Van Le - Customer Innovation Director at Xinja - has had many, many conversations with our Founding Xinjas and people in general about money and banking. Some of them lasting longer than your average feature film! What they think, what they’ve experienced, what they want, and more importantly, how they feel. Here is her summary of what she heard, and the key themes that came up time and time again.
"Money is an 'enter at your own risk' topic of conversation."
In the early days, talking to people for research was a little tricky. Xinja wasn’t ‘out’, as it were, and people were understandably a bit non-plussed when I started quizzing them about money. So we made do with what we could - snatching chats with friends & acquaintances - and the conversations ranged from:
Me: I need people to interview about how they spend and save and manage their money. Can I interview you?
Friend: No thank you. I am not afraid to admit I am v. ashamed of my money habits and want no part of that shared lol.
Me: How about [Local Pub Name] Saturday night?
Friend: Ok. My money is a bit tight so I’ll probably drink a bit of water.
So I got the message- money can be an awkward and taboo to talk about. According to Forbes, parents shouldn’t even talk to their kids about money, but they should speak to their kids about legacy. Interestingly, millennials seem to be much more comfortable with talking about money, however they would rather go to the dentist than listen to banks.
With due warning now of money being an ‘enter at your own risk’ topic of conversation, we hustled our way into random conversations (aka ‘interviews’) with strangers at bars and behind the wheels of our cabs and uber rides. I heard everything from “I hate having to go to a branch to deposit a cheque” to “I have all my money with my bank and I’ve always paid on time, and the one time I forget to make a payment because my life was getting busy, they hit me with a fee” to “Banks are bastards, I used to work in one setting the interest rates and it destroyed my soul and that’s why I now drive an Uber and have a medicinal marijuana business, here’s my card”.
Following this rainbow of reactions, we reached out to people who had signed up on the Xinja website. We weren’t sure how they would respond ( or if they would) but we were keen to listen and get to the heart of what people cared about. As it turned out they more than generously volunteered their time and shared their ideas, experiences and the things they cared about most (as well as mentioning money and banking occasionally - which they didn’t care too much for!). These interviews led us to some interesting places, and some key themes that we kept coming across around how people felt about money:
"I don't know where or who to go to despite our business having been with [the bank] for years." - Sam
1.Have we met?
Ever had that experience where you see someone regularly but they behave as if they don’t know who you are, or as if that conversation never happened, or as if you never said what you said? It’s a bit like that with banks for some of our customers.
We heard it can be a bit like having a relationship with someone who has selective amnesia, except for when they want you to spend time with their financial planner, or increase your credit limit or do a balance transfer.
“ As a bank you have so much data on how I spend my money and what I do, don’t [send] me stuff that’s not relevant for me. ” Luke G
We got the message, loud and clear. Customers are ready for a different type of relationship with their bank:
"With the amount of insights and data we have access to, we shouldn’t have to initiate things – [I] expect the bank to understand what’s going on for me. And be proactive and reach out….proactively and offer support and advice." - Andy
Not getting help from their banks, some turn to financial planners - 14% of the workforce use a financial planner - but think they are too expensive, too sales- focused, and lack independence. This sentiment is echoed in what people said:
“You look at these financial planners – they’re aligned with massive wealth companies. The first thing they recommend is to move things because that’s where you get your commissions. vs. providing general advice.” - Dylan
So they resort to other sources of advice (this from a bank employee!!!)
“I recently got the Barefoot Investor .. he has tips for people to take control of their financial life – started to follow that advice – you read it and you think you know that stuff … but it makes a lot of sense … certainly don’t see the bank giving me that advice.” - A.
The upshot seems to be “Know who I am, know my circumstances, and apply that data to do more for me than just being a transactional bank - be a trusted advisor”. Echoes here of the kindly bank manager of yore that was the inspiration behind Xinja.
"I don’t know where a lot of my money goes." - Chris
2. Where the hell am I?
Money can be awkward to track, follow, add up, to predict and forecast where you’ll end up. People love talking about making money (getting a pay rise, new job, property, shares etc) but when we asked about how people spend and save money, we were immediately either in the world of guilt, shame, blissful ignorance or of keeping receipts, budgeting apps and excel spreadsheets managed like mofos.
