Is there room for everyone in the Mortgage space?

Last week was a whirlwind for anyone interested in the Norwegian banking landscape, and especially when it comes to the national mortgage offering:

The most notable change is the announced merger between Sparebanken Vest and Sparebanken Sør. This is interesting news considering Sparebanken Vest earlier this year applied for the rights to the name “Sparebanken Norge” (The Saving bank of Norway). The CEO of Sparebanken Vests hints that the bank will get a new name, stating, "The name of the new bank has not yet been decided, and we will have a thorough process to build the name and brand."

The merger could also strengthen Bulder Bank, an already successful challenger in the Norwegian market that has shown impressive growth with a 60% increase in lending over the past year. The merger could provide Bulder with additional resources, including stronger equity and lower operating costs.

Adding to the competitive landscape, Eika announced the launch of Penni, a fully digital banking concept focusing on everyday banking and mortgages. Directly competing with Bulder. The bank will offer competitive prices, but it's not aiming to provide the lowest mortgage rates in the market. They will launch at the start of next year.

At the same time MyBank is also joining the competition with a new ownership structure to try to fix the struggling bank. They aim to raise one billion kroner to build what they call "Sbanken 2.0," filling the void left by Sbanken. The bank plans to focus on mortgages for customers with a low loan-to-value ratio, specifically under 55 percent, as well as deposits.

These new developments join existing digital banking concepts that have already made their mark in the mortgage market. Fana Sparebank introduced Himla in 2020, while Sparebanken Øst offers Nybygger.

What we’re seeing now is probably a result of the banks seeing a potential in pushing the prices on mortgages (after all they had once again a strong half year), as well as the potential for economics of scale for a lot of these concepts to reach a larger audience. What I find interesting is that this hasn’t happened before, and that a lot of players has stood on the sideline seeing Bulder Banks meteoric rise.

It will for sure be interesting to see if the established banks also adapt their strategies. Will Nordea consider revitalizing its Nordea Direct concept in Norway? Will SpareBank 1 consolidate efforts around BN Bank? Will DNB do anything with their approach with Sbanken? Or what about Storebrand or Sparebanken Øst with Nybygger?

For the regular customer this surge in competition is good news. As new players enter and established banks adapt, we will most likely see more competitive pricing and improved digital offerings.

AI: Powerful, but imperfect

Large enterprises are hitting pause on Microsoft Copilot implementations due to significant security and data governance concerns. According to Jack Berkowitz, Chief Data Officer of Securiti, around half of the 20+ CDOs he surveyed in New York have either halted or severely restricted the use of Copilot in their organizations. The primary issue lies in Copilot’s aggressive data summarization capabilities, which may expose sensitive information—like salary details—that employees technically have access to but shouldn't be able to view. The dilemma is particularly acute in large corporations with complex permissions structures built over time, making it difficult to maintain clean, secure environments for deploying such AI tools.

However, the situation isn’t beyond resolution; Berkowitz suggests that robust observability and governance mechanisms are key to making AI systems like Copilot work as intended. But without these safeguards, initiatives to implement such technologies will likely remain grounded. No wonder we haven’t seen widespread implementation of AI in consumer banking yet. 😅

Real vs AI-generated

It isn’t always as easy to guess if something is real or AI-generated. Try out this mini-game where you're supposed spot the real vs. AI-generated Insurance companies:

https://realfakegame.com/

Lost in Translation: The Never-Ending Quest to Explain Your Website to Everyone

For the last week or so we’ve been working on rewriting and restructuring a landing page for a client. As we delved deeper into the project, a frustrating realisation dawned on us: How many times do we need to specify what our websites are about?

HTML is the foundation of every webpage. This markup language allows us to semantically tag our content, providing a roadmap for browsers, search engines, and other digital entities to understand the structure and meaning of our site.

But wait, there's more! Enter meta tags. So browsers can understand what your site is about and how to display it. Because apparently, the semantic structure of your HTML isn't enough.

Just when you think you've covered all bases, social media platforms crash the party. You've got to add Open Graph tags so Facebook, LinkedIn, and the rest of the social media circus can understand your site. Ensuring your site looks dapper when rubbing virtual shoulders with "Thought Leader" posts about AI in banking on Facebook and LinkedIn.

But we're not done yet! ARIA tags join the party, explaining everything again for screen readers. They patiently elaborate, "This is a button, in case you couldn't tell by the fact that it says 'Log in' in the shape of a button."

And just as you're about to call it a day, you need to add schema data (JSON-LD, microdata or similar). This is your website's way of holding Google's hand, gently guiding its all-knowing algorithm to understand that your "Secure Online Banking" page is, indeed, about secure online banking and not about piggy banks.

The next time you find yourself knee-deep in meta tags and schema data, remember: you're not just building a website. You're creating a digital Rosetta Stone, translating your content for every possible digital entity out there. With each tag and schema, you're building a more accessible, understandable, and discoverable web.

And who knows? Maybe one day, we'll look back on all this and laugh. Or cry. Probably cry. Because in this world of web development, one thing seems to be certain: we'll never run out of ways to say what our websites are about.

Cooperation that is not an alliance

The two alliances, De samarbeidende sparebankene (DSS) and Lokalbank Alliansen, have officially merged under the new name "Lokalbanksamarbeidet," with each member bank holding a 6.25% ownership stake in the alliance. The combined business capital of the alliance exceeds 150 billion NOK, serving over 250,000 customers and employing 625 staff across Norway. Bent Eidem, the former leader of Lokalbank Alliansen, will head the newly formed cooperation, which is not an alliance. The merger aims to provide smaller banks with economies of scale and enhanced collaboration in areas such as expertise, shared services, and technology, particularly through their connection with the Frende Group. This got me a bit curious and confused, so I tried to map it out for all of you:

(Haugesund Sparebank and Skudenes & Aakra Sparebank are going to Eika, and therefore faded out)

Banking Like It’s 1950

Why can only one person be the main borrower on a loan in Norway? In a world where everything from groceries to gadgets can be split between partners, why is the banking system stuck in a bygone era? Cecilie Wian, a consultant at Bouvet, is raising the alarm on this outdated practice, which disproportionately empowers men and leaves women in the dark when it comes to household finances. With a staggering 7 out of 10 primary borrowers being men, the current setup effectively makes men the "bank bosses" of the household, while women are often left without a say.

