Prioritising customer choice leads the way for new financial brands
With the rise of digital banking and the constant fear of another financial crisis looming, financial brands like Klarna and Monzo are changing the way we manage our money.
After the recession in 2008, it’s no surprise that Millennial and Gen Z consumers have shifted away from credit cards. According to YouGov Omnibus research, 63% of respondents are worried the banks could cause another financial crisis. In this day and age, it feels that money is more hard-earnt, with that people want to have more control over their money.
This type of lifestyle has brought about banks like Monzo, which enables users to track their budget and spending habits, making it easier to save money. Along with the perks of monitoring money more closely, Monzo have made their app easy to use when it comes to, switching banks and freezing cards. Some things that can turn into a chore with the most established banks.
In modern life, having a clearer idea over finances that fits with a person’s lifestyle is the global trend, and the way it should be. CMO of payments at Klarna, David Sandström, makes the point “Why in a digitalised world would a consumer want to pay up front for a thing they haven’t seen and don’t know the real quality of? Why would they take the risk of all the logistics and potential hassle of returning stuff in a digitalised world? Why would a consumer be that disempowered?”.
Swedish bank Klarna is one of the companies that is giving the consumer more power in their purchase decisions. Whether it be an option to pay later (up to 30 days after purchase), to pay in three interest-free instalments or to cut the cost of the payment from six to 36-month payments.
London-based start-up Cleo wants to replace banking apps, offering a chatbot that gives insights into spending across multiple accounts and credit cards. Cleo wants to create a more intelligent way for their users (mostly millennial) to manage their money.
There are now many choices and different ways to save money and manage our money nowadays. But, in an era where we have so many choices at our disposable for every aspect of life, this should crossover to banking as well right?