My grandfather was a banker. He worked in the industry all his life, progressing to a senior board role. His era was utterly different from today. Branch managers were people with real authority, and banks provided an end-to-end financial services solution for their customers. Effectively, my grandfather had his hand on his borrowers’ wallets.
Nowadays, most of the risk decisions in consumer banking are taken algorithmically. Many people rarely deal with a human in their bank. Partly as a result, we’ve seen a process known as “unbundling” where consumers are rejecting the monolith model of banking. You’ll likely use different providers for your mortgage, car loan, foreign exchange, etc. For increasing numbers of people, only the core functions of direct debits and balance-holding are still carried out by traditional high street banks. My own bank, Natwest, is so hard to use that I go to great lengths to avoid any kind of interaction with it.
One key disadvantage of the current model is that it leads to a fragmented customer experience. It’s hard to manage a plethora of different financial services providers. This can lead to inefficiencies – both in terms of management hassle, and in problems choosing and coordinating the best options.
Today, we’re talking to one young firm that’s trying to change all that. Bud is providing a simple interface for the new financial world – giving visibility over a huge range of services, in one place. It’s aiming to provide the same kind of experience my grandad gave his customers, but with all the convenience and cost advantages of the modern world.
Let me introduce you to Ed Maslaveckas, CEO of Bud…
AL: Tell us about yourself, and what’s got you here?
EM: My road up to this point has been pretty atypical – because I’m not from a traditional banking background. I graduated from [the University of] Plymouth after reading economics. I later started working at Salesforce over in Dublin, mapping out the booming fintech space in London. The sector was a nightmare for someone looking in from the outside. There were loads of companies doing amazing things, and they all seemed to be doing them slightly differently. I wanted to map the sector, but after talking with my close friend George [Dunning] – who’s now my co-founder and CTO – I left Salesforce and went after something that could truly shake up the world of personal finance.
AL: How are you planning this shake-up?
EM: In late 2015, George and I set out to create a platform that would give any user the ability to manage all their finances in one place – just like walking into a bank 40 years ago, but using all the great fintech services now on offer. So we created Bud – an app and website that will make the world of personal finance the simplest it’s ever been.
AL: Sounds pretty good, but why now? And will it really help people?
EM: Normal people aren’t finance nerds. They don’t know about all the companies that can give them better experiences, better rates and better customer service for specific use cases.
Bud is built from an ordinary user’s point of view. Traditionally, the sector as a whole hasn’t been packaged up in an easy-to-digest way. We want to change this, so fintech can truly make the impact we all believe it’s heading for.
We are trying to solve this problem in a number of ways.
Firstly, we want to create the smartest financial search. Type what you want to do, and Bud finds the best tool for the job.
Second, we’ll create a marketplace of products, like Amazon, where people can browse and buy relevant services.
Lastly, we’re working on a discovery engine. This is part lifestyle questionnaire, and part robo-advisor. We’ll use this to suggest appropriate financial products, based on your data.
AL: With a few exceptions, fintech has struggled to break out of the finance community – why do you think that is? And what will break this trend?
EM: Getting the right products and services in the hands of customers is the best way to make sure everyone can feel the benefit.
Like I said before, no one has taken on the responsibility of making the sector as a whole easier to understand. Bud isn’t just a friend to its users; it’s also a friend to our partners. We can help educate people and also bring the right users to the right providers. This is something that both sides value.
We also want to be the place where people go to learn about anything to do with consumer finance. Subsequently, we’ll take away many of the barriers facing financial services companies. Our approach of offering a platform for integration offers many benefits. For example, we can offer services like one-click sign-ups for consumers. For firms, we’ll be able to provide shared-cost marketing activities, and actionable insights. It’s through such collaboration that we will spread the benefits as wide as possible.
AL: What do you think is at the heart of this current explosion of innovation in finance?
EM: Experiences and brand values that we see in other markets are now filtering into finance: transparency, authenticity, simplicity. These principles are penetrating even the largest institutions. When you bring inspiration from other industries, there is potential for innovation, and sometimes, revolution. Finance now has APIs and technology experts. That means that a lot of things are in the firing line for change – right down to the very business models companies are founded on. But that isn’t necessarily a bad thing. Two examples spring to mind. Firstly, Revolut – a payments business model brought to FX. Secondly, peer-to-peer lender Zopa – which gives borrowers better rates and lenders (who are essentially savers) better returns.
AL: So how does the future of consumer finance look? And what is Bud’s role in that future?
EM: Incumbent banks aren’t going to go away – but we’re seeing them starting to team up with challenger companies. This enables them to deliver the best, most competitive services to customers. A collaborative finance scene is good because customers get fairer, faster, better results. This has real-world impacts – such as people getting on the property ladder. Ultimately it is Bud’s aim to help people get the most out of their financial life, and we will assist anyway we can.
Did you like Bud’s vision? What do you think is the future of our financial services? Please do let us know – firstname.lastname@example.org.