Wian isn’t just pointing out the problem—she's proposing a solution. She argues that it’s time for banks to embrace "equality tech" that ensures both partners have equal control and responsibility. Why not take a page from corporate governance, where significant financial decisions require multiple signatures? If businesses can do it, why can’t households?

Backing her up is Stine B. Neteland, COO at Frendegruppen, who believes that the answer lies in innovative tech solutions. She sees a goldmine of untapped business opportunities in the fintech sector for those willing to tackle the challenge of family finance equality. It’s not just about fairness; it’s about empowering everyone to take charge of their financial future.

Even politicians are catching on. Maria Aasen-Svendsrud from the Finance Committee for Arbeiderpartiet is open to the idea of legislative changes, despite potential resistance. After all, when has any fight for equality been easy?

It’s time for banks (and regulators) to face reality and catch up with the times. The tools to level the playing field are right there—it's just a matter of whether the industry is willing to embrace them.

Who is Nicolai Winther - The AI whisperer?

Ever heard of Nicolai Winther? No? Well, neither had I — until Open AIs transcription service Whisper started crediting him for transcription work he didn’t do! Is he a real person, an ex-YouTuber with a penchant for subtitles, or just a figment of AI’s imagination? Lars Andreassen from BEKK dives deep into this bizarre case where a 23-year-old Norwegian somehow became the ghostwriter for AI transcriptions in Norwegian. Read on to find out how a mix of hallucinations, copyright chaos, and some fishy data credit Nikolai Winter for everything.

It's been quiet on the newsletter front for six months, and I have a couple of good reasons: I've been busy with client projects, and we welcomed our third baby girl this spring—so it's been a whirlwind!

As we prepare for a busy autumn with more frequent newsletters, we'll keep this first newsletter short, light and engaging:

Welcome back!

If you thought it was brutal returning from vacation, I can assure you it is even more brutal for analysts working at Goldman Sachs. According to a recent survey amongst 13 first-year analysts, they worked over 95 hours per week and slept on average 5 hours per night. The best quote is: «I’ve been through foster care, and this is arguably worse». Well, at least it’s for a good cause. 😆

While some finance professionals are working themselves to the bone, others are focusing on making financial services more user-friendly:

UX isn't given enough credit as a Fintech Superpower

I nearly tore a muscle in my neck from nodding so vigorously while reading this article by Simon Taylor about how crucial user experience is in fintech. He shares that while many tech teams want to create a smooth, "frictionless" experience, they quickly realize that the finance world is really complicated, with lots of tricky edge cases to consider.

For example, making a simple loan application involves navigating a ton of regulations and ensuring data accuracy. Traditional banks often miss the mark on UX, thinking it’s just about looks, which gives fintech companies a big opportunity to step in and disrupt the market with better experiences.

A great example of this was how the incumbent banks in Norway didn’t want to use Vipps initially and implemented their own form of peer-to-peer payment, thinking it was just to connect a phone number to an account number, but that is wasn’t as easy.

Simon Taylor highlights some cool examples of great UX, like Shopify Pay’s easy checkout process, Monzo’s fraud prevention tools, and Ramp’s clever expense management features. These companies focus on solving real problems for users, which makes a huge difference.

As fintech companies continue to innovate in user experience, another technological wave is poised to reshape the industry even further.

The AI Revolution in Banking

Ever thought about how terrible humans are at optimizing their finances? Matt Harris from Bain Capital lays it out in this compelling talk about how generative AI could flip the banking industry on its head. Picture this: AI agents doing all the heavy lifting, ensuring your money works for you. But banks won’t probably be in the driving seats as they no longer can profit off consumer laziness because AI has taken over financial optimization. See the full video here.

Speaking of AI implementations: Ben Thompson analyzes the diverse AI strategies of major tech companies, ranging from vertical integration to full modularity. It's notable how each company is taking a unique approach.

Disdain for the AI hype

However, not everyone is jumping on the AI bandwagon with unbridled enthusiasm. In fact, some are reaching their limit with the hype. In this hilariously over-the-top rant, Nikhil Suresh expresses his absolute disdain for the AI hype train, promising to deliver a "chiropractic adjustment" to anyone who brings up AI without a solid plan. He argues that while AI has potential, most companies are just grasping at straws and failing to manage basic tasks—so instead of blindly chasing the latest tech buzz, maybe they should just fix their existing problems first!

Lunar's Last Stand:
Racing Against the Clock for Survival

As we've covered before, Lunar tried backing out of the deal of buying Instabank for 1,4 billion NOK after getting a backlash from the Financial Supervisory Authority of Norway. Instabank shareholders then accused Lunar of buyer's remorse and not fulfilling their end of the agreement. This week, the court decided that they sided with Instabank, mandating Lunar to cough up over 630 million NOK for 1,77 NOK per share, tax disadvantages faced by some shareholders, and legal fees.

Despite an immediate appeal and a capital injection of around 300 million NOK from existing shareholders for growth, Lunar faced further setbacks. The Danish Financial Supervisory Authority demanded that Lunar accounts for the potential loss, pushing Lunar into a dire financial position that failed to meet new, stricter capital requirements. Lunar now faces a deadline to propose a solution to satisfy these requirements by Friday, with a shortfall of approximately 116 million NOK.

If you thought banking was boring, think again. Lunar's story has all the trappings of a blockbuster – ambition, drama, and a ticking clock. As time passes, Lunar is in an intense and suspenseful situation, echoing classic underdog stories. The question remains: Can Lunar navigate this financial storm and unveil a master plan in time?

Adobe XD is dead – What can we learn from Figma's growth?

