A company called ThinkBanking is offering no-thrills bank accounts to residence of the UK under the brand Thinkmoney. These bank accounts can be opened with little hassle, no credit check and with no penalty fees. Royal Bank of Scotland provides the deposit taking license and the associated debit card is issued by the Newcastle Building Society. This means that Banking (the company), can focus on distribution and client service. I am not sure how popular the service is, but am convinced that a need exists for a different kind of bank account, even in a mature market like England. Access to the account is provided via the Internet, but not via mobile as far as I could ascertain.A number of lessons for transformational banking in emerging markets can be taken from this initiative:
- It is possible to design and deploy a banking product without holding a banking license, by making use of other banks regulatory compliance.
- New generation banking is about service, banking features, distribution and branding. It is important to think out of the box when offering new types of banking services.
- Bank accounts can be opened legally with very little hassles and even remotely (I am not sure if Thinkmoney does this). Much of the red-tape associated with opening bank accounts with mainstream banks are not required legally.
1 comment:
I believe this represents a double-edged sword:
- I agree with your assessment that this reduces the red tape required with the opening and maintenance of a bank account, thereby improving the overall customer experience
- However; the legislation that led to the red tape does serve a purpose. I do not necessarily agree with how it is implemented, but I do believe in its requirement.
In the US, a key source of the real estate crash was that the sales and marketing of financial products had been separated from the agency carrying the risk by use of CDO's. This represents an operational version of the same, where Banking sells products but does not carry all the risk.
All that said, I agree with your overall comment that there is a need for a fundamentally different kind of account. One that is simple, inexpensive and no-frills.
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