The final interview with our Nordic Connection Festival companies is with the winner, Meniga (I was not a judge!). I spoke with Bragi Fjalldal, CMO & VP Business Development, about what the company is doing these days, particularly with sustainability.
Tell me about Meniga. What is the company?
Meniga is a mission-driven, purpose-driven company. You could say that our mission in life for the past ten years has been about helping people lead better financial lives and, with our new product, we are minimising carbon usage, so you could say we are also helping people lead more sustainable lives.
We are all about helping banks and helping people. It’s about enriching transactions, and it’s about bringing insight to whatever you can build out of transactions to help people with their finances. That can mean a lot of things. It can mean PFM, business finance management, cash flow management. It means insights and notifications; it means rewards; and now it also means carbon insights.
We are a ten-year-old company and have been in the B2B FinTech space for as long as we’ve existed. We have survived a few ups and downs, and now we’re fighting through Covid like everybody else, but we remain optimistic about the future and excited about the change that’s now happening in the market.
We are around 150 people, born in Iceland but now a UK company headquartered out of London, with our biggest offices being in Warsaw, Reykjavik, Stockholm and London.
What is PFM to you?
I think PFM was super exciting as a term when we coined it together with a bunch of other people ten years ago. Then it became a little bit tired, because everybody implemented it as PFM in a tab where you go and analyse your transactions. It is now becoming a little bit current again, and people are asking for PFM.
To me, PFM is about just that, you know, helping people manage their finances and that can be done in a boring and unintuitive way – there’s a lot of tools out there to do that, Excel is one of them – but it can also be done in a way that’s seamless, fun and engaging. That’s where PFM has a little bit of a rebirth, I think. Partially through some of the banks leading the way in how it can be done. I’m referring here to some of the challenger banks like Revolut, Monzo, Starling and N26. One of the things they have done, and showed with the engagement they’ve had with their users irrespective of what you think about their business case, is that people like to be engaged in a way that’s fun.
That is what you can do with PFM tools. You can make savings goals a fun challenge, just like Fitbit and Strava have done in the fitness sector. That’s what’s given PFM a comeback. When you say PFM it’s almost too much. There’s so much in it. I just look at our toolbox and the average customer implements maybe 20% of what they could use, but nobody is implementing the same things.
I know you’re working with some big banks, like Santander who I’m a customer of, but I don’t see them offering these tools to me as a retail customer. What’s the issue?
It’s different from bank to bank. Santander is an old customer where they’ve rolled our solution into three or four countries, but Poland and the UK have not yet implemented our solution. That’s something we’re still working through with them.
Sometimes with a business like ours, a B2B FinTech, we make an agreement with a bank in a particular country and sometimes we make a global agreement. We made a global agreement with Santander and sometimes, when you do that, some countries are more receptive about doing these things than others. For example in the UK, three or four years back, they implemented something that wasn’t particularly successful, and it’s hard to break that mentality when people have personal pride in what’s going on and sometimes it’s politics. Santander is definitely an account where we could do a lot more than what we’re currently doing.
The issue is that I can see the new challenger neo-banks doing great analytics around lifestyle and the old banks, because they’re on systems that only record what’s happened and not what’s going to happen, just don’t tell me anything that’s informative or worthwhile.
Absolutely. I think one of the tools that we’re now bringing to market, cash flow assistant, is one of those forward-looking tools. We’re basically predicting transactions, we’re projecting cash flow, so that you can get a notification before you actually go into below zero and you can actually take action. Those types of products are what’s required in today’s market to really stand out.
It’s been a long time coming but you know what it’s like with banks. When we go and present something at a bank and people love it, sometimes there’s a lag of three years before you actually see those things come to market. When we pioneered the activity feed, it took two years before somebody picked it up and now cash flow assistant is live and a few banks, like UniCredit, now have it in implementation.
These are the kind of things that really go the extra mile.
