the one hand, there are our deposit-taking partners and there are certain aspects we look for in those. We’ve got a distribution network where, increasingly now, we’re able to integrate our API to create a white label solution – for example, we launched with AJ Bell last year and we’re just on the cusp of launching with another major UK partner.

When it comes to tech development, we have a very experienced and capable tech team. We built our own app in-house – firstly because we had the resource and capability to do it but, more importantly, we placed a lot of importance on the app as a business. We knew mobile would be a game-changer. However, I do sense today that internal development is quite unique and businesses are increasingly prepared to partner.

Across the FS industry, I think we’re seeing an increasing appetite to collaborate. Why go through the problems of recruiting and building within when you could find a partner, such as Apadmi, that can help to speed up that transition?

I’ve spent most of my life working in partnerships; I know time spent on the contract and everything else can be off-putting, but it’s a people industry. If you find an organisation you get on with who understands your goals, they can work with you and support you as well as, if not better than, an internal team. In most cases, the contract never even comes out of the drawer.

"I think the key is to find like-minded organisations that are fully aligned with your own strategy and the direction you want to take."

My priorities when developing a mobile solution

In this day and age, security sits at the heart of everything. You can build the most whizzy proposition, but if they’re not secure you’ll get found and your credibility will be damaged – possibly forever.

We’ve seen some of the biggest banks take this sort of damage particularly on the back of system outages or data breaches, and thankfully they’ve the legacy to protect their reputation, but I think newer players must focus on this. However, if there are going to be winners and losers, security should almost be a given – it’s the user experience & primary offering that sets solutions apart.

"It’s key to think about how your app looks and behaves too – what is the differentiator in terms of your proposition vs other apps on the market?"

Raisin was in a good position because they already had established a brand and business in Europe, with a good size of existing customers and partners. For us, the proposition and customer journey was a natural extension, but if you’re a newcomer or a mobile-first sort of business, you may need to look at it slightly differently.

Final thoughts: My advice to the financial sector

"We have a diverse population; people want things for different reasons.

From a big banking perspective, it must be really difficult, because you’re trying to serve the needs of everybody through multiple channels. This clearly requires an omnichannel approach, but I think the recent disruption in the market has actually made many of those large incumbent banks wake up and move quickly to catch up with their customers by offering more bespoke services.

With newer players, it’s very much around who you want to be and who you want to serve. You may be a specialist, but you’ve got to be the best in class. You do need a digital, and ideally a mobile, strategy – whether that sits alongside your normal channels or leads your business.

We’re seeing branches close and even the biggest players are moving to online – that isn’t going to stop. I think there will be a transition over time. Does that mean the high street will disappear? I don’t think so, but I think it will play a very different role. Certainly, there will be a shift in terms of the dominating factors.

I also believe that platforms like Raisin will create a change in the manufacturing and production of financial products. The banks and building societies will need to focus on their core elements, continuing to manufacture, but the way they interact with the customer may be through a marketplace interface like our own.

In all these cases, it’s no good just having the tools, be they digital or mobile – there has to be a strategic wrap-around. Because obviously the way that a service is marketed and the products that sit within that platform, as well as the ultimate proposition and differentiator, is still a key component."

Kevin Mountford, Co-Founder of Raisin UK
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