There’s always been change in the financial sector, all the way back to exchanging notes for pieces of gold. The arrival of fintech (integrating new technology into the financial sector) is no different to this, but are the latest developments in fintech a step too far? ANNA, a startup launched last September, recently introduced “the world’s first miaowing debit card”, featuring the firm’s mascot Pickles, who miaows whenever you pay for anything using contactless. Sadly, the sound comes from the accompanying phone app as opposed to the card itself, and while ANNA has a very creative and personable interface, it’s actually for business customers only.
The vast majority of these new players base their business around a functional mobile app, offering spending analytics that few of the incumbents can match. All offer some way of setting budgets for different types of spending, while N26 and Revolut allow you to separate your savings according to what you want to save up for. The closest a traditional bank has come to this is Santander’s Wallet app, but this doesn’t allow for budgets to be set and the data available is far more limited.
It has become obvious that there is demand from consumers for the ability to process their own data
Fortunately, the recent development of open banking allows customers to take ownership of their data to other apps in the industry such as Emma or Yolt. It has become obvious that there is demand from consumers for the ability to process their own data, and if traditional banks don’t provide this in their own apps then fintech firms are ready to step in. Many of these apps are also free to use, although your data may be used to target offers and discounts at you through advertising, with the app taking commission on anything you buy.
Physical cards themselves are changing too. Both N26 and Revolut offer metal cards to their premium customers, while Starling Bank has a portrait-oriented card with a minimalist design aiming to reflect how we simply don’t swipe our cards anymore. Monzo’s vibrant shade of coral has become perhaps its most iconic feature. The fact is that new firms are investing more time and money into the design and appearance of their cards, attempting to make the humble debit card a product to be treasured and or to offer a level of prestige, such as that typically associated with premium American Express cards. This contrasts with the methods typically used by traditional banks – with Natwest and Halifax among those who used to allow customers to personalise their cards with pictures, a service now only offered by Barclays.
Some of the features offered are very unique. Revolut allows users to instantly buy and sell cryptocurrencies, Coconut offers estimates of how much tax a sole trader may have to pay at the end of the year, and ANNA can create and chase up on purchase invoices. Monzo and Starling also offer features that allow you to control certain spending habits. A “late-night spending” feature on Monzo forces online purchases after 10pm to be reviewed by a push notification and gives the option to cancel the transaction up to 24 hours later. Users can also turn on a block on gambling purchases and can only turn it off after 48 hours and after discussing it with a member of Monzo’s team.
New firms are investing more time and money into the design and appearance of their cards, attempting to make the humble debit card a product to be treasured
Some issues still persist – certain providers such as Plum and Chip don’t have the £85,000-worth of FSCS protection, so if the bank that is used by these apps to store your money goes bust, then you may lose out. Revolut has faced a number of controversies in recent months, such as disabling a system designed to combat money laundering, being accused of poor hiring practices and a high worker turnover, as well as a “single-shaming” advert on the London Underground, perceived by some as an intrusive use of data.
The perks offered by traditional banks such as railcards and up to £100 free of charge may entice customers, but the newest fintech startups hope that you’ll find miaowing, colourful cards and detailed analytics the purr-fect alternative.