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A saga of evolution in digital customer engagement

Georg Ludviksson, co-founder and CEO of Icelandic firm Meniga, tells IBS Journal about the 2008 crisis, true customer engagement and what point you go from being a happy-go-lucky startup to really getting down to business.

Tell us about your company – how was it founded?

When the global financial crisis hit Iceland at the end of 2008, the three largest banks in the country – which made up 80% of the market – went bankrupt. It was the largest collapse experienced by any country in economic history, relative to the size of the Icelandic economy. Meniga was founded as a response to the national need for financial help.

Myself and two friends, brothers Ásgeir Ásgeirsson (CTO) and Viggó Ásgeirrson (CHRO), started up from Ásgeir’s living room in 2009, working with the three Icelandic banks that collapsed to implement the first personal finance management (PFM) solution in Europe at the time.

Soon after, we started working with banks outside Iceland to help their customers lead better financial lives. Now we serve customers in over 20 countries across five continents. Today we have over 100 employees in four offices – Reykjavík, London, Stockholm and Warsaw – reaching over 50 million digital banking users.

What is your business model?

Our white-label digital banking solutions are at the core of Meniga’s proposition, but Card-Linked Offers (CLOs) are a growing part of the business. We both license our solutions, as well as partner with banks in a shared revenue model.

With CLOs, we employee sophisticated data analytics to identify personalised offers for banking customers, tailored to their spending profile and lifestyle in their digital bank environment. For example, if you are a golfer then you are very likely to receive discount offers related to golf. Once an offer has been accepted, customers only need to make a purchase using their regular banking card and they will automatically receive cashback to their account.

What sets you apart from the competition?

We believe that our approach to customer engagement is what really sets us apart. What is key is being able to support those users who like to deep-dive into their finances without putting off those who don’t like engaging too much with their money management. You need to keep people interested and loyal to your bank by deploying gamification and habit-forming functionality, along with great design and smooth user experience.

This is especially important in today’s financial services landscape because banks are now competing with big tech giants like Apple, Amazon and Facebook, and thousands of fintechs who are experts at customer engagement. Meniga is also in the unique position of having a B2C platform in Iceland available to anyone aged 16 – 90 free of charge. Today we have over 30% of all households in Iceland registered which gives us a great a deal of flexibility to try and test our solutions and functionality and measure the results.

What was your smartest move?

As we’ve grown, we’ve realised that one of our core strengths is advanced data analytics, so we started working with our data in new and exciting ways, which has driven our Card-Linked Offers and Consumer Data Analytics solutions. Taking a step back and thinking about how we can use our data to create new opportunities, which fit with our vision of the future of digital banking, has been pivotal for us as a company.

We’ve also been very focused on attracting the right people from all over the world, so we’d say that another of our smartest moves has been to recruit world-class talent that dedicated to transforming digital banking.

Where did things get tough – what was your biggest setback?

We experienced what most start-ups go through at one point or another:  growing pains during scaling of the company. We grew faster than anticipated and it was tough at times to keep the business balanced by bringing on new clients while continuing to provide excellent service to our existing ones, but we succeeded.

Where do you want to be in five years’ time?

Today we are the European leader in digital banking solutions, so we plan to become the global leader in digital banking solutions within the next five years. The revised European Payment Services Directive (PSD2) signals a significant shift in the balance of power in European retail banking, opening the door to innovative fintech companies and setting the financial services industry on a journey towards open banking. With PSD2, the consumer decides who can access their data and authorise payments from their accounts.

This means fintech companies and tech giants will be able to build financial management and payment services applications on top of customer banking data. Although PSD2 will only impact European banks, there is a broader global shift in the same direction more markets may introduce similar regulations. We, therefore, expect that in the coming years, banks around the world will need increased support in re-shaping their business models, particularly when it comes to engagement. We are experts in working with data and the psychology behind customer engagement, and so are well-positioned to help banks on this journey.

What makes Meniga more than a start-up?

We don’t tend to refer to ourselves as a start-up anymore. But when do you officially stop being a start-up and move into the growth phase? Many people say that you know that your business is no longer a start-up when you’ve stopped having fun and things get serious Although we’re still having fun the company has grown very fast.

So, when we look at the numbers over time we remind ourselves of how far we have come. We are a well-established business that experienced tremendous growth in its early years. We signed up some of the biggest banks in the world, opened offices in new geographies, hired some great talent and are helping millions of people improve their financial lives across the world. Meniga is no longer a small project that started in Ásgeirs living room, but a global fintech company shaping the future of digital banking and helping millions of people around the world.

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