In 2022, Adobe announced that they would acquire Figma for $20 Billion - the tool many designers and developers use to sketch their solutions. Late 2023 it was announced that the sale didn't go through because of antitrust regulators, and Figma received a $1 Billion break up fee (Giving them a $12 billion ARR 😂)

Twitter tweet

1 Month after the deal fell through, Adobe has now announced that they are killing off Adobe XD, and InVision is shutting down their design collaboration services. This basically leaves the only competitor to Figma being Sketch, (and potentially Framer).

https://uxtools.co/survey/2023/ui-design/#ui-design-yoy-graph

But what is interesting is how Sketch in 2017 had almost 70% of the UX-tool market. I've thought about how Figma conquered the market in such a short time. Here are seven reasons why, and what we can learn from it:

1. Plattform agnostic: Sketch was only available for Mac and took years to be shareable on the web. Meanwhile, Figma worked in the browser, making projects instantly shareable. Design can't be created in a vacuum, and excluding all Windows users made it harder for Sketch to grow.

2. Customer journey: Figma recognized the problem of files (Design_final_final_v2.sketch anyone?) and launched a project format similar to Google Docs. Look at the whole customer journey when creating products. Your solution might be hidden in something as trivial as naming.

3. Multiplayer: By pioneering multiple cursors, Figma made it possible to collaborate on the same document simultaneously. This supercharged their progress since new users constantly used Figma. A social or viral aspect built into your product can skyrocket your growth!

4. Community: You get 100 million hits if you search for "Sketch assets" on Google. Figma noticed the popularity of providing assets to designers and created a community built into their app to share assets. This produced a powerful loop where everything was available in the app.

5. Plugins: Sketch had a mature plugin system, but you had to download files (often from GitHub) and install them. Figma successfully lowered the installation threshold by clicking a link in the community. Plugins enabled other people's creativity while tying them to Figma.

6. One tool to rule them all: As a designer using Sketch, you used multiple tools to share assets with developers, share files with other designers, and create prototypes. Figma merged collaboration, project sync, comments, developer documentation, and prototyping into the same tool. This made it easier for larger companies to justify the cost of one tool instead of multiple tools.

7. Migration: Migration from another service is always a pain. Figma saw this and built a feature to import Sketch files into their environment. The importer kept the layers intact and brought over symbols as components, making migration seamless.

Over on X, Clark Valberg from Invision reflects on why Invision went bust in this market. The short story was that designers moving quickly from Sketch to Figma disrupted them, which dismantled their value chain.

Credit card debt Leaderboard

It's been a long newsletter this week. Here are two short and fun posts to end things. Soren Iverson daily creates unhinged product design concepts. Here is one of his ideas for credit cards:

Twitter tweet

Button thief

Anatoly Zenkov has made the most fun and useless browser plugin I've seen in a while: It steals buttons from all the websites you visit and adds them to a collection of your stolen buttons. 😆

Download "Button Stealer" here.

Button stealer

A new era of payment innovation?

January 19, Apple proposed a solution to the EU that opens the NFC chip on iPhone and lets third parties use tap-to-pay. Vipps MobilePay has been pushing for this for a long time! Rune Garborg, CEO of Vipps, is, however, still not popping the Champagne bottle:

Garborg might be right in being cautious, considering how Apple implemented external payment methods in the app store. However, this opens up a lot of interesting possibilities. Stacc UX lead Eivind Kjellevold has written a thorough blog on his thoughts about the recent proposal and what this has to say for the payments space and users.

"DNB is almost conducting a controlled discontinuation of Sbanken"

... says the CEO of Obos-banken, Øistein Gamst Sandlie, in a press release after 2,000 new accounts were opened in the bank. The reason? DNB sent out a mail to all Sbanken customers saying:

For many customers, this was the last drop after DNB removed Apple Pay and later announced that you couldn't be a customer in DNB and Sbanken. Both Bulder from Spv, OBOS, Nordea, and more are reporting a large influx of customers after DNBs announcement.

From a purely economic standpoint, it makes no sense for DNB to have two core systems and two completely different apps where nothing is reused. However, you can question why DNB is trashing the platform with the most pleased customers and where you could perform every task on your mobile phone.

Why so vague?

I have a harder time understanding why the customer communication from DNB is so vague. Bankshift got a few more answers in their interview with the responsible for the development of the new app, and from that interview it seems like they don't know what is ready when they reach March 27.

Everyone who has been a part of a process like this knows how chaotic it can be. But you also understand there are plans and sketches for how the app will look and work. Why not present some screenshots for the Sbanken customers as a new upgrade? Why not present this as proof that DNB invests in their Sbanken concept? Why not just be open, straightforward, and simple which is (or was?) the values for Sbanken?

Customer experiences through a bank switching process

As I was researching this newsletter, I came across a Master's thesis in economics and administration at UiT - the Arctic University of Norway, written by Anja Isaksen in 2022 about "Customer experiences through a bank switching process". The study found that customers switching banks desire a simpler and more streamlined onboarding process with fewer steps and points of contact. Key frustrations associated with switching included the effort, time, and uncertainty involved in switching banks. But despite dissatisfaction with the switching process, customers were generally satisfied with the outcome due to lower costs and higher value in the new bank. And just for the record, I've made sure to credit all my sources here.

AI-Powered Spatial Banking

On February 2, Apple will launch Apple Vision Pro. This is an entirely new platform for Apple and naturally gets much attention from designers and developers. Now UXDA has delivered the first concept I've seen on spatial banking, or banking in Vision OS. My summary is that there isn't anything revolutionary in this concept other than that the interface seemingly flies into space and follows the new conventions of Vision OS.

But I find two things especially interesting with the addition of spatial computing in banking. The first is the natural possibility to visualize more abstract numbers:

• Visualize all your money as a pile of cash

• See your mortgage as a bottomless hole in the floor

• Or ride a rollercoaster on the Bitcoin exchange rate

The second thing I find interesting about spatial computing in banking is the ability to think about more screens. When designing for apps and the web, you must consider the smallest device and scale it from there. But when designing for spatial computing, you suddenly have more real estate available and another dimension outside the "screens." This opens up a lot of new, exciting concepts!

