New Banking App Aims for the Instagram Set

Thomas Ko is a former global head of mobile banking at Citigroup, but the idea for his fintech startup originated at the kitchen table.

His wife, who controls the finances in his household, would hold regular reconciliation meetings where Ko would forget what certain transactions were for.

"I didn't know how much I was spending and why," Ko said. "All those things were a mystery."

After attending the startup trade show Finovate more than a year ago, Ko was inspired to quit his job at Citi and try to build an experience that would answer those questions for someone like him. His firm, Namu Systems, has developed an app that refreshes users' memories of purchases with images that illustrate what they spent the money on.

For example, instead of a simple line item for $150 spent on an anniversary dinner, the app might also show a photo of the occasion. It could also show pictures and logos for banking products and offers, or photos from a consumer's Facebook profile. The idea is to motivate people to check in with their bank account more like they might with a social app.

"We are looking at their story," said Ko, co-founder and president of Namu. "Banks need to look at what's behind the transactions."

Namu, which says it's in talks with banks about piloting the app, is trying to solve a problem facing institutions that vie for the attention of millennial customers: how to make the mobile banking experience more appealing. While personal financial management tools have been around for a number of years, a tide of new financial services apps have emerged that aim to engage young adults with their money.

Digit, for example, is targeting millennials with a service that automates money transfers based on how much someone can afford to help build a habit of saving. And BankMobile, a division of Customers Bancorp that targets young adults, crowdsources mobile app feature ideas in what it calls BYOB (Build Your Own Bank).

Images within mobile banking apps remain a rare feature. Among those that support it is Simple, now owned by BBVA, which lets users attach photos to their transactions to preserve memories of them. Malauzai Software, a mobile banking vendor, includes photos of customers' credit and debit cards within its banking apps. And Chase lets consumers opt in to a feature that changes the app's homepage background image depending on where they are physically. Someone in New York City, for example, sees the Brooklyn Bridge while someone in Los Angeles sees the Santa Monica Pier. The bank also lets small business customers attach photos of their receipts to their transactions.

Namu, which participated in Citigroup's most recent mobile startup challenge and won for "best user experience," envisions a mobile banking experience that lets customers connect to video bankers when they, say, want a loan, and search for offers from retailers and order an Uber ride to the store selling the goods — all inside of the app.

Emotional Banking

The founders of Namu, which formed in 2014 and has offices in New Jersey and Poland and has global ambitions, say they're addressing what other bankers have been neglecting: the emotional side of digital banking transactions.

"Banks have vast amounts of data and aren't tapping into them creatively," said Piotr Budzinski, chief executive and co-founder of Namu. "You just go in [to banking apps] and do your thing and do transfers and leave as soon as possible."

Some industry observers, however, believe images have their limits in banking.

"It's not about eye candy," said Mark Schwanhausser, director of omnichannel of financial services at Javelin Strategy & Research. "It's about instilling a sense of purpose and awareness and still making it easy to do what you need to do."

Still, Schwanhausser leans toward using visuals that help people monitor and manage money smarter, for instance, a color-coded speedometer showing a customer he's in the danger zone.

And examples of apps designed to shed insights on daily spending trouble areas exist. Moven, Simple, KeyBank and Citigroup's newest app for the Apple Watch are among the companies with digital components that are designed to guide people with their day-to-day finances.

Scott MacGregor, a partner and design director at Heist Data + Design, says banks have more work ahead in cultivating digital experiences that inspire people to interact with the apps because of the guidance found there. He views images as but one powerful means to engage with consumers, especially when they illustrate what consumers are saving for. "It's the emotional side of what you are saving," he said. "It's not just a line item. It's a tangible thing you can look at."

And he believes the ability to create emotional ties with digital natives could keep banks from the dreaded fate of turning into just a transactional vault and entering the "meh zone," he said.

Longer term, some observers believe brands will analyze customers' emotional data, which they will collect through sensors on devices, to render even more personalized experiences.

Richard Crone, chief executive and founder of Crone Consulting LLC, believes technology that interprets the customer's mood will emerge to customize the digital banking and payments experience down the road. Think tailored ads or triggering a video chat with a bank expert when the app detects the customer is upset because of his facial expression or intonation of his voice.

"There's so much more that can customize an app," said Crone. "It's not just picking the colors on the background and data fields in the app."