I’d also say, if you think about stuff that makes your bank a little bit informative such as categories in the transaction, showing you an overview of what you spend every week, giving you notifications and warnings, it’s simple stuff. Sometimes banks paint these things as huge projects, and won’t do anything unless it has artificial intelligence or something similar attached to it. In these instances, they sometimes just don’t’ notice the simple things they could do that would make a difference.
Think about the first versions of Revolut and Monzo. They only had that simple stuff, but it was cool and it was interesting because the banks didn’t have it. It’s not rocket science.
Another interesting point in Meniga’s development is starting with the basics of allocating financial lifestyle to buckets of how you’re spending on entertainment and food and travel to the more nuanced analytics around how you could actually save money, spend smarter and live better.
It is a journey. Nudging and helping people gradually improve their life is our mission, and it’s not achieved by asking people for a lot of interaction. It’s about getting people at that moment in time, and slowly nudging them towards better behaviour. That’s what I would say our most progressive customers are doing.
For us, it’s a journey. It’s not just implementing Meniga and doing some other thing. Instead, it is about looking at everything from a customer perspective. Banks need to be looking at Amazon and Facebook and these guys that are taking a standing point like ‘what are we to our customer?’
When you look at personal banking, what are you holding for the customer as a bank? Apart from their deposits you have their transactions, and transactions are so much more than just transactions. A sequence of transactions are basically your life.
Banks should be viewing it like that. Banks are the custodians of peoples’ consumption profiles, which means that they can start on a journey of categorisation and mapping. Then you can start helping people with more advanced things like the Meniga challenges, which are based upon the Fitbit and Strava incentivisation things, and then cash flow management and now things like carbon offsets.
It’s all about starting with getting better financial reporting for the customer, and then starting to tap into the more purpose-driven part of life and using banking to make customer spending more sustainable. That’s how we keep innovating. What can you do with people’s transactions to change their lives? In my opinion, that’s what banks need to think about being.
I like what you are saying about purpose-driven banking for example, and I really buy into what you are saying. I always like how optimistic you are.
In that context, I’ll tell you a little story about our carbon product, because we developed our carbon product before Covid. We had a marketing campaign that was going to be the full shebang and then the world basically stopped. We thought let’s not push our sustainability product on bankers while their house is burning, so we put on the brakes and then had some time to think about it. Nobody knows how this is going to play out, and Covid is kind of here to stay. Things are not going to return to the old normal but will turn to the new normal and we don’t know what that looks like.
We thought, look, Covid is kind of a wakeup call and we’ve just been shown how vulnerable the world is and how vulnerable we all are. Our bet now is that people are going to really start thinking about sustainability, about pandemics and about the environment. People are going to hear a lot about these things, because we’ve just been thrown back to the point of thinking about the survival of humans and so we need to think about these things. The sustainability movement was already there but I think consumers are going to be thinking more and more about these things.
We had already started up in June talking about carbon and I was positively surprised by how receptive banks are to these types of product now. I really feel like the next decade will be the purpose-driven banking decade. I don’t know to what degree that’s going to happen but we’re betting on this product because we believe that could really happen.
How do you see Open Banking and how banks are dealing with this as an opportunity and a challenge?
To some degree, I would say the whole Covid situation has accelerated the journey to Open Banking. Banks are always looking for excuses not to do things that they really have to do, on the back end. People are starting to work remotely and that pushes part of their business more and more onto the cloud. I’m still worried though that now banks have been given all sorts of excuses to focus on the core working on other things, such as better customer data analytics, goes bye the bye.
How much is the regulator going to pressure that transition?
My concern is how fast that’s going to develop but again, the proof is in the pudding. We’ve been in this business for ten years and the vast majority of our installations are on-premise, because banks want them to be on-premise and they don’t want to let personal data move into the cloud. Our solution has been ready for many years to be in the cloud, and we have three or four installations. but it’s still not common. Even today in the RFPs, most of the new projects we are looking at are still driven by on-premise demands. So, it’s a journey.