Twitter tweet

My love/hate relationship with BankID

I just bought a car. Do you care to guess how many BankId signings I needed to buy the car and apply for a loan?

1. Sign contract

2. Sign in to apply for a loan

3. Sign in to SBL/Altinn

4. (I also needed to log in to my bank and Lånekassen to find information for the application)

5. Sign in to my page to see the loan offer

6. Sign a confirmation of identification (🙈)

7. Sign in to see the loan offer

8. Sign loan offer

9. Sign in to see the mortgage document

10. Sign mortgage document

11. Sign in to The Norwegian Public Roads Administration to change the owner

12. Sign in to Digipost to see confirmation from The Norwegian Public Roads Administration

13. Authenticate again to see the message of the owner change in Digipost

Yes, we are fortunate that all this can be performed digitally and that all these services talk together. (And yes, some of these sign-ins could have easily been avoided). But it poses a more significant question if Bankid should try to make multiple authentications easier or less strict. For long, I've been annoyed that SBL needs another BankID signing on loan applications, often right after you've just authenticated yourself with Bankid. I know this is because the process needs to be secure and robust customer authentication is needed, but imagine how much smoother this process could have been if Bankid was able to persist my authentication, and if I, for the next hour or so didn't have to go through the entire sign in process. BankId could then only ask me to confirm it's still me in the app, and not ask me to type my password 15 times.

Coding in the age of ai

Raido Pikkar, Chairman of Thorgate Group, writes in Shifter that:

"The best developers will be able to do most of the work thanks to artificial intelligence. Pure code writers will, in practice, become redundant." He continues: "Developers cannot limit themselves to being pure code writers. They must think more broadly and strategically about customer needs and business context, as well as place a greater emphasis on innovation and renewal."

There might be something in what Raido Pikkar says: Cornell University conducted a study using data from an online labor platform, challenging the notion that AI will only benefit human workers without replacing them. The research highlights instances where AI tools are already replacing certain jobs while boosting earnings in other sectors. 

The study focuses on language translation as a prime example, revealing a 30% decline in earnings as AI tools like ChatGPT and Bard outperform human translators. Additionally, the research suggests that fields like web development and machine learning are currently in a "honeymoon phase" of AI assistance before potential substitution. Notably, the study proposes that Machine Learning Engineers face a higher risk of being replaced than Software Engineers, citing the linear structure of ML code and the greater availability of publicly accessible ML models as contributing factors. The overall message discourages switching to machine learning as a safeguard against AI replacement, emphasizing the broader impact on various professions.

In my opinion, many developers already think more broadly and strategically about customer needs and business context (at least at Stacc and other companies I've worked with). Still, I think a good comparison here is Chess: almost thirty years ago, computers started to beat the best chess players, and people feared there was no reason to play Chess anymore. Yet Chess has never been more popular than it is today. AI has actually helped revitalize the game. 

James Somers has written a beautiful text about this and his feelings around coding as a craft in the age of AI: "The thing I'm relatively good at is knowing what's worth building, what users like, how to communicate both technically and humanely. A friend of mine has called this AI moment "the revenge of the so-so programmer." As coding per se begins to matter less, maybe softer skills will shine."

GPT-4 is impressive, but a layperson can't control it as a programmer can. Maybe the future of the programmer will be more like the quote attributed to Einstein: "If I were given one hour to solve a problem, I would spend 59 minutes defining it and one minute resolving it."

Evan Armstrong also writes about this in Automate the Simple Stuff With Stupid Tools: "Over the next few years, a decent percentage of thinking you do today will no longer be required (or compensated). This is the dumbest this tech will ever be. It is the least used, least deployed state of AI. From here, it only gets more sophisticated and more integrated into our lives."

EU AI act

Last week, European Union lawmakers secured a political deal on a risk-based framework for regulating artificial intelligence (AI). The negotiations spanned almost three days, resulting in a series of prohibitions for AI applications. The key points include:

• Biometric Categorization: Prohibition on using AI for biometric categorization systems involving sensitive characteristics such as political, religious, philosophical beliefs, sexual orientation, and race.

• Facial Recognition Databases: Total prohibition on untargeted scraping of facial images from the internet or CCTV footage for the creation of facial recognition databases.

• Emotion Recognition: Ban on applying emotion recognition in workplaces and educational institutions.

• Social Scoring: Prohibition on social scoring based on social behavior or personal characteristics using AI.

• Manipulation of Human Behavior: AI systems cannot manipulate human behavior to circumvent free will.

• Exploitation of Vulnerabilities: Prohibition on using AI to exploit the vulnerabilities of individuals based on factors such as age, disability, and social or economic situation.

The EU lawmakers seem to have struck a balance between innovation and safety. Still, some civil society groups express skepticism, particularly regarding limitations on state agencies' use of biometric identification technologies. The formal adoption of the law awaits votes in the European Parliament and the Council.

Apple opening its NFC for Vipps?

Apple might be opening up its NFC chip to third parties, which means iPhone users could soon use other digital wallets, including Vipps! Vipps CEO Rune Garborg is thrilled but cautious, waiting for official EU news. Vipps has, over the last few years, criticized Apple's NFC monopoly, preventing customers at DNB and others from using Apple Pay. Now, it seems Vipps might be winning as Apple proposes a solution to the EU amid a competition case. The twist comes with a potential fine for Apple, pushing for fair competition. It will be interesting to see how this unfolds!

How to design car interfaces?

