Welcome to the first interview of the Open Banking: Behind the Vault series where we are joined by experts in the world of Fintech to take stock of Open Banking so far and to engage in a bit of future-gazing.
We kick off this series with Ross Logan, who is the Head of Product at Snoop, a fintech startup that launched earlier this year. Snoop is on a mission to stand up for consumers and help them spend, save and live smarter.
Since launching earlier this year, Snoop has delivered over one million insights to customers and so far, the app has been downloaded over 125,000 times. Snoop has also been named one of Europe’s top 50 fintech companies in Fintech 50, ranked 5th in BusinessCloud’s 100 Fintech Disruptors list, and most recently closed one of the largest crowdfunding rounds in Europe this year - with £10m raised from 1700 investors.
Ross Logan, Product Owner at Snoop joined Hi Mum! Said Dad’s Product Strategy Lead Jeevan Jayaprakash to speak about the amazing success of Snoop so far; why big banks should watch out and what the future holds for Open Banking.
So, what does the role as PO at Snoop actually look like?
“I guess our whole business is based on the premise of Open Banking and Open Data. My role boils down to thinking up innovative solutions that utilise the data we get via Open Banking in order to make consumers' lives easier. It could be really obvious things like they’re paying too much for things to more nuanced and subtle things like how changes in their spending behaviour, like going to a different supplier or shopping in a different supermarket could make a difference. It’s actually really simple things that people generally know but there is simply too much to keep track of, Snoop does it for you”.
"We just want to give users reminders so that we can help make their money work harder without having to fundamentally change the way you go about things on a day to day basis".
With a background in banking from Virgin Money where Ross’ team were building a digital bank, Open Banking has always been a keen interest for Ross.
“At Virgin Money, the Open Banking opportunity for us was that if we were able to show other bank accounts in our own product, you can then start to own the experience and build new experiences off the back of that. It is obviously important to own the experience because banks make money by getting customers to transfer their other products to your own bank and if we could get customers to dwell in our app, that helps with that goal”.
Snoop doesn't have the same commercial pressures as Virgin Money, allowing them to focus on customer needs rather than getting people to open accounts.
Of course, Snoop needs to build a sustainable business but has the freedom to align the ways they make money to mechanisms that save people money. This position means that everything Snoop does is customer-serving and ultimately the opportunity to build trust is significant.
"Our first objective is to meet the needs of our customers whilst building a sustainable business that can expand its reach and functionality to help as many people as we can".
HOW IS OPEN BANKING FARING?
The Open Banking initiative was brought in by the government to increase competition in the sector and give consumers better visibility of the options available to them. However, many industry commentators, including Hi Mum! Said Dad in previous posts, have asked how Open Banking as a whole has actually fared since launch.
From Ross’ point of view, while Open Banking has taken a while to get up and running, we are now starting to see interesting use cases and organisations springing up. The challenge is now to provide enough value to consumers to make it mainstream. And he thinks we’re not too far off.
“I think Snoop is doing the best job at making open banking-based businesses mainstream! Ultimately, it’s about being able to say that we can make your data work much harder for you, going beyond the experiences and services you currently get from your bank or financial institutions."
"It has to be more than visualising data and performing basic banking transactions - this is what is going to drive competition".
To go beyond the experiences financial institutions already offer, Ross thinks companies need to build on top of simple account aggregation by generating insights and content, or by taking friction out of other journeys. For example, Snoop proactively reviews spending and alerts consumers whenever there is an opportunity to save. Consumers no longer have to regularly check they’re still getting a good deal or the best rate.
“Staying top of your money, bills, subscriptions takes effort and a lot of time that people just don’t have. What we’re trying to do with Snoop is remove the stress and give people back their time by continually checking bills, subscriptions and rates in the background and alerting people when there is a better deal or relevant insight”.
BIG BANKS SHOULD TAKE NOTE
Ross believes the NatWests, HSBCs and the Santanders of this world have something to worry about, as Open Banking ultimately creates an opportunity to take the customer relationship away from big institutions.
“When payment services come in, then you now have this quarterback service where I can start to move money around and I can meet more of my everyday banking needs outside of my bank’s app. And at this point, the customer is now developing a level of trust with a service like a Snoop, for example, and this means the customer might be more inclined to act on suggestions like product switches and so on”.
Ross envisions a world where customers see all their financial relationships in one place and banks just become ‘product hubs’. Banks would have a scaled-back experience where they are product suppliers and the holistic experience is owned by companies like Snoop whose core focus is on helping the customer.
“Banks just become balance sheets and customers now have this fluid portfolio where they just say “yeah, move my money for me so I’m earning the most interest on all of my deposits”.
Companies like Snoop have the customer experience in their DNA, they are more objective and will give the best advice across a myriad of banking products and services. This objective stance means that consumers are more likely to build deep trust with the Snoop and act on the advice given to them.
CONSUMER BEHAVIOUR AND TRUST
The idea of customers having a central hub outside of their bank’s app, could potentially create a lot of power for companies like Snoop who could find themselves approached by banks looking to strike partnerships to surface certain products like loans or mortgages.
But Ross believes the central hub idea will only work if you are always looking out for the best interests of the customer and that’s something Snoop is really passionate about.
“Our purpose is to make everyone better off and I think you can only achieve that by being impartial”.
Instead of being ‘bought’ by big banks, he believes that eventually, Snoop could force institutions to look at their products and optimise pricing in order to capture market share.
