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Freedom of Choice: You decide what happens to your money

November 7, 2019
Illustrated piggy bank growing a tree

Transparency is a key benchmark for Neobanks

According to research from PwC, the global Neobank market had a value of $16.8bn in 2018 and is projected to grow to a massive $394.6bn by 2026. With such rapid growth comes the obligation to develop in step with customer expectations and a responsibility to change banking for the better.

One area which is a great opportunity for Neobanks to differentiate themselves is a strong desire from customers to engage with more transparent and ethical brands. Approximately 73% of Millenials are willing to pay more for ethical and sustainable products.

This is fairly easy to demonstrate in industries like retail and food production where the conversation typically revolves around transparent and ethical supply chains and packaging. In banking, the conversation is slightly more complex given recent history such as the 2008 financial crisis and the line between transparency and data protection banks must navigate.

At bunq, transparency is one of the values that underpins everything that we do. That’s why we’re the only bank in the world that offers Freedom of Choice - the ability to decide if and where we invest the money you trust us with.

It’s your money, you should decide where it goes

All banks invest deposits with the intention of profiting off those investments. In fact, the interest received on these investments is the main source of income for banks. The issue is that historically consumers have had little to no visibility into where their funds end up and what they are used for.

Our remedy for this lack of transparency is simple. When someone opens up an account with bunq, they are presented with a list of different investments to choose from as well as the option to not invest in any of them. The choices include green companies that have been Arista certified for their sustainable credentials. There are also other options like personal lending and mortgages. Furthermore, we make a point to educate our community about each investment option through an information button in the app.

What is equally as important as telling people where the money will go is making it clear where the money will not go. All it takes is a quick search on Google and you can find many examples of banks investing in things that do not have a positive impact on the planet or society as a whole.

In our socially responsible investing materials we make it very clear which company activities we exclude when investing. These include things like weapons, tobacco, gambling, coal and shale mining and more.

The next step towards transparent banking

Neobanks are in a unique position to compel the rest of the banking world to become more transparent through their actions. It’s clear that the rise of mobile banking and fintech as a whole has forced large traditional banks to rethink their approach to customer service and their digital offerings. A recent example of this is Goldman Sachs investing $10bn in credit lines alone with Apple for the Apple Card.

The best way for Neobanks to challenge the status quo on transparency is to continue to lead by example. Customer expectations are becoming defined by what companies do when they think nobody is watching. One area where Neobanks can add legitimate value for their customers is by educating them.

Helping customers to become more financially literate combined with an increase in the value they place on ethical and sustainable activities will result in a more transparent banking experience for everyone. That is a future that bunq will support every step of the way.

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