We jokingly say that we in Stacc work with "Bank og Bil (cars)." This is even more true now that we are a full-service provider in the asset finance industry. Personally, I've always found the UIs for car interfaces fascinating (and often bad). For this reason, I was thrilled when I saw The Turn Signal and its blog post on The 8 Guidelines for Good Automotive UX Design. Most of these guidelines can also be transferred to other UX designs. If you are interested in the topic, I also recommend these interesting blog posts:

• The Rise of Touch Screens in Cars Explained

• A Guide to Prototyping Automotive Interfaces

Banking app trends

Our report on the state of Scandinavian banking apps has gotten a lot of attention over the last month, but one thing we didn't write about is a trend that Ivan mentioned on stage. This is how banking apps looked in 2011, 4 years after the launch of the iPhone:

While most banks today have adopted a different pattern with the bottom tab bar and look more or less the same:

Left: previous versions of Revolut, Right: newest version of Curve

I'm leaning toward this being a step in the wrong direction and that banks will launch more apps like DNB and DNB Spare instead. It is also telling that Revolut, in their latest update, Revolut 10, has removed this setup throughout their app. (I'm also noting that Revolut is branding their app with new versions as it is a new iPhone they are launching)

The best inventions of 2023

Time magazine has just launched its list of the 100 best inventions of 2023. I didn't find any banking or finance-related app besides Adobe being awarded one of the best innovations for their Adobe Liquid mode. It uses an algorithm to resize PDFs to fit whatever device you're reading on and allows font resizing and search. This might interest many banks, considering their favorite format is pdf-files in A4 format presented on a tiny phone.

Pdfs everywhere in Norwegian banking apps

Stacc goes to Denmark

Stacc becomes a Nordic full-service provider in the Asset Finance industry by acquiring Bytelab, which delivers a software solution for leasing and financing cars in Denmark. The strategic acquisition represents a significant investment in our ambition to become the largest vendor for the Asset Finance industry in the Nordics – a natural step when looking at some of Staccs' first customers: Brage and AutoPlan.

Interesting news.

Stripe launches Tap to Pay in the Stripe App

Stripe launches ap to Pay directly in the Stripe app. For Android that is. When this comes to iPhone is another story. 😅

Stripe on LinkedIn

Apple 💔 Goldman Sachs

The partnership between Apple and Goldman Sachs for the Apple Card may end earlier than planned, within the next 12-15 months. Relations between the companies have soured significantly since launching the Apple Card in 2019. Goldman Sachs wanted the Apple partnership to be a cornerstone of its push into consumer banking but so far they have just lost money.

www.bankshift.no

Test Your Economic Knowledge - Can You Beat a Swede?

This summer, the Swedish Financial Supervisory Authority reported that 1/4 of all Swedes lack basic economic knowledge despite increased confidence in their economic understanding. Not surprisingly, men report high financial self-confidence and knowledge, while women and people under 30 report lower self-confidence and expertise.

Therefore, FI has developed a test covering four areas: conceptual knowledge, percentage calculation, risk diversification, and consequential thinking. Here, you can take a quick test and see if you have better financial knowledge than the average Swede.

Avoid arguing - get the facts

Patrick Campbell, the founder of Profitwell, was tired of arguing with his better half about having phones at meals, the position of the toilet seat, or if his wife looked fat in specific dresses. As a good researcher, he sent all the data out to marketing panels to get the answer (With consent). You can read the whole story here. The quick summary is that:

• 96% said his wife did not look fat in the dress

• 86% have phones at dinner

• 63% don't care about the position of the toilet seat

The state of Scandinavian banking apps

In the last newsletter, we announced that we've analyzed 149 banking apps across Scandinavia. If you want to read our full report, all our current subscribers get it for free in the bottom of this mail 😉 , if you aren’t subscribed you can register here to download the report.

Here is the executive summary and some of the most interesting findings from the report:

1. Naming Convention: Out of 140 apps, approximately 54 apps use "Mobilbank" or "Mobile Bank" as part of their name in both the App Store and Google Play. The lack of unique app names could lead to confusion and search difficulty for users.

   

2. Impact of Bank Reputation on App Ratings: Significant events such as the discontinuation of ApplePay-support for Sbanken led to an influx of negative ratings on iOS. This suggests that users' perception of the bank and decisions can significantly impact app ratings since this is one of the few places customers can react. Curve (an Apple-Pay alternative) also saw a 5 200% spike in sign-ups from Norway after this news broke.

   

3. Variety in App Features: There's a significant disparity in the availability of app features among the different banking apps in Norway. The deep-dive reveals lacking features such as family account features, joint accounts, in-app mortgage services, and more in several banks, which could impact user experience.

   

   Our mapping of all the features in banking apps in Norway

4. Effects of Custom-made vs White-label Apps: Custom-made apps generally garner a higher average rating than white-label apps, indicating users may perceive them more favorably. This would suggest that while white-label apps form the majority in quantity, they might lag behind in user satisfaction.

   

Bankshift also did a more extended interview with Ivan Hjelmeland and me after we presented our report.

Moving mortgages in Sweden

Say what you want about that moving mortgages in Norway is a hassle. Still, in Sweden, it is even more challenging: To transfer your mortgage, you must provide a document from your existing bank containing the amortization terms of your home loan. This currently creates a lot of friction, and SBAB is the only bank that voluntarily provides electronic documents, while other banks only provide paper copies. Some banks even use amortization schedules to delay customer transfers or negotiate discounts to retain business. The Swedish Financial Supervisory Authority (FI), therefore plans to introduce a requirement for banks to provide mortgage amortization schedules electronically to increase competition and customer choice by reducing barriers to changing banks.

Spotify – a bank machine for criminal gangs?

An investigation by Svenska Dagbladet has revealed a sophisticated money-laundering scheme where Swedish criminal gangs are exploiting Spotify's streaming service. According to the investigation, the gangs convert their proceeds from illegal activities, such as drug trafficking and contract killings, into Bitcoin. This cryptocurrency is then used to artificially generate streams on Spotify for tracks released by artists affiliated with these gangs, effectively laundering the money when Spotify pays out for these streams.

Since 2019, these lawbreakers have been orchestrating a symphony of deception that resonates with Sweden's rising gang violence, with some confessing that this method is now a standard in their criminal repertoire. On their side, Spotify hasn't found "any data or hard evidence that indicates that the platform is being used at scale in the fashion described."

Sillycovalley - a startup game

Fairpixels, a design company helping startups, have created this fun game called sillycovalley. It is a fast-paced startup simulation game where you play the founder of a tech startup. You've just secured some money and are working on building a product people love and grow to as many users as possible before your funds deplete before demo day.

