Ben Robinson of Temenos has written a great piece on blockchain, the unbundling and subsequent rebundling of banks.
Ben describes how in music, it was iTunes which unbundled music to let us buy individual songs. Spotify then rebundled the model to an all-you-can-listen streaming subscription service. This pattern when playd out in financial services positions the universal banking model as a relic of the industrial age.
In banking the unbundled start-up is again where the change of business model starts and where B2C fintech companies have taregtted.
“They spot a niche, which could one of: a product that wasn’t previously offered (e.g Coinbase), a demographic that is un- or underserved (e.g Lending Club), a much better experience (with likely cheaper pricing), combining tech and design thinking (e.g Transferwise) or all of the above(e.g. WealthFront).”
Once a start-up has found a strong product/market fit, it is logical for it to offer multiple products in order to boost its return on capital by cross-selling and upselling to its existing clients or across the ecosystem. It effectively moves from a single, unbundled product offering to rebundling a full banking service over time. Our agency model whilst nascent is certainly headed in this direction.
The post references Moroku as a player in this process around Digital Experience as you see above.
The change Moroku brings here is leveraging the very viral effect that money has; I buy from you, you use that money to buy from someone else. By determining the relationships that money facilitates, e.g. “Mum pays Child allowance” and then building a set of contextual banking experiences around these (e.g. Chore Scout) banks move out of the business of facilitating payments and into the business of facilitating relationships.
Under some circumstances, these relationships go viral. E.g. Grandma wants to give Johnny $50 for his birthday and rings up mum to ask if its ok to put the money in the post.
“Hi mum, don’t worry about that, we’re using a new app that allows Johnny to get paid his allowance t save up for a new skateboard. If you put the money in the app, that will go to his goal and you don’t have to worry about the money going missing in the post”
Bingo, the bank has a new customer!
When it comes to the future, it’s far more important to be imaginative than right – Alvin Toffler