This is a natural conclusion if Snoop is able to achieve a wider vision of becoming a central hub for consumers to manage their financial affairs.
There are some similarities between this predicted outcome and the impact that aggregators like MoneySupermarket and Compare The Market have had where easier comparison forced competitive pricing.
However, Ross believes that Snoop has one very important difference; the emphasis on long term value and continuous monitoring. This makes it less attractive for companies to employ certain acquisition tactics often seen from aggregators, such as short term introductory deals (and the increasing direct debits that tend to follow), irrelevant gifts with purchase and partial presentations of the options.
"The important thing is to partner with institutions that buy into our purpose and can generate positive outcomes for our customers. If Snoop becomes a marketplace that sells to the highest bidder it will erode trust".
There is a far greater opportunity in becoming this trusted central hub than the immediate commercial gains of selling sponsored products.
While this vision is truly designed to serve the customers first, Ross makes it clear that it is not simply a case of building a great app and watching the customers roll in.
Working in Open Banking has reaffirmed Ross’ belief that it is very difficult to change consumer behaviour. Whilst Open Banking provides great tools and resources to develop experiences that could change behaviour, people are still entrenched in their views and have an underlying trust for the bigger institutions over new brands.
“You see that there is a big difference between what people say they are really interested in and the number of people who actually follow through”.
Making it simple for people to act on the recommendations in Snoop will be fundamental to long term success and Ross and his team put this conundrum at the centre of their product roadmap. This means continuously stress testing critical features with users via qualitative research (what people say they’ll do) and on a larger scale in the market by monitoring how people use the app (what people actually do).
"We took a lot of inspiration from Amazon, making sure that as we developed features we always implemented the capability to understand how people are using them at the same time. We can then continuously optimize their effectiveness".
An example of this continuous optimisation is the effort Snoop put into their onboarding experience, with a focus on encouraging users to link their bank account.
For Snoop, getting people to link their account is an important part of the experience to be able to create a hyper-personalised service, but it’s also important not to exclude the users who are not comfortable sharing their data.
Snoop solved this problem by developing a ‘Snoop Lite’, which lets users engage with the content without having to link their account.
Ross explains, “If you want to get Snoops associated with a particular merchant, you should be able to look that up. We want to give people the opportunity to try it before they buy it, so to speak. Obviously, this kind of experience isn’t as slick and automated but it’s still pretty good”.
This means that Snoop does not alienate consumers that aren’t comfortable with open banking or linking their account, instead, they offer an experience that demonstrates value and builds trust over time.
Additionally, Snoop has worked tirelessly on the onboarding experience to improve account linking. While they received a lot of positive feedback from users about its simplicity, there was a need to further explain the concept of Open Banking and what it means to connect an account.
“It was important to recognise that linking an account is a big ask for consumers, and Snoop had to think carefully about helping people feel more comfortable doing so”.
"While more can be done, around 70% of registered Snoop users have linked one or more bank accounts. This has exceeded all expectations for both Snoop and the critics that insist the barrier is too high for consumers to engage with anyone other than a traditional financial institution".
THE SNOOP ENDGAME
Ross believes the endgame for Snoop will be more of a lifestyle product that helps users manage big or small life events.
Using the example of buying a house Ross explains this further,
“What I think would be amazing is if one day you could go into Snoop and say “Hey Snoop, I want to buy a house” and then Snoop would be able to help you through that whole end to end process.
So for example, Snoop will serve you some initial content around House buying 101 and then set you up a little project. Snoop would start with the deposit and help you set a savings goal.
As I save, Snoop will keep me up to date with relevant information related to my goal, for example, if I'm trying to buy a home and the rules on stamp duty have been changed, Snoop would tell me how this would affect my goal.
Once you have hit your deposit goal, Snoop can cut out paper-based leg-work to prove affordability when applying for a mortgage by using transactions, income and savings already categorised in Snoop. Once you’ve got the mortgage sorted, we can then suggest other services like removals and so on”.
“So in short, Snoop helps you to manage key aspects of your life in one place rather than having to talk to all these different parties in different places. We talk about this idea of an assistant or a personal concierge or something like that and I think what we are trying to do is democratise a service that has historically been reserved for those that have a lot of money”.
"The way I always think about it is like a lifestyle product with Snoop being this one-stop shop, almost a super app that helps you manage big or small life events".
Although Snoop always keeps this broader vision in their crosshairs, Ross says that it is critically important to be clear on what needs to be achieved at each stage of the product. Or put differently, build for the very next goal, and don’t build everything at once.
ONE LAST PIECE OF ADVICE
If Ross had to give one piece of advice to someone who is working on building a new product or service with Open Banking it would be to start small, refresh regularly, and keep up the discipline of focusing on the immediate steps, one thing at a time.
For Snoop, that meant initially starting with the insights or ‘Snoops’ to see if people found value in it. Snoops are a key differentiator, so making sure they work well takes priority above all else.
“Inevitably, it meant other aspects of our product weren't as strong and our money management capabilities, for example, would always get compared to others. We had to be prepared to accept that feedback but always keep our focus on what we wanted to learn and develop”.
“The other thing would be not to stop at transactional data. Think about how you can combine transactional data with other data to provide even more value whether that is from other places or from the customer themselves so that you can get a more complete picture”.
Enjoyed this and want to talk to us more about how Open Banking could be a benefit for your company - please feel free to get in touch.