Matthias Kröner from FIDOR Bank posted a response in the comments on What would a disruptive bank look like? which I thought deserved its own post.

Jack, it was absolutely thrilling to read your blog. Your blog and the – out of that – resulting discussion I really find unique. I am happy to participate in that particular discussion, because we build a real disruptive bank that corresponds with your criterias. The name of that Bank: FIDOR Bank.

How do I come to that bold opinion? Best proof would be to apply your criterias. So, lets see:

1. We are a real bank. We received banking license from the German banking regulators. That was in May 2009, so exactly in the eye of the crisis-storm and this as an entrepreneurial and independent team. No big banking group supporting (or blocking) us. We started business in Jan 2010 with a very rudimental offer.

2. From the start, our concept was designed exclusively for the digital market. By doing so, we focus on the main driver like Web 2.0, e-commerce, gamification and everything that comes around the mobile internet. We see absolutely no sense in a banking-branch, regardless of which bank. A branch is inferior to the Internet in all respects! For this I have also written a blog – but is currently available only in German. Sorry. Must translate that… Nevertheless, here is the link. 

3. We have clearly opted for a banking license, because we had from the beginning on the opinion that one must have this license if you want to come to the core of a product and if you want to offer real innovation. The golden rule is simple: “Who wants to hijack a plane, should better sit in it.” (I am not saying, somebody should hijack a plane!!!! ;-))

4. If you hold no banking license, you only can focus on a (wonderful ) UX. That is it. Financial-Products and services are the ones which are made possible by the back-office bank and its core banking system. Not more.

5. We decided from the beginning to build our own middleware, because there was no suitable offer in the market. This is what we now call “Fidor operating system”. Out of that, Fidor TecS AG (a 100% subsidiary to the bank) as a company emerged. We see this fOS as the central tool to generate customer loyalty and stickyness. Our experience: If you work in the context of a concept that has the digital target customers (retail and SMEs) in its center and is not having its own technological expertise, you are lost.

6. Very Important: fOS is an “open” System. Via standard interfaces we integrate 3rd party offerings into our account. The result is as easy as compelling: A normal account has 3 functions: money in – money stays – money out. Fidor Smart Cash Account (as we call it) has already around 20 functions: In addition to the aforementioned , the customer may purchase foreign currencies and sell them and send them, also buy precious metals and sell and ship digitally, can order a mini credit via mobile app (we call it cash emergency) with an instant pay out even on a Sunday (our answer to wonga), can apply for an overdraft online and open it in seconds, can define saving certificates, may invest and participate in Crowd Finance as well as execute peer to peer lending , can use “social brokerage” offers, manage your card transactions in the same transactions-list like all your other transactions, and much much more. Not to forget, that we can integrate digital currencies into our account. Of course. That’s also the reason, why we are the only bank cooperating with two very active bitcoin exchanges. All that is creating a higher Customer engagement, a higher customer cross selling ratio and by that a higher customer life time value.

7. Yes, all that sounds like a complex account. But – in future – the customer can define his/her own account, like we do it today with our smart phone. That’s why we call it a Smart Cash Account. By defining your own complexity in that account, we integrate again the customer.

8. In addition, we operate a community, in which users can ask each other questions and give answers. Here you can rate products and consultants/advisors of all banks as well as you may wish to create products. Or you want to support other users by giving advice how to cut cost of living. Also you can compare your own financial profiles – of course anonymously. Naturally, we are active on all other social media channels and try to integrate the customer into the product also there. One example is our overdraft interest rate, that is driven by the numbers of Likes we have on Facebook. Easy rule: The more likes we receive, the lower the interest rate on the overdraft. 

9. After establishing the first Fidor Hub in Germany, we now roll out internationally. We started in Germany, we now have a Russian franchise and we will come to market in the UK in the near future. 2015 it will go on like this, because Fidor has developed an international franchise concept.

10. In addition, one must see that we will connect these local franchise hubs in order to allow cost-effective real-time transactions between these local hubs then. Thats gonna be really cool and we will publish a press-release regarding a cooperation with a real disruptive partner in that segment in the near future.

And how do we manage all this? Well, we are currently a team of around 70 employees, unified by one mutual and super-important pre-condition: We have the right culture , the right spirit. Culture is therefore in a way more important than maybe the technology itself.

Did I forget something? Certainly …. yes. But, Jack, most important to me: you can tell Marc Andreesen and Chris Dixon that there is a really disruptive bank! That would be my only request… and wish ;-)) If I may be that open and frank.

Cheers

 

Matthias

Between FIDOR, the Open Bank Project and Avuba, it’s beginning to feel like the disruptive bank might come out of Germany, instead of the UK!