Download the full report

As a thank to all our current subscribers you can download the full report here:

State of Scandinavian banking apps

What can 149 banking apps across Scandinavia tell us about the most important features, best frameworks, and top trends in mobile banking?

Together with Ivan Lé Hjelmeland from Shortcut and Martin Lund, I have created a report on the state of Scandinavian Banking apps based on apps distributed in Norway, Denmark, and Sweden. We'll present the findings in Oslo 25. October, Stockholm 26. October, and Copenhagen 27. October.

Join us there and learn how banks across the Nordic region are evolving their mobile banking services to meet the needs of their customers in the digital age. In each country, we are joined by the creators of some of the best-rated apps in the App Store, who will share how they are working with their products:

• In Oslo, we are joined by Bulder Bank from Sparebanken Vest

• In Stockholm, we are joined by SBAB

• In Copenhagen, we are joined by SDC

Sign up here if you want to join the breakfast seminar!

Vipps Gifts Itself a Price Lift on Wrapping

Last week, VippsMobilepay sent out a mail to all customers stating that they would raise the price of their digital gift wrapping from 5 NOK to 8 NOK. I've previously been quite vocal about my opinion about the feature, but if you come to think of it, the price raise can make sense in multiple ways:

• Inflation hit the digital paper market hard.

• Vipps has a lot of expenses for disposal fees when they need to trash all the digital gift paper.

• Vipps buys the digital gift paper from a third-party gift wrapping API that has raised its prices (kudos to them for finding a niche).

• The price increase is a savvy move by Vipps to curb excessive giftpaper use - a sustainability initiative to save the digital forests.

• Vipps decided they needed to up their game in the competitive world of digital gift paper and hired renowned digital paper artists to create custom patterns.

• High demand led to a digital gift paper shortage. Scarcity creates value, so prices naturally go up.

When Fraud Goes Wrong: Comedy at the FTX Trial

We've previously covered FTX and its spectacular collapse. The fraud trial has started and exposed some not-so-smart coding by former employees that has provided amusing evidence for prosecutors.

The defendants seemed to think they could fool people with some random number generator to pretend an "insurance fund" had real money in it:

Product in Norway 2023

Marius Røstad has launched Product in Norway 2023 - A survey on product management/leadership in Norway with answers from over 200 product managers in Norway. Most of the respondents work in large companies based in Oslo.

Some interesting key insights:

• Respondents strongly focus on users - over 85% spoke to customers or users within the last month.

• Respondents care more about organizational challenges than product development challenges.

• Only a third have a clear product strategy or vision; few validate these with users.

• Product managers and teams lead decision-making.

• In the public sector, a lot are basing their prioritization on legal requirements.

• There is room for more business focus, as financial goals are less important than user metrics for measuring success.

Lull yourself to sleep with legalese!

Ever find yourself struggling to fall asleep counting virtual sheep? A new project called Legal Lullabies has the solution - listening to recitations of lengthy software terms and conditions. It is guaranteed to bore you to sleep in under an hour!

The Lazy Data Research, a Swedish art collective, had the hilarious idea of turning popular social platforms' dry legal language into bedtime stories. Read by a soothing voice; you'll be snoring before you can say "non-transferable license."

The initiative, called Legal Lullabies, comes in two forms: An Instagram version, titled Zzzuckerberg; and a TikTok version, titled Zzzhang. The Instagram version is 51 minutes long, while the TikTok version is nearly 38 minutes long.

Unjustifiably gloomy representation of Norwegian Fintech

Last issue we wrote about Finansforbundet and Ontogeny Group report, "Fintech 2023 - status of the Norwegian fintech sector.". It painted a dark picture of the current state of the Norwegian Fintech market. The CEO of Finance Innovation, Bent Gjendem, believes that the situation for Norwegian Fintech is brighter than what the recent debate may give an impression of and that the study bears the mark of "filtering out" some of the enormous success stories we have within Fintech to paint an unnecessarily gloomy picture.

Bent presents three perspectives that make the picture of Norwegian Fintech a little brighter and more nuanced:

1. The decline does not only affect Fintech. It is something the whole tech industry sees at the moment. According to KPMG global analysis Pulse of Fintech H1'23, Fintech funding worldwide was significantly subdued in the first half of 2023 due to various market challenges, including high interest rates, macroeconomic challenges, geopolitical tensions, and lower valuations.

2. It takes time to build an industry (and needs to be invested in politically). In Norway, Fintech is relatively new, and many companies in the report are still in the scale-up phase. Norway has all the prerequisites to take a clear position in this market, but it requires us to set a clear direction and invest politically in Fintech as a future export and growth industry.
   

   Rune Garborg, CEO of VippsMobilepay, holds a similar outlook. He's urging politicians to hasten the Financial Authority of Norway's process for reviewing applications. He is confident that accelerating this procedure could immensely impact the industry, facilitating progress in approving new financial technology solutions. "It takes longer to acquire licenses and approvals than to develop products," Garborg notes. He expresses concern that if the sluggish pace continues, Norway's payment services may lose ground to their American counterparts.

3. Forgotten banking successes. Bent also questions the exclusion of successful digital banks like Bank Norwegian, Morrow Bank, Lea Bank, and Instabank from the Fintech report due to their dominant presence. When they earn 48% of all the revenue in the industry, it is questionable to exclude them from a report and paint a dark picture of the rest of the companies. (And as I pointed out last issue, it is also questionable to drop 1/3 of the data (69 companies) due to timing of annual results.)

EPSI – a new low and new winner

Every year, EPSI does a survey examining customer satisfaction within Norwegian banks. The primary finding from 6,000 interviews with private customers and businesses in 2023 is that they are more dissatisfied than ever – matching the record low from their 2004 survey.

Source: EPSI

According to EPSI, there is no clear evidence that the quality of banking services has deteriorated. However, customers feel they are getting significantly less' bank for their buck' compared to the past, possibly because of rising interest rates and because banks are quicker to raise lending rates than deposit rates.

The most surprising (or less surprising?) difference this year is that Sbanken, after 20 years of continuous victories in the private market, has lost its throne to Bulder by Sparebanken Vest.

