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Online money management system 22seven blew into our collective consciousness at the beginning of this year under a controversial storm. Most of that controversy centered around the fact that the service allowed third-party applications to access users’ banking details. The innovative startup is the brainchild of 20Twenty founder Christo Davel, and is billed as an “intelligent money-saving tool” that plugs directly and securely into users’ personal bank accounts and then delivers analysis on spending habits.
It’s one of the sexiest startups to launch on the African continent, with funds from multiple unnamed investors.
Davel is a serial entrepreneur with a wealth of financial experience. He was the director of Old Mutual Direct for six years before he challenged and disrupted traditional notions of banking and founded 20Twenty, the first online bank in South Africa.
When talking about 22seven, Davel poses the question: “How do we make ends meet?” The answer, it seems, is to become aware of the financial decisions we make. And Davel hopes his new platform will enlighten us.
“Our service doesn’t have all the answers but it does have a few insights. 22seven is founded on the idea that if we become more aware of why we make the decisions we do, we will be in a better position to make smarter money choices,” he says.
Davel spoke to Memeburn about the future online banking and 22seven ahead of his Net Prophet presentation this week.
MB: Was a direct link to bank accounts key to making 22seven stand out from competing services such as 6cents and Moneysmart?
CD: These services use CSV statement uploads which add extra steps, but frees users from handing over online banking usernames and passwords. Manually uploading data has always been an inhibitor for users to engage long-term with personal financial management services, international precedent has showed. That is just the starting point though. Our key differentiator is that we start from a behavioural economics perspective, shaped by the latest understanding of our emotional, impulsive and irrational human decision making.
Memeburn: How difficult was it to pitch a read-only system to users?
Christo Davel: Our entire service is read-only. It has been from day one. If you are referring to the FNB read-only option… not difficult at all. We worked with FNB to make the explanation to set up the secondary profile for their clients as simple as possible.
MB: What is the future of online banking in Africa?
CD: Wrong question. It should be “what is the future of banking — just banking — in Africa?” The answer is mobile. Banking in our continent should not be broken in channels of delivery. To do that is to fundamentally disregard just how far we have leapfrogged the global market when it comes to delivering financial services to our people. Our strange mix of advanced technology, informal commerce and rural heritage mean that we are leading in terms our innovation in the areas of m-commerce and m-banking. The mobile phone is the future of finance in Africa.
MB: 22seven seems like fun, but appears to mainly be targeted at middle to high income earners. Do you think the same principles could be applied to a service for those in lower income groups?
CD: 22seven appeals to all digitally-savvy users, irrespective of income demographics. If you bank online, it will be of value to you.
MB: As the younger generation become more tech-savvy, could a scaled-down version of something like 22seven be used to educate them about financial responsibility?
CD: Definitely on our radar!
MB: Could 22seven and apps like it eventually lead to the death of the personal finance manager?
CD: 22seven aims to make users more mindful of their decisions. There will always be room for quality, specialist financial advice.
MB: Do you think you still have an advantage over other financial management tools being pushed into the spotlight?
CD: Such as products that banks themselves offer? 22seven works at the intersection of behavioural sciences, tech and play, making it intuitive and fun for more right-brain-leaning folks to engage with their money and financial decisions. Always unbiased and independent. Definitely different to other offerings!
MB: What revenue model (of providing money-saving/money-earning offers to users) did you have in mind from the start?
CD: A subscription-based model ensures our alignment with the interest of the user. We will never offer products or earn commission.
MB: Did you find that using ‘test pilots’ to beta testing help you better craft the product for users?
CD: Yes, it did. Ongoing co-creation with customers should hone our offering further.
MB: What are some of the biggest criticisms you have faced?
CD: Being the first service to automatically aggregate consumers’ financial data in SA, our biggest challenge was explaining the paradigm shift of sharing your online login credentials with a trusted third party. With objective commentary and debate, that criticism (based on consumers initial fears) has dramatically subsided.
MB: Can 22seven be updated to accommodate both direct linking and CSV statement uploads?
CD: Static monthly uploads of data makes the tools we offer to encourage dynamic behaviour change ineffective. We are rather committed to find suitable ways to have secure digital realtime feeds from financial product providers.
MB: Will 22seven expand into Africa?
CD: 22seven has cross-border ambitions. But let’s prove ourselves in this market before we go stomping into another one.
MB: What can we expect from the Net Prophet talk?
CD: I will be sharing some of what I have learnt in my business career. Some of these lessons have become part of the obsession I use to focus and drive the businesses I lead. I will share what is good, bad and sometimes simply confusing about being an obsessive leader.