In 2008, just as the financial world was imploding, Georg Ludviksson took a job at Glitnir Bank in his home country, Iceland. On day three the bank failed. Ludviksson saw an opportunity.
By the time he lauched Meniga, a digital banking platform, in early 2009, Ludviksson had more than 10% of Icelandic households and 50% of the customers of Islandsbanki, which had split from Glitnir during the crash.
Domestic VC cash followed a year later. Now Meniga is Europe’s leading white-label personal finance management (PFM) company, working with leading brands such as Santander, Commerzbank and ING Direct.
Over 40 million users have experienced Meniga’s software. Red Herring spoke to Ludviksson about banking, Europe, scale and data.
The concept, and uses, of data, have greatly changed since you founded Meniga. What are the biggest disruptions you must be ready for?
In our view, the biggest disruptive threat retail banks face today is the risk of customer dis-intermediation. With giants such as Apple, Google, Facebook, Amazon, Alibaba and others placing themselves between banks and their customers, banks are at real risk of losing their power position as the number one go-to place for financial services.
We have therefore placed high emphasis on our data driven solutions to help banks provide a more personalized customer experience through, for example, relevant advice, product recommendations, tailored card-linked offers and market analytics.
What are the biggest ways in which PFM has changed since Meniga was founded? What do you see as the company’s biggest upcoming challenge?
In the early days of PFM it was mostly about two things. Number one was simply to properly consolidate and enrich the transaction data and other financial data within banks to create insights. Number two was to present these in insights to the users in a simple, visual and engaging manner, to actually help people understand and manage their finances.
Today our PFM solution has grown much more sophisticated by using data science, and can offer much more personalized experiences for banking customers through highly relevant insights, advice, product recommendations and tailored card-linked offers. We have also incorporated a game changing social media-like financial activity feed which serves as a gateway between the bank and its customers which is inspired by social media platforms such as Facebook.
Are there any regulatory issues approaching with regards to data gathering in the financial industry?
Actually there is an upcoming regulation called PSD2 (The Payments Services Directive) which will entering into force in January 2018, and will push the boundary of open banking across the European Union.
PSD2 will pave the way for consumers to authorize 3rd party providers to have direct access to two aspects of their bank account: access to account and transaction data and ability to authorize payments directly from account. PSD2 will therefore rebalance control over personal financial data in favor of the consumers. Banks need to fundamentally rethink how they can help customers derive value from their financial information.
Can you explain the decision for the company to be based in Sweden, as well as London and Reykjavik?
Meniga was founded out of Reykjavik in Iceland but quickly we expanded into the Scandinavian and European market. We opened up an office in Stockholm, Sweden, to attract more of world class nordic talent and to expand our presence.
Soon after, we opened up an office in London for further expansion as an international solution and service provider, and closer proximity to our current customers and to be part of the universally recognized hub for financial technology companies that London is. Today Meniga is headquartered in the UK.
Has Brexit changed your vision of working in the UK? Do the vote’s implications have big consequences for Meniga?
The UK’s EU membership played a role in our decision, but it was by no means the only reason. Meniga has benefitted from London’s vibrant fintech scene, rich talent pool, transport links, access to the financial ecosystem and generally being a good business environment.
As long as policymakers ensure these things remain intact, we and other UK-based high-growth companies will be fine. The focus now must be on protecting the landscape that nurtures tech and fintech startups so that we can continue to thrive here in the UK. We are confident the policymakers will do so, and as such we have no plans to leave London.
You mention that Meniga is a ‘Nordic company with a Silicon Valley mindset’. Could you explain the differences between the two, and how you have been able to bridge them?
We believe Meniga combines the Nordic creativity, hard work ethic and structured project approach with the aggressive and ambitious Silicon Valley mindset. One of the reasons we might have been able to bridge these two is that Iceland is actually between America and Europe, and Icelandic people tend to be a blend of both worlds.
Additionally, many of the Meniga leaders have worked and studies in both America and Europe, and our teams are very international. That creates a creative but high performing environment.
What did your recent funding round ($7.9m VC, August 2016) allow you to achieve?
The recent funding is supporting the company’s overall growth, as well as the continued development and improvement of Meniga’s data-driven offerings – ie card-linked offers and consumer spending analytics platform, which uses advanced data analytics and machine-learning algorithms to drive personalized offers and real-time insights into consumer buying behavior. Using these solutions, banks can connect customers and merchant partners directly through their digital banking environment.