Tuesday, 22 November 2016

Bank which manages your life...

Here's a sneak preview of what our future banks might do for us:

*start a savings pot for friends' birthdays or a holiday, after checking your Facebook or what air tickets you're looking at.

*tell you what energy or insurance deals will save you money and switch you over

*alert you that an account you're sending money to might be fraudulent and block the payment temporarily

*tell you you're paying for two music services which overlap and offer to cancel one of them

*warn you to stop spending if you've used cards, cash or loans too much, even if they're with other banks

These are some of the features -- useful to some, a bit creepy to others -- to be offered by the new app-only bank, Tandem, one of its founders, Ricky Knox, has been telling me.

Tandem is in development-mode, operating credit cards and loans for friends, family and early backers before launching to the public some time next year.

The plan is to offer a current account but, interestingly, Tandem envisages including your existing current account from another bank within its own app.

That might sound awkward and you wouldn't be able to operate the account normally as things stand.

But new standards on open banking will allow banks and internet start-ups to combine a variety of accounts one platform.

This makes complete sense if you are a new bank challenging the High Street players, because people are still very sticky when it comes to switching current account providers.

If you can't persuade them to switch, why not move their old account lock, stock and barrel onto your app?

The new app banks or would-be banks, like Tandem, Atom, Monzo and Starling, have slightly different approaches but the key for all of them is the smartphone, which Knox argues provides greater security. 

After the recent security breakdown at another challenger bank, Tesco, that's an important assertion to make.

Knox says at the customer's end safety is enhanced because they have to use a fingerprint to log in on a mobile, while - behind the scenes - the service is so automated there is less risk of human failure at head office.

Let's hope he is right!

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