I recently met Fidor Bank CEO Matthias Kröner and found a lot of new ideas. In fact, I can confidently say that Fidor Bank is the most innovative bank concept out there right now. Why? Because Fidor Bank is the bank I would create if I were going to launch a bank today.
First, the sign-on to Fidor Bank is through Facebook Connect which, at this time, is one of the only banks that allows that. Second, the bank doesn’t just aggregate accounts but, on a single page, a customer can view all their account holdings from savings and investments through to precious metals and even virtual currencies, such as World of Warcraft Gold. Third, the bank offers an interest rate on savings that is determined by the number of Likes on their Facebook page. From their website:
“The Fidor Bank is the first bank in the world where you can help shape the interest of FidorPay. The rule is simple: The more Facebook Likes, the higher the interest rate. The minimum interest rate of your FidorPay account is 0.5% pa. By the 25th of each month, if the bank achieves a certain number of Likes, then a higher interest is paid and calculated, starting in the month at the rate achieved in each case. From 22,000 Likes FidorPay will offer 1.5% interest per annum for the remainder of the year. At the end of 2012, the interest rate resets again to 0.5% pa.”
Fourth, Fidor really gets social media, as demonstrated above, and shows that through their marketing efforts. Since the bank launched, they’ve spent €100,000 on marketing in total. That works out as around €1.33 per customer registration as a cost. As Matthias noted, it costs €7 per click for most banks to just advertise a product on Google and get Google clickthroughs. Fidor is getting customers acquired for just one euro per customer.
Fifth, they offer a variety of capabilities from P2P lending through crowdfunding. They even offer an online betting platform like Betfair, called Brokertainment, a matching service that allows people to offer a punt on anything.
The example Matthias used is the idea that the FTSE100 will increase by at least one basis point between 11:00 and 11:01 on June 20, 2012. I say that I will place €5 on this and someone else can then take that offer. If FTSE goes up, they owe me €5; if it goes down, I owe them … and Fidor Bank will take the payment through any currency format I choose, including World of Warcraft.
Sixth, they’re not trying to reinvent things but partner for everything: their P2P lending is fully integrated with Smava, the German equivalent of Zopa; the media firm Bertlesmann is their primary agent for distributing their services in online virtual games; they partner with hyperWALLET to provide global payments capabilities; and more.
Finally, I like Fidor Bank. For example, they describe themselves as “banking with friends” and believe that “there is no law that says that banking transactions must be boring.” Much of this is conveyed through Matthias’s own humor – yes, he is a funny German but also Bavarian – so I asked Matthias why they don’t have branches.
“Why would we have branches?” he replied. “Branches don’t show me how qualified advisors are, whereas we show that in our chat rooms. Branches create a them-and-us position – servers versus served – whereas you would be unable to tell who are the customers and who are the employees in our bank. Everything we allow you to do online – managing virtual currencies, checking rates, using social connectivity – you cannot do in a normal branch. And branches are only open during certain hours.”
His conclusion was the most amusing: “I used to work in hospitality – the restaurant and hotel business – and if I ran my restaurant like a bank, you would turn up for lunch and we would be closed. That’s because it was the staff’s lunchtime and they would be eating. We would probably open around 3:00 instead, after our lunch had finished.”
Mr. Skinner is chairman of the Financial Services Club, CEO of Balatro Ltd. and comments on the financial markets through his blog the Finanser. He can be reached at firstname.lastname@example.org.
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