Why All Banks Should Pay Attention to the TD-Moven Alliance

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Toronto-Dominion Bank's partnership deal with Moven says a lot about banks' changing attitudes on what consumers want from mobile banking.

TD, which does not offer personal financial management tools, said Monday it plans to incorporate the young technology company's money management services into its existing mobile app in the coming months in its Canadian markets.

The agreement comes at a time when banks are struggling to reimagine personal financial management for mobile and determine whether consumers want to do anything that complicated on small screens. Moreover, TD's move is the latest example of how traditional players are turning to fintech companies to help solve their problems.

"It's yet another sign that the financial services industry is waking up to the fact that consumers care about their money and wish they had better tools," said Mark Schwanhausser, director of omnichannel financial services at Javelin Strategy & Research. "This is the antithesis of the stale argument that consumers don't care about personal finance because they don't like budgeting."

Moven, which was founded in 2011 by Brett King, provides digital products that help on-the-go consumers critically analyze their spending. Consumers who swipe their cards to buy, say, baseball tickets get a mobile alert that tells them how much they are spending on entertainment, how recent transactions compare to past activity and other information.

More banks seem to be deciding that mobile users want money management tools.

Tangerine Bank in Canada offers a mobile banking app with a so-called Small Sacrifices tool that is meant to illustrate how everyday purchases could take a toll on broader financial goals. KeyBank, for another, introduced a stand-alone app that will forecast a person's cash flow. Central Bancompany, a Missouri holding company for 13 banks in the Midwest, added personal financial management features to its banking app this year.

Rizwan Khalfan, the chief digital officer at TD, views the upcoming enhancement as a means to deepen engagement with customers who may need money advice on the fly.

The bank plans to let mobile customers customize which services they want - including which accounts use the tools and how the features are displayed on the app.

Moven, which also offers a digital money management service tied to a debit card issued by CBW Bank, announced in August a licensing agreement with Westpac in New Zealand. The young company's bank alliances give it access to millions of additional customers, while financial institution partners view the integration as a way to differentiate their offerings at a time when personal finance apps are proliferating.

TD says it has 2.5 million "active" mobile customers (defined as someone who has logged in in the previous 90 days) and plans to make Moven features available within a year's time across its Canadian operations. TD's plans for its extensive U.S. banking operation are unclear.

Moven expects another two partnerships early next year outside of the U.S. and said it only works with one partner per market.

TD, which had been looking at personal financial management tools for months, said it chose Moven for its customer-focused design. Traditional personal financial management is "all about budgeting and tracking," which can yield "negative" customer experiences, Khalfan said. However, the Moven mobile money management features provide real-time input when consumers are spending their money.

Khalfan equated the data-related tools as akin to a Fitbit but for financial wellness and said they have greater potential for prompting consumers to log in and use TD's services more often.

"It's about giving customers the necessary capabilities so they can meet their objectives day to day," Khalfan said.

TD, which has yet to decide whether it will let its customers link in their external bank accounts, plans to test and respond to customer feedback.

Industrywide, return on investment in personal financial management will be measured in a better understanding of customers so banks can sell them what they need and cultivate an image as the place to go for financial guidance.

Stessa Cohen, a research director at Gartner, said banks need to address all new technology formats (think wearables) when it comes to reimaging their services.

"The digital banking world is changing," Cohen said. "The channel per se is obsolete. [Banks] need a strategy around it that looks beyond smartphone apps or we will keep recreating the present."

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