“How do I know how much of my current income is spendable? I’m flying blind.“ - Murti
We also heard budgets and tracking money isn’t that much fun. In fact, research suggests we spend more on screens, social media, and time thinking about money than managing money. 39% of workers spend over 2 hours per week thinking about finances while at work (9.5% of paid salary hours) - this is equivalent to the amount of working hours that we put into our super! The average time spent on finances being about 30 minutes a week, with 21 minutes on checking balances and 19 minutes payment bills. Given how much fun that sounds, it’s no wonder we’d rather spend 1.8 hours a day on Facebook updates instead. And whilst 30 minutes a week doesn’t seem like a lot compared to 1.8 hours a day, we totally get it that 41% of people want to spend less time on money admin - some doing it reluctantly - “It’s like housework i hate it but it needs to be done..” - Leisa - and some not at all - “it’s all kind of sort of a big flurry of transactions going out then and you don't really know how much you spend “ - Chris
At the other end of the spectrum, there’s a certain sense of confidence, pride and control that can come with being on top of your finances. Savings confidence comes with knowing how much, having a plan and regularly reviewing progress, according to ASIC:
- 78% of confident savers know how much money they need to save
- 75% of confident savers have a clear savings plan
- 73% of confident savers regularly review their progress
For some, being on top of your finances of a right of passage, it’s just part of being a responsible adult, or as one person put it, ‘being a man’. For some of our customers, it’s even a game:
“I like the challenge … I track … and keep on top of my money … I track it on a spreadsheet, I predict it myself, I know what I’m paying off… I’ve built my own system. I keep improving on it and simplifying it. I believe I can predict all my expenses. But it never seems to work – the fun is learning it. Guessing if you’re right or not”. - A.
When we asked how people are getting on top of their spending today, we heard a lot about online tools and apps out there that categorise your spend. However, many seem to fall short of expectations:
“Might as well do it in excel by the time I’ve categorised everything at that level of detail – pain in the backside.” K
So when it comes to following your money and being on top of your money, it seems to take a lot of time and effort to get there; some apps are helping but don’t go as far as we’d like, and banks aren’t exactly helping customers with the very thing that banks are meant to be good at - financial control.
"Everything we do as millennials is different to our parents, but banking is the same." - Arthur
3.Why is this so jurassic?
People are somewhat bemused by the antiquated process and lack of technological process in banking. We expect in 2017 to be more digital, and to be beyond waiting in a queue, especially when it comes to solving basic problems:
‘Most of the banking industry is still paper based, needs a signature, has to be scanned.” - Luke - and “One annoying thing currently – having to go into branches, they are only open 9-5 and if you work 9-5 it doesn’t really work. Everyone goes to the bank in the lunch break, you could be waiting for an hour before you get served.” - Michael
And it gets worse when it comes to those moments when you really need your bank to be there for you, and you expect that human touch at a branch:
“Losing my card and getting a replacement - it’s very annoying - hav[ing] to line up at the branch like a f*cker.” - Tas
When we ask people what they expect to be able to do with a fully digital bank, it was about going mobile & branchless:
“Always wanted to have banking on my mobile and not have to go into a branch - everything should be done through the phone.” - Tas.
But with some intelligent support:
“Tech should be leveraged to drive basic thinking….the ability to remove that basic thinking from the customer’s end.” - Murti
So we hear you - no waiting in queues, no lines, no limited opening hours, doing what you need to from your phone, 24/7, getting a prompt response.
"My biggest gripe with banks is getting bank statements and not knowing who I paid." - Steve
4.WTF was that transaction?
People are fed up with cryptic entries in bank statements and having to resort to Google to work out what something was:
“My biggest gripe with banks is getting bank statements and not knowing who I paid. Sometimes the name on the statement doesn’t match the name on the shop. Often the location given is their head office which is in another state.” - Steve
And are irritated when the description against the transaction is delayed, so they’re left not knowing:
“[it’s] frustrating when transactions come through and you don’t know what those transactions are for 2 days…..I have 2 transactions on my card and I can’t see what they are until tomorrow. - Chris
Like everything else, they want to know, instantly, where they are spending - “like Google maps for my transactions”.
