IBS Journal July 2016


43


wrong but someone putting their arm around you and saying, “I’m going to help you make the right decision.”


RK: Everyone tries to make the comparison between AirBnB or says that they’re the Uber of something – Uber’s not even a very good example – but what [the former] did was create waves in the supply and demand spheres. People have spare rooms they need renting out and others want to stay in places closer to the heart of the cities they visit. Both sides, in providing and consuming, come away the better. That transformation, which has both a financial and emotional value to it, is a little bit like what we’re trying to do with Tandem.


IBS Journal: So what makes Tandem so fundamentally different to the High Street bank?


RK: Ultimately banks are all about their interest margins and rates; if I charge a higher rate on your loan you get less and I get more. People waste thousands of pounds on their day-to- day personal finances and we can release some of that money by helping them sort it out. All your banking services over a year cost you a few hundred quid, but we feel like we can make interacting with your bank a profit-making activity.


MC: All those people who stay with their gas provider or have the wrong credit card or the wrong mobile tariff – which all contribute to them being unable to save money – can be aided through technology by an advisory service. We don’t want our unique selling point to just be “you can do your banking on a bus”.


RK: We have a robo-advisor embedded in the app which will let you know what’s going on with your finances. It will also spot opportunities for you to save and connect you to a real human being should the need arise – and not just for help but also if you just want to chat about your activity.


MC: This factor is important as when we read about ourselves we often get pitched as a “digital bank”. We think digital is really exciting but it creates a barrier between the bank and the customer and reduces important dialogue. Our goal is to help as many customers as we can and we believe that in 2016 digital is still a niche – people still want to talk to a human being about their banking services.


IBS Journal: So what’s under the hood of Tandem – what www.ibsintelligence.com


banking systems do you make use of?


RK: We run a combination of custom-built digital channels using Fiserv’s Agiliti platform in the backend, which has been good for us. In the next 10 years there will probably be a new category of core banking system and hopefully there will be some new and exciting solutions for us. Saying that, Fiserv have been absolutely the best for us and we are working with them strategically on the digital side.


MC: In the short-term so much of our market advantage is in the interface of our application. The idea of building the banking piping from scratch is an overwhelming prospect in terms of time and cost when really we want to focus on customer-facing aspects and design. We think that’s where the competitive advantage is. If you could have everything you’d want the most advanced backend system, but the key is in making sure something is in place and it works.


IBS Journal: How are things progressing with getting to market?


RK: We got our banking licence in November 2015 and actually had our first few test accounts opened last week and [they] have been funded.


MC: We were pretty excited, even though one of our folks only made a transfer in and then out again of around £1.40.


RK: We’re rolling it out to a few testers and at this point it’s mainly friends and family. We’ve got a whole load of potential customers involved in building the bank, around 5,000, in fact.


MC: Talking to potential customers – people who had signed up – was great because as much as Ricky and I could sit in a room and come up with a load of ideas it might not match what our customers wanted. They help us think about products and help us think about offerings – it helps cement our idea that you can’t build a successful bank without the customer. That’s maybe something some of the bigger banks have forgotten about.


RK: Those guys will be getting their rewards over the summer and into the autumn but we’re kind of live from now, really. We’ll be doing public stuff in the autumn, for sure, but we’re yet to figure out whether that will continue under the backer scheme or whether it will be fully public. Perhaps next year we’ll make it fully


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