There are now so many digital lenders being launched that it can be hard to differentiate one from the next. Most offer better interest rates than traditional banks, low foreign exchange fees and cashback protected by regulators and conveniently accessed through one mobile application.
But the point is now being reached where, for digital banks to stand out from the crowd, the benefits of banking digitally are becoming blurred by gimmicks and ploys to get users to sign up.
In October, neobank Moven patented the technology behind its new financial wellness app, which covers "methods and apparatus for promoting financial behavioural change". Rather than giving you a breakdown of your spending habits retrospectively, Moven's patented technology can give advice and insight in real-time – when a transaction is being carried out by a user or even when a user indicates that they want to make one.
This is similar to being told that you won’t be able to raise a deposit for a house because of all the avocado on toast you’ve eaten – and we all know how well that went down
The app can also direct them to additional services, offers and discounts, to create "a cycle of positive behavioural reinforcement" and financial well-being with the overall effect to encourage "responsible spending and saving behaviours".
Has Moven gone a step too far? Financial wellness is to be encouraged, especially if it stops individuals getting into debt, which can have a devastating impact on mental health. But the way that Moven's new financial wellness app works borders on the patronizing.
Red flashing notifications tell users if they will end up spending more money than usual that day, threatening financial and savings goals. Instead of nudging users in the 'right' direction, notifications such as these can feel judgmental – aggressive even. Do people want to be violently warned in red every time they might be spending more than usual?
This is similar to being told that you won’t be able to raise a deposit for a house because of all the avocado on toast you’ve eaten – and we all know how well that went down.
And what about all the data that the app will have access to, which will not only include spending habits but also which nudges and messages were able to influence you in a completely different direction than you initially envisaged. That would be valuable indeed.
Of course, if you don’t want an application to judge you on your spending habits, then don't use it. But the introduction of this technology might mean that others avoid Moven altogether.
The bank has strong credentials. Established in 2011 by financial services "influencer" Brett King, it was a first mover in the online banking revolution. Since 2016, the bank has white labelled its technology and works with banks including Westpac and BCA. It is obvious that banks are keen to tap into what they have on offer. But when it comes to judging spending habits, perhaps its best for Moven to leave this out of the equation.