"I don’t think that banking needs to be painful but often ends up being quite painful." - Dylan
5.Does it have to be this hard?
When it comes to money, banking, getting credit, loans, things are not as real-time, digital, paperless, easy, user friendly, intuitive, or fast as we’d like. There’s the paperwork for starters:
“When I set up a loan with my bank there’s 10 pages of paperwork every time. We were told computers would make less paperwork but it doesn’t. “ - Grant
And the small print within that……
"When we got our joint mortgage for the first time, I had no clue what half the paperwork or terminology was about. " - L
And then it not helping anyway…...
"Hate having to provide so much paperwork to get apply for a loan having to make an appointment to see a home loan specialist who can't give me answers straight away and keeps having to go ask the boss." - J
It all seems to corroborate the well documented issue that - particularly when it comes to homeloans - the “application process can take a very long time and it can cause a lot of stress", whilst the feeling is:
“A Mortgage should be as easy as ordering a pizza.” - P
After that, it’s the multiple products or accounts and lack of any integration between them.
“SIX ACCOUNTS is too many...I hate having multiple accounts… I want a simple life..My biggest pain point is that although I have the majority of them with one organisation, they don’t work together” - J
Not to mention SWITCHING products:
“Switching products is hard – wish someone would do it for me. Takes forever!” - Alan
"As I get older, I’m fearful of the future…." - Sophie
When we asked people about the bigger picture - about what money was for - it often came down to the fundamentals - at least, love. One customer captured it all rather eloquently:
"That it’s spent with the people that I love.
That it’s for things that I truly care about.
That it provides an impact – eg. help my kids school get better technology. To help others do what they love." - Christian
But underlying this is another fundamental - fear - and in particular fear for the future, and ‘security’ :
“As I get older, I’m fearful of the future….I only have a finite number of years. “ - Sophie
“[I need to ] Make sure that as a family we are financially secure.” - Carol
“[I need a] Succession plan – I want our kids to have some security.” - Grant
Many customers shared common concerns about losing the ability to earn an income.
"Let’s say I’m in a full time job, and I get made redundant. What if that happens and I don’t have a job for another 6 months? I don’t want the pressure of losing my home.” - P
This is consistent with what is being observed across Australia. According to the Australian Psychological Society, personal finances continues to be the top cause of stress. In 2015, less than 4 in 10 Australians (35.7%) were ‘financially secure’. More than 2 in 5 workers (43%) agree they don’t have enough money to do what they want to in their lives and about half of that (22%) say they have the freedom to leave their job if they wanted to. What’s alarming is that more than 1 in 2 people wouldn't have the cash to survive losing their job. As much as 40% of millennials are living from one payday to the next and 1/3 households can't find $500 in an emergency.
And what they want is to:
“Have a bit more of a buffer – so that I can invest / spend on things without worrying what might happen if I lose my job.” - Daniel
And it’s not just redundancy they fear but losing a partner:
"What if it was just me? Worst case if I couldn’t pay my bills I’d have someone to fall back on … What if I didn’t have someone [I was in a relationship with]?" - Jo
Or simply making big financial mistakes:
“I don’t want to overextend myself and stress about additional debts because I have managed to blindly walk myself into untenable financial position.” - Dylan
And they are worried about talking to their bank about it:
“I worry about having a conversation with a bank in case they freak out.” - Sean
Whereas they are looking for a helping hand:
“If someone is in times of hardship, I would want to know what potential options the bank could give me.” - H
Whilst a lot of these 6 feelings are obvious, and known to many of us, it is important to take a rain check on the trigger points, the gaps and glitches and deeper issues that are entangled with one of the most emotionally charged areas of our lives - money. As a neobank, it’s our job to not only fix as much of this as we can, but help turn negatives to positives, and red to black. And that’s exactly what we intend to do.