‘FinTech Startups are looking to add to banking possibilities’

Kinderen zien steeds minder contant geld. Ze krijgen minder vaak contant zakgeld en ze zien hun ouders minder vaak financiële keuzes maken. Hoe voorkom je dat met het fysieke geld, ook hun financieel inzicht verdwijnt? CEO Lior Bornshtain van Otly heeft een boodschap, niet alleen voor de kinderen, maar ook voor de grote banken. Een gesprek in aanloop naar de conferentie Toekomst van het Betalingsverkeer.

“We’re not a bank for kids, Otly offers a first banking experience for kids. We bring back zakgeld, and then: digitally. There is a need fort his, because we are becoming a cashless society, hence we don’t have cash money on us. As a result kids do not get allowance, like we did when we were young. These days, less parents give allowance and delay it once the kids are older (around 12) the result is that kids are missing a very important lesson in financial education. Otly set to address this with the concept of digitalising PiggyBanks (spaarpotjes).

Kids need to understand that things cost money (sooner the better). I experienced this in my own family. My daughter of six bought a doll and saw her pocket saving got less, it was an aha moment for her and since then she start to prioritise her savings.

We want our kids to save their money for the things that matter to them. And savings interest rates being near to nothing is not a strong incentive. However parents can help. If a father says ‘instead of giving you an iTunes credit, let’s save it for a the FIFA2018 console game release – kids will learn how this works. But what if you want kids to go out and play? You could stimulate other saving plans saying: ‘for every euro you save for a comic book, I’ll add twenty cents’. No bank will give that interest. Your child will learn to save. But if you rather have your child buy a skateboard, you could say: for every skateboard euro, I will top fifty cents. Like this you can push your kids into saving the things that you – as a parent – find important, too.”

Is Otly purely virtual?

We have two tracks. One: children can get purchase Otly Cards (virtual cards where they can pay online (AppStore, PlayStore, PSN, etc…) and offline (toy stores, cinema, etc…). They The kid or the parent initiate the purchase of these cards (using standards payment methods such as iDeal, Paypal, credit card, etc…)

But now, we are also implementing this with the banks. So there will be an actual account behind it. Of course a Jeugdrekening when they are kids, and they may get a real debit card when they get older. We’re not another bank nor want to be one. We enrich standard banking products that provides by the bank with a new layer that is designed specially for kids, what the banks already got for them.

This service can only exist because banks are opening their own proprietary API and show the interest of integrating with us. Once PSD II is there, this will be a lot easier and we can do so without the cooperation of the banks. Integrating with us also provide the banks an opportunity to test if they are “PSDII-ready”: ready to open their systems up to all kinds of European service providers.

So they can test their systems and they get a new acquisition channel.

Kids grow up. Will get other accounts. Will Otly grow with them, and become a grown up bank?

“We offer a family driven banking. Parents can design their products for their kids and use it as early as six year olds, but also for sixteen year olds. Because parents can top their kids saving account, and help with credit – instead of getting a credit from the bank. It is the whole idea of family driven banking. Where Parents can design it to fit to their needs.

Think about kids using it for “family crowdfunding”. ‘Opa, oma, I want this bicycle. Will you help me get it if I pass my swimming exam?’.. Otly makes this banking for young people a lot easier.

What is your main advise for the banks in the Netherlands?

“Cooperate more with FinTech startups – instead of trying to create these start ups yourself! I think they should not be afraid of FinTech startups. Incumbent banks should open up and cooperate more with FinTech startups instead of creating their own “incubators / accelerators / innovation hubs”. Doing that will allow start ups to enrich the banking products that are already provided by the banks.”


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