Ben Soppitt

The 3 Principles We Used to Build a Digital Bank That Goes Beyond The Basics

Maslow’s hierarchy of needs is a simple tool to help us understand a complex and dynamic model of motivational psychology. It shows how our personal needs evolve from the physiological (e.g. food and shelter) through to the psychological (e.g. self actualisation). Needs lower down in the hierarchy must be satisfied before individuals can attend to needs higher up.  

Needs lower down the scale are also motivational when they are deficient (i.e. when you don't have food and shelter, you are motivated to find them) whereas the ones higher up are growth needs — they come into play when other deficient needs are satisfied and they allow us to grow as individuals.

When we designed Unifimoney, we had a similar hierarchy in mind. 

Value for money

You would think value for money is what every financial product’s goals would be. How could any financial institution be successful if it does not deliver as its primary aim in helping people grow and protect their wealth? 

Yet value for money is often the last thing that product teams at Big Brand Banks consider; instead, they are forced into designing for profit first. Credit Cards maximise breakage — the unredeemed rewards and benefits that can be as much as 30-50% of the business case for a credit card portfolio. Over 80% of consumer deposits are held by a handful of Big Brand Banks, despite the fact that they are often the very worst place to put your money. These banks pay the lowest APY on the market. Clearly, the economic incentives of these companies are diametrically opposed to consumers’ interests and they create products accordingly.

Big Brand Banks have somewhat amazingly created a market in which they are delivering the opposite of what consumers want (better returns for their money) whilst relying on consumers' inertia not to move. They are making excessive profits in the meantime. 

Conversely, at Unifimoney, we made helping customers maximise their returns the foundation on which we built the company and product. Our goal is to return as much as we can on individual products like deposits and credit cards rewards with simplicity and transparency — what you see is what you get.

We embrace the sentiment in Einstein’s reputed quote (not actually found in any of his writing but anyway): “If you can’t explain it to a 6 year old you probably don’t understand it yourself”.  The same is true with credit cards, deposits and investing: it should be simple, easy to understand and offer clear, unambiguous value for money.

This means we reject the bait and switch tactics so prevalent in financial services — the headline rates that seem so attractive but require a deeper reading of the terms and conditions to understand the true value. We’ve chosen to avoid caps on cashback, or ones that only apply to certain merchants or transactions, interest rates that only apply for the first $X or require complex maneuvering that are impossible for most people to secure even if they put the effort in to do so.

We also try and embed simplicity in product design not pricing. A vast amount of potential returns are lost every day by consumers having multiple deposit accounts — checking, savings, high interest savings, etc. While we fully subscribe to the idea of high-interest savings for holding emergency funds, the problem is that complexity tends to exhaust interest in managing these different accounts. You end up with far too much money sitting in a low or no interest checking account at a Big Brand Bank. Instead, we created a hybrid checking account that has all the functionality of a DDA checking account but pays savings levels of interest. Simple.

Features and Functionality

There are three main parts to our approach to Features and Functionality:

  1. One app that lets you manage all your money in one place
  2. Automation of the manual work of managing money
  3. Feedback and reporting on returns, spend, and overall wealth

Managing money used to be very simple back in the day. It would have been unusual 30 years ago to have more than one major relationship with a bank or financial institution. You bought everything you needed from them — good, bad or indifferent. Today, it's not unusual to have 10-15 financial apps on your phone. Whilst a suite of apps leads to increased choice, features and often better value, the cost in terms of complexity and effort is high. 

Unifimoney replaces the need for so many apps on your phone, bringing back the simplicity and ease of the past. Except now we are able to aggregate the best services, features and functionality in the market. It is, we think, the best of both worlds.

We characterise personal finance in 3 main buckets — everyday money management (saving, spending and investing), value-added services (typically big ticket items that you have to use only infrequently like buying a house, a car, etc.), and more customised services such as legal and tax. Our money superapp has created the best solution for the first 2 buckets.

