Tink and New Age Banking

I have been using Tink for some time now and like how Tink is spearheading this new “Open Banking” through its platform especially now with the advent of PSD2 regulations. This article is an attempt to imagine the future with Tink as one of the biggest Third Party Provider in the European Financial Markets as it becomes a platform and an ecosystem for banking, financial services and insights.

What is Payment Services Directive 2 (PSD2)

EU council is enabling fair play and an open field in the world of banking by laying out directives for the banks to share customer transaction data with Third Party Providers (TPPs) in a regulated and secure way with PSD2. This has two facets

• ‘Access to Account’ (XS2A) : With account holders consent the bank or a Payment Service Provider (PSP) can enable secure access (identity verification and authentication) via APIs to their customer accounts and data
• ‘Payment Initiation Service Providers’ (PISPs) : This is third party payment initiation (provided by PISPs) online to an e-merchant or to a beneficiary from user’s bank account and third party account access for user’s various accounts (provided by Account Information Service Providers or AISPs)

This opens up a plethora of opportunities for these TPPs who meet the regulatory complaince to reach out to their customers. Banks will now not bethe only ones in the business of “Banking”.

The Future

The future will see people moving away from card payments, lesser transaction fees, ability to choose financial products from one single platform, product suggestions according to their spending and saving behaviour and tonnes of insights for businesses to grow and market their products to customers.

Choosing my Bank

Tink is the single platform for all banking services interactions and a Bank Account is the place where the money rests for the customer.

Finding the right bank for the their matching needs can be a cumbersome process for the user. Even before the user accesses any financial services, Tink can collect their KYC details in few simple steps, give options for requirements for selecting a bank (best interest rates, cash withdrawl fees, annual bank fees, foreign exchange rates etc.) and help open a bank account, hassle free in no time.

Options for the account type can differ according to the user profiles, like student, working adult, pensioner, demographics, etc. Here Tink acts as a platform for partner banks, giving them an opportunity to reach to a larger audience and also helping customers to switch bank accounts according to their changing needs.

Payments

With PSD2 Payment Initiation Service Providers or PISPs can directly do payments between customer to merchant or merchant to merchant. This can reduce the debit / credit card transaction fees, card network fees charged by issuing or acquiring banks and device fees.

Tinks’ PSD2 compliant platform already enables bill payments. Similarly, enabling direct debit transactions, P2P, B2B and customer to merchant money transfers will cover a large spectrum of payments.

Tink can partner with strong Payment Systems like Swish (in Sweden). The Tink app at the customers’ and merchants’ end, can have Swish to easily initiate and acknowledge payments.

This transaction data can be analysed at customers’ and merchants’ end to give insights. With user permissions, partners or merchants on the platform can use this data to predict user needs and market their products to the right audience.

Payments with Tink at Merchants’ End

Tink for businesses could serve more than an AISP and an simple insight provindg tool.

POS and Tink: Tink can act as a POS service for SMEs providing them a platform to add bill items in a simple interface and then proceed to Payments where a payment can be requested by generating a QR code or with payment partners like Swish. For big businesses who are already running an established POS, Tink can connect with this POS through APIs, to store the itemised bill then proceed to payments. There are many advantages here:

1. Tink can give insights to the business about what products it sold (like the POS) and also what type of customers did it sell these products to? Like customer demographics, location, etc (with customer permissions)
2. Tink can be the platform for suggestions for the user based on the history of purchases and the itemized bills for each purchase. Example, If a user purchases Milk from a nearby grocery store every 3rd day, Tink can help set reminders for the user to buy Milk.
3. With Tink as a PISP, businesses pay reduced (or no) transaction or handling fee, as compared to card payments
4. Merchants can link their loyalty bonuses, memberships, customer engagement and payments to one portal — Tink

Insights for Businesses:

• Corporate performance insights — (online or store) transaction data is used to derive insights on sales, consumer spending pattern and product performance
• Predict future cashflows
• Insights on customers
• Up sell and cross sell products on Tink Platform

Payments with Tink at Customers’ End

• Mobile and Web Payments, no card needed: Customer could pay to the Merchant with Tink
• One stop for payments and memberships. Secure Login to Merchant pages with Tink.
• Itemised bill stored in Tink: Clicking on transaction in Tink app, user directed to the invoice stored in Tink. Currently, Bank statement only mentions the often cryptic Merchant name and time of purchase, but with Tinks’ APIs customer can know bill details, street addresses, geo-coordinates, categories for the merchant.