One of the big questions is: will Covid accelerate or slow down these changes? I don’t have the answer but I’m curious what you think.
I keep saying Covid has delivered 2030 in 2020 as in, a lot of decisions that banks were sitting around thinking about are being made on the hoof much more rapidly because they’ve had to be made.
It’s ironic that this summer has been one of the busiest summers we have ever had. We have gone live with four customers since Covid started. I was kind of surprised; it doesn’t apply to everyone but some of our customers were actually quite quick in switching, so we’ve managed to finish the development with them remotely. It doesn’t apply to all. Some of them, like UniCredit for example, just took a couple of weeks and it was working. I know that’s not everyone’s story, but there are some positives here.
You’ve said in some of your blogs, it’s not like we’re all just going to jump on a plane and fly as much as we used to back in the days. These types of conversations whether they’re conferences, whether they’re collaborations or just conversations can take place remotely.
What been the reaction of customers that you’re dealing with to the idea of having carbon offsetting being an important part of financial operations?
Let me start by saying why we are doing this. Financial institutions play such an important role in society and in our lives, and we think that comes with a lot of responsibility. You need to step in and step up at some point.
We feel like the environmental crisis is a tangible area where banks have such a huge opportunity to make a difference. Banks that do that in the right way will be rewarded for that.
I can say this with some confidence. I spent a good part of my career in sustainability. I used to work for Vestas for many years, leading on wind turbines. I was working on an unorthodox part of that business. I was working with corporations. I was trying to influence strategies. I was building our business with corporations. I was selling power plants to Google and IKEA and others.
My opinion here is there’s this whole sustainability movement, and to much of the idea of corporate responsibility is focused on doing less bad rather than more good. Just doing more good is so much more fun than doing less bad.
CSR is too much of a side business, whereas companies need to find more ways to turn sustainability or corporate social responsibility into the core of their business. That’s how it’s done in the best way and it’s also, in most cases, the most cost effective and revenue driven way of doing it.
Doing things as a company, reducing your footprint, flying less and all those things should be done, but you really need to take it to the next level. You need to find the sustainability in your business.
For banks, we can do things like reinvesting and having green wallets and rewarding people for buying electric cars and giving them better financing and stuff like that. I think this idea of helping people build awareness around the footprint of peoples spending, and then giving them the options to act upon it by changing their spending or by offsetting, could be super powerful. You have the opportunity here to start a whole movement.
The final thing that got us to believe in this is that people actually want this more than you think. There are so many surveys out there where people are talking about wanting to understand the social and environmental impact of their actions. There are some surveys where people have been asked whether they want banks to provide it and they do, when they are asked.
We did our own survey among our users, where more than 80% of people really want to understand their footprint and more than 70% are interested in somehow having options to offset it. It’s a super interesting area and it’s one that is in Meniga’s core competence as we are enriching transactions and once you’re enriching the transactions, finding the best possible way to build that into the user experience. That’s going to be key.
We’re not the only ones doing this. The key to whether this is going to be successful or not is how is this built in however. It’s just like PFM. If you want to make it mainstream, you have to build it into the user experience in a way that’s seamless and intuitive.
There are plenty of carbon calculators where you can spend forty minutes understanding how much you spent last week, but that’s not it. You have to cater to the enthusiast by allowing for input, but you really have to make the user’s experience totally seamless.
If we are talking impact here, we have to do now what everybody is doing, which is carbon footprinting, but we need to think it further. We need companies to have a vision here, because you have to then go from awareness to action. In an ideal world, people will change their behaviour and they will do things differently in order to reduce their footprint, but we shouldn’t dismiss carbon offsetting. I know that some people feel like offsetting is a bit of screen washing but honestly, if half the banking institutions in the world would be supporting renewable energy projects in Africa or deforestation projects in the Amazon, they would have a massive impact. That’s the kind of impact that banks can drive with a product like this.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...