This year's survey also reveals a notable increase in the use of contactless payment solutions such as Apple Pay, Garmin Pay, and Google Pay. The proportion of customers using these solutions has risen from 19% to 30% over the past year. EPSI also observes that these customers perceive their banking relationships as simpler and express higher satisfaction and loyalty than customers who do not use these solutions. Providing this type of payment solution could be a critical factor in attracting new customers and creating a more straightforward and better banking experience for customers - especially in the younger and urban customer segments.

Below is a comparison of last year's EPSI rating compared to this year. For comparison, we've also annotated which banks support ApplePay:

Source EPSI last year and this year

Rival banks unite to take on Big Tech

It isn't just VippsMobilePay trying to take on Apple and Google in their fight for mobile wallet domination.

The leading banks in America are bracing to launch the newest countermove in their ongoing struggle to protect their domain from Big Tech conglomerates. JPMorgan Chase, Bank of America, Wells Fargo, and several others have outlined plans to initiate a venture called Paze next year. Paze is a mobile wallet designed to directly sync with the credit and debit card accounts of 150 million customers. Early Warning Services, a consortium of banks that already operates the payment app Zelle, will be responsible for managing the app.

The best interface is no interface

Image: Fast Company

Sometimes, the best interface is no interface at all... This was the result when Capital One designed its new ATMs to be cardless. Instead of working on the interface of the ATMs, they looked elsewhere. Customers can now pre-stage their transactions via an app, indicating the desired withdrawal amount. Upon reaching the ATM, they merely have to scan a QR code to receive their cash, eliminating the need for a card or direct contact with the machine.

Since introducing this system, Capital One observed a significant reduction in the time customers take to withdraw cash, transforming the experience into a fluid, secure, and entirely digital process, and winning the Fast Company's 2023 Innovation by Design Award in the Finance category.

The state of the Norwegian Fintech sector

For the fourth time, Finansforbundet and Ontogeny Group released their status report called "Fintech 2023 - status of the Norwegian fintech sector." This time, it is based on the companies' 2022 figures, and it is not a cheerful read. Summed up, several new companies have emerged, but the overall revenue growth has stalled in 2022, losses are increasing, and only a few companies are experiencing substantial expansion.

The report might show a trend, but if one is to be precise, the report dropped 1/3 of their data (69 companies) due to a lack of submission of annual results (perhaps to finish the report for Arendalsuka?). One of these is Signicat, which, in previous reports, has been one of the largest companies. Signicat's figures from earlier years have, therefore, been removed in this report to ensure that the aggregated figures provide a more representative picture of the development. However, I still find it weird to present a report where you have dropped 1/3 of the data based on when the annual reports are delivered.

Christoffer Hærnes argues that Norwegian Fintechs are struggling because of fragile revenue models in an industry where it turned out to be anything but easy to provide financial services without being a financial institution. Just ask Vipps Mobilepay, who has applied to become a financial institution. This comes after their application to become a payment institution to offer a payment deferment of 14-30 days was declined.

On the other hand, banks are making more money than ever, while most notice that their wallets are slimmer. This has started a discussion of whether banks have responsibility for their customers' economy. Many politicians and consumer authorities say yes, while other experts say no.

Customers have an effective leverage, and that is switching banks. However, when only 7 percent take advantage of this opportunity, banks can stay put and watch their profits grow. In comparison, 36 percent switched electricity suppliers in 2022. A lack of competition influences the low switching rate. Still, more importantly, it is due to banks offering similar services and comparable digital solutions, and more than anything else, customers perceive a high cost and inconvenience when switching.

BNPL sidenote

An interesting finding from Horde is that young persons (18-24 years old) who use Klarna (BNPL) have four times higher debt growth than those who do not.

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Swedish measures against over-indebtedness are not sufficiently powerful

The previous Swedish government initiated an Over-indebtedness investigation recently published during the summer. The purpose was to counteract over-indebtedness and, in particular, to submit a proposal for a debt register where creditors can report on credits and debts to get an overall picture.

The Swedish association Svensk Inkasso participated in the investigation, but is now criticizing the fact that the investigation's proposal is not powerful enough, as it stopped short of proposing a debt register which, in principle, only includes information relating to credits provided by banks, credit institutions, and consumer credit institutions. Thus, data from the debt collection companies has been omitted, much like in the Norwegian Debt register.

A visual introduction to machine learning

We came across this excellent explanation of machine learning and how computers apply statistical learning techniques to identify patterns in data automatically. These techniques can be used to make highly accurate predictions. Highly recommended to read if you work in the Fintech space to get an idea of how this works:

A visual introduction to machine learning

Design as a Service

This week, we launched a design subscription for Banks, Fintech and insurance. At Stacc, we pride ourselves on helping countless clients in the banking and fintech sectors enhance their User Experiences. Our expertise has traditionally been provided on a project or short-term basis, but once our initial work is complete, many clients find it challenging to handle many design responsibilities without any designers on board. That's why we’ve launched Design as a Service, where you, for a flat fee, can get your design needs handled as a cost-effective alternative to hiring full-time employees or consultants. You can read more about it on LinkedIn or just reply to this email if you want more details.

Python in Excel

Excel news in this newsletter always performs very well. I therefore had to add that Microsoft is bringing the popular programming language Python to Excel. A public preview of the feature is currently available for Windows users, allowing Excel users to manipulate and analyze data with Python.

Python inside a Microsoft Excel spreadsheet. Image: Microsoft

Danske Bank exit the Norwegian market

Right before we went on vacation, Danske Bank announced that they would exit the private market in Norway. Now they have announced that Nordea is the buyer and takes over approximately 285 000 customers. The sale, which includes relevant investment products, is expected to be finally completed in the second quarter of 2025 at the latest. That is if the Norwegian competition authorities approve the sale. With this sale, Nordea will go from 11 percent of the Norwegian market to 16 percent.

Meanwhile, Monzo is reportedly in talks to merge with Nordic rival Lunar. A proposed agreement would significantly increase the presence of both challenger banks across Europe. Lunar has 650,000 users in Denmark, Sweden, and Norway, and Monzo has 7.5 million customers in the UK.