Partners and Product Recommendation

Tink will be a platform that is used by customers and service providers to match each other with the right needs. The customer data will be shared only with user’s permission, securely through APIs

KYC data: Tink can collect the KYC details for the customer which can make loan processing, account opening and verification faster with partners on Tinks’ platform

Credit Scoring: Banking history and behavioural patterns can help establish credit scores for Tink. This scoring algorithms can be developed with partners like Klarna.

Mortgages: In the present platform, the customers can view their mortgages / loan accounts. But personal finance calculations, transparent credit scoring, overview of savings, predictive spending choose from multiple lending productsavailable on Tink, which is best suited to their needs.

Loan Origination System: Tink can partner with decision engines of lenders (Set conditions, rules, calculation of fees, credit analysis) on its platform and even do compliance checks (red flag reporting) for the lending partner.

Other lending products: For merchants and SMEs Tink can provide insights for predictive cash flows and suggest small business loans. Similarly, payday loans, vehicle loans, etc can be suggested by Tink and the user can be connected with the partners

Cross sell: Financial service providers and small merchants can connect with the customer on Tink, based on the customer actions. Example, if a customer is looking for a home loan, additional services like connecting with a real estate agent, home insurance, home renovation plans, etc can be done by Tinks recommendation engine. It can also partner with marketplace providers like Yelp for geo-based suggestions

Tax Filing: With AISP, Tink has a holistic picture of all transactions, loan accounts and savings for the customer. If partnered with the tax office with APIs, Tink can help in easy filing or reviewing of Tax returns on its platforms or can connect with Tax Departments’ portal for details.

Personal Finance Management

Personal Finance is not about tracking numbers on spendings or savings but understanding behaviours. This behaviour changes with age, location, work, family, etc. Like a 25 year old will have different spending habits than a 40 year old. One may be saving for a new gadget while other saves for a family holiday. A Personal Finance Management tool should help both users understand their behaviours and help them towards their goals.

Tink already has a PFM product in place. Here are some inputs on enhancing insights in PFM for a product that works as a platform for multiple customers, merchants and partners.

Easy to understand insights: Weekly/ monthly behaviour should be highlighted before the numbers. Example, the user can be a Shopper, Foodie, Traveller depending on their spends for the week. Further scrolling or a 2nd level click should highlight the graphs on spends.

Weekly/monthly insights could also show how the user spends/ saves on weekdays vs weekends, or early weeks vs later weeks of the month. Similarly, a monthly/ yearly insight could say how many flights the user took, how many movies they watched, how many uber rides they took, etc

Product Recommendations based on Insights: Product suggestions can be made to user depending on the user transactions and goals. Example, If the user is a Foodie (depending upon past transactions on restaurants) and she is nearing the goal / budget for eating out this month, Tink can suggest cheap eats near the users preferred eating out location to help her achieve the goal. Tink can partner with Google maps or Uber eats to enhance such suggestions

Better Transaction Details: With the current APIs for every transaction data Tink displays date, time, amount, category and merchant location for each transaction. But if Tink partners with the POS at merchants end, it can also show the itemised bill for each transaction. Example the user will not only know that she spent $100 on Amazon this month but will know what they bought from Amazon by just clicking on transaction details in Tink. For further details, she could also be directed to Amazon page, right from Tink where user details are already authenticated.

Sharing Expenses or Categories: Household expenses, grocery, kids, holidays, etc are often shared expenses between partners or roommates. Spending and saving goals or budgets are set for these categories between 2 or more users. Tink could help users share these categories/ goals with other users where each can view transactions for the shared category.

Travel / Holiday Category: For travel or vacation many users like to analyse their spends into sub categories like attractions, food, transport, stay, etc and not mix them with their regular goals. Tink should be able to read transactions in a foreign currency or cash withdrawals at a different location other than home city (with user permissions) and help categorize these better.

Hire Me

Hire your next awesome product manager today.