When I am talking about un-bundling and re-bundling of Financial Services you probably know what I mean. If not, you probably know this screenshot of the Wells Fargo homepage where a FinTech logo is added to any service Wells Fargo is offering. This screenshot is easily the most shown graphic at FinTech conferences and explains what un-bundling is: Thanks to many entrance barriers banks were able to offer dozens of products and services without competition with non-banks. This screenshot is now showing how FinTech services unbundle these offerings while offering only one product but focus on being the best in the market for this one product. Re-bundling is the next step, where a player tries to combine different offering into one front-end. Basically re-bundling is like Wells Fargo in the old days, but just that the “re-bundler” is not developing each and every product herself but is cooperating with many different partners to achieve this. Good examples for the re-bundle process are many challenger banks such as N26 in continental Europe or Starling Bank in UK. But also other players are and will be trying to become a re-bundling hub for financial services. The question is who will succeed?
But actually, I wanted to talk about a complete non-FinTech experience of mine which I had recently. But even though it is a complete non-FinTech experience I will connect the outcome of this story to the current state of “re-bundling” financial services.
For a long time I was a happy user of Foursquare and their additional service called Swarm. Foursquare is an app that helps you to find the best restaurant, bars or clubs in a certain area (similar to TripAdvisor and other players) and Swarm is a social network where you can check-in into certain places and you know where your “friends” are currently located. This is comparable to a Facebook check-in but Swarm users tend to check-in a lot more. The functionality of Swarm was initially part of Foursquare, but after analysing their active users, they have realised that half of their users never check-in and are only looking for recommendations. The other half on the other hand is checking in a lot. Thus, they spun off Swarm as a new service to target the need of each customer group individually. I was actually a heavy users of the latter category: I checked-in in every restaurant, bar or club I went to. I am going to be honest, and say that most of my friends made fun of me for doing this. Most of them believed it was important for me to show my other friends in the Swarm-network where I am currently dining or drinking. But this had absolutely no benefit for me at all. The only reason for me to check-in was having a foot-print of all the places I have visited. This was valuable to me as I could easily remember that one nice café in city X or recommend a friend travelling to city Y the best restaurants. However, to check-in into all these places was quite annoying as sometimes GPS or internet connection was not working properly or a low battery made me rather skip this checkin. In a later stage of my usage I only checked-in into places I have never been before as this was completely sufficient to satisfy my needs.
Since a few months I have completely stopped using Swarm (and also using Foursquare a lot less) as I have completely switched to Google Maps for the same benefits. Thanks to Google Maps timeline I have the same chronicle order of my the places I have visited and I do not even need to manually check-in. I can much easier find the name of the place I do not remember as searching Google Maps through the Map is much easier and provides me faster answer to my questions. There is absolutely no benefit Swarm and Foursquare were offering to me that Google Maps cannot fulfil (remember: other Swarm users might have different needs that Google Maps can not satisfy).
The switch back to Google Maps was super easy for me. It is an app that I was using anyway on a daily basis and using Swarm for tracking my timeline felt more like crooked stick to reach my goal. By now you might be already seeing the connection I wanted to make back to FinTech and re-bundling of financial services: we are seeing a lot of FinTech apps being developed and offered from startups and also more traditional companies as well. They all force me to install another app on my phone to satisfy this one additional need I might have. However, in many many cases this need should be rather addressed inside my existing banking app, that I am using already today. Personally, I have not experienced any benefits through re-bundling in Financial Services yet, however, I believe that 2018 will be the starting point with insurance and contract aggregation in many banking apps. In the following years I believe smart savings (crypto?!), loyalty point schemes and other offerings will follow. Each and every new FinTech services that is launching today should be asking themselves the question: will my own frontend just be a crooked stick and should rather be integrated into banking frontends in the long-term rather? Answering these questions with a “yes” does not mean the idea is bad in general, but the strategy should be developed accordingly (API!!).