Saving, spending, and investing includes a hybrid high-interest checking account, a credit card and investing (both Robo advisory and commission-free self-managed trading). Value-added services include mortgages and mortgage refinancing, student loan refi, health saving account, insurance, student loan refi, auto and vehicle loans and international remittances.

It's a comprehensive portfolio of products and services that we are constantly updating and expanding. However, just having these products is insufficient. We know complexity tends to lead to inertia and people hate having to do boring repetitive tasks like drip feeding into their investment fund each month. However, tech is really good at doing boring repetitive tasks and we use it to automate much of the manual labour involved in managing your money optimally.

Our hybrid high-interest checking account means we eliminate the need to move money between accounts. All your money is earning good interest all the time (it’s not meant to remove the need to have a high interest account but rather solves the issue of having too much money in a low or no interest checking and savings account — the average person earning over $160K a year has $42K in their checking account earning almost zero interest).

We are designing a credit card that guarantees 100% redemption and zero breakage with rewards that help you build your wealth rather than encouraging you into a vicious cycle of spending (the way points and miles do).

We ensure that every customer is passively investing every month through a combination of deposit interest, minimum monthly contributions ($25 but can be as high as you want) and credit card rewards deposited into a Robo investment account. We also have commission-free trading for when you want to make your own trades including equities, ETFs, crypto currencies and precious metals, including gold.

The other side of promising increased ROI on your money is proof. Unifimoney makes it easy to track different dimensions of your asset performance.

This feature is important and unique to Unifimoney. We tell you upfront how much your money is passively earning for you. This number is the aggregate of passive income from deposit interest, cashback on spend, and dividends. We display the data on a rolling 12-month basis and monthly. You can see the detail by simply tapping on the icon.

In addition, we are building a Spend Meter so you know your relative income to outgoing ratio on a rolling basis and historically. This means you can better forecast your deposits and ongoing investment levels.

Finally, we’re creating a Total Net Worth tracker — this will show long-term trends, allowing for a more longview of your wealth building. This figure will be less useful in the short term given that, for many people, the bulk of their wealth is held in investments and property and their value tends to move more with macroeconomic conditions than on the decisions of any one individual. Still, we hope the Total Net Worth Tracker will be a useful measure in understanding the return on investment of your money and your spending profile. Get those right and your total net worth will look after itself barring macroeconomic trends which no one can control.

Self Actualisation

What's the role of ethics, corporate governance, and morality in banking and money? The answer varies widely, from the apparent basics of supporting companies that are properly run with strong corporate governance to the ability to reflect our own personal values and belief systems.

Personal ethics and values are a hugely complex thing and our attitudes towards them are not always as straightforward as we might like to believe. In fact, our behaviour can vary wildly depending on context. We wrote a post about this here if you want to read more.

At Unifimoney, we want to give people the opportunity to express their individuality and personal ethics and value easily and with low friction. We started by making a decision to use recovered ocean-bound plastic in our payment cards. We also decided to double down on this by sponsoring The Ocean Foundation with a donation each time the card is used.

We also are seeking to make it as easy as possible to put your money where your mouth is in terms of social impact investing. Our 12 investment themes include a number of social impact categories including LGBTQ+, Women in Leadership, and Clean Energy, and we are actively researching more. In the future, we hope to implement a new platform that makes it easy to donate equities directly to charities.

We don’t claim to be saving the world, but we do subscribe to the belief that it's small things done repeatedly over time that make the biggest impact on the hardest, most complex and intractable problems. That is as true for wealth management and the get rich slowly approach as it is for major issues around culture, society and the environment. As always, our goal is to reduce friction to create a positive change — for your finances and for the world.

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*Important information and disclaimers

The above does NOT constitute an offer, solicitation of an offer, nor advice to buy or sell specific securities. The opinions listed above are not the opinions of Unifimoney Inc. or Unifimoney RIA, Inc. but represent the opinions of independent contributors. These contributors may or may not hold positions in the stocks discussed. Investors should always independently research any stocks listed and form their own opinions, while recognizing that any investments made may lose value, are not bank guaranteed and are not FDIC insured.