Much has already been written about Monzo and Starling, the darlings of the challenger bank world, and how they represent a threat to incumbent players. But beneath the media noise, an equally dangerous start-up, Yolt, has been using a very different method to win over customers.
Yolt, parented by ING Group, is an account aggregator app, not a bank. This is an important distinction as it allows consumers to sign up to its service by simply scanning their photo ID with their phone, an easy process that has so far attracted over 500,000 users. Yolt is growing fast and is dominating the application programming interface (API) open banking scene.
There were reportedly 17.5 million API calls in November 2018, up from 6.5 million two months before, with Yolt accounting for more than 80% of all occurrences. The Yolt app is also completely free for the user and could be onto a more popular idea than some might think. GlobalData’s 2019 Banking and Payments Survey has shown that one of the most attractive personal finance management tools is account aggregation, with 36% of both global and UK consumers, ranked first and second respectively, claiming it would be useful.
The genius of Yolt is in how it slowly captures customers. By being a bolt-on service, it allows consumers to almost seamlessly transition to the app with no real commitment, rather than forcing them to switch or create new accounts.
Once using Yolt, there is no reason for them to visit their own bank’s app or website. Over time, consumers may see themselves as Yolt app users rather than customers of the likes of Lloyds Bank or Barclays. This has the immediate effect of distancing banks from their customers but it also allows Yolt to sell all kinds of products and services that banks themselves would normally have sold. These not only include insurance and loans but also categories such as shopping, transport, and holidays. Yolt can also offer a more personalised approach by analysing user spending data and then offering advice and better deals. This can provide an improved user experience and help customers manage their money better, but it also allows Yolt to sell more products.
Yolt is already a convenient way to view accounts – but with Yolt Pay, which is currently in testing, users will finally have everything they need to use Yolt as an interactive, all-purpose financial management tool, completely disintermediating banks from their customers. The problem is that banks have not yet caught on to this and if they wait long enough for Yolt to hit the mainstream, they could be left as little more than storage facilities.
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