Stacc expands mortgage loan initiative to Sweden

Staccs' Swedish expansion continues with our recent acquisition of StoEr Technologies AB, a Swedish Fintech company based in Stockholm. This marks our second acquisition in Sweden and reinforces our focus on digitizing the mortgage journey. StoEr has spent years developing a fully automated platform for credit processing and mortgage distribution. They have established a strong foothold in the Swedish mortgage market, thanks to Söderberg & Partners as a customer and majority owner.

The EU-US Data party is on again

Picture the internet as a wild party and data as guests. European data has been finding it hard to swing by parties hosted in the US for the last few years. Well, not anymore! The EU and USA joined hands, worked some magic, and created a whole, shiny new framework that makes it easier for European data to party in the US. This framework got the green light on July 10th and had folks dancing on day one.

If the US company you are transferring data to is on the EU-US Data Privacy Framework list, you can transfer data without any new paperwork or additional security measures. It's like having your name on the guest list of a club. Currently known companies like MongoDB Inc, Microsoft, and Hubspot are on the list. The same rules as before apply for businesses not on the list.

As always, GDPR rules are the trusty dress code that still applies, despite the new framework. This means that data processing agreements and risk assessments are still part of the safety dance.

In essence: Some European data is now free to mingle with more confidence on US turf, but it's good to be prepared for any sudden changes in the data protection landscape due to the legality of the tools now switching on and off like a fickle light switch.

Data visualization crimes

Eivind Berg has written an interesting blog post on different forms of data visualization crimes you should look for. He has also tried to describe what is an exemplary graph. Some of his key takeaways:

• The graph should be readable and easy to interpret.

• Everything should be described. You should not have to wonder what the X-axis or Y-axis means. The graph should have a descriptive title.

• The colors used should be appropriate.

• Use the right type of graph for the purpose.

• Be cautious with pie charts. It's harder to interpret angles than bars.

• Be honest: Use the correct X and Y axes.

Eivinds favorite-graph? A good Sankey diagram:

Invisible Details of Interaction Design

If there is just one piece you should read (watch?) from this issue, it is this article from Rauno Freiberg on Invisible details of Interaction design. Here, Rauno delves deep into the why behind great displays of interaction design. If you liked this, you'll also enjoy Raunos' non-exhaustive list of details that make a good (web) interface.

Illustration of real-world pinching in Raunos article.

Applying AI to Finance

You can’t go online anymore and don’t read about the latest advancements in AI. ChatGPT set the record for the fastest-growing user base in history, with over 100 million active monthly just two months after launch. And if you’ve used it, you probably get why. But how are banks and fintechs leveraging this technology? Here are some relevant links we’ve come across during the last weeks:

• Parthean AI: A chatbot where you can ask questions about your money, build personalized financial plans and get advice about your money.

• GPT Portfolio: People are reporting that ChatGPT is outperforming the most popular investment funds; therefore Autopilot created “The GPT Portfolio” and invested 22 million dollars so far based on advice from ChatGPT. So far the strategy is +3,4%, while S&P 500 is +4.60% in the same timeframe. 😬

• BloombergGPT: Bloomberg has released Bloomberg GPT a 50-billion-parameter large language model for finance trained on press releases, news articles, and filings. This is useful for streamlined financial reporting, advanced risk assessment, and customized financial advisory.

• The Impact of AI on Developer Productivity: Evidence from GitHub Copilot shows that developers with access to the AI pair programmer completed the task 55.8% faster than the control group.

• Ramp: Uses AI to help you understand whether you pay too much for software and auto-fill your expenses.

AI is a numbers game

The possibilities of AI seem endless, and as the technology advances, we can expect to see more innovative applications. But AI is a numbers game.

“The quality of machine learning and NLP models comes down to the data you put into them,”
– Gideon Mann, Head of Bloomberg’s ML Product and Research team.

The more data you have, the better your predictions will be. Banks have a significant advantage over traditional software vendors since they access large amounts of transactional data. The challenge is however to make sense of all the data and extract information that can be used to make accurate predictions. As I’ve written before: Context matters when it comes to AI in banking.

Pitfalls with AI

While AI has the potential to revolutionize the finance industry, it's not without its pitfalls, mainly if you use AI to arrive at decisions. In financial institutions, you need to explain why your model arrived at a particular decision, both to regulators and customers. Additionally, if the data an AI is trained on contains a bias, you can be sure the model will learn and perpetuate it.

KPMG has written a report on this topic named «Generative AI models — the risks and potential rewards in business,.» The report discusses generative AI models, their potential opportunities, current considerations, and risks. It emphasizes the need for responsible AI usage and how to build trustworthy and safe AI solutions through frameworks, controls, processes, and tools. The Norwegian Digitalisation Agency has also just released a guide for responsible development and use of artificial intelligence (in the public sector) that could be relevant for people working in the financial sector.

What to do?

Fintech companies seeking to leverage AI should begin by gathering their existing structured and unstructured (non-sensitive) data, as this will enable them to capitalize on future opportunities and train their own models. Without a top-tier learning data set, building a deep learning capability is pointless. And it is probably wise getting your ducks in a row cause AI development isn't going away as Standford 2023 AI Index Report shows.

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Even though it seems like many companies have a head start, even Google doesn't think they or OpenAi are positioned to win the arms race since Open Source has quietly been eating their lunch. Why? Because data quality scales better than data size.

Token picker

Say what you want about Atlassian and its products, but their new token-picker in their design system is a great idea:

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The month of the rebrand

We're in at the end of May, and apparently, this is the month for rebrands. Vipps is surprisingly Vipps MobilePay, Sbanken is suddenly "a concept by DNB," and Komplett Bank is Morrow Bank.

We've been involved in Morrow Banks' rebrand by helping them design and implement webpages with three themes on Next and Sanity. Knowit has done the branding, while a team from Stacc together with an internal team from Morrow has adapted the brand for digital surfaces. Safe to say we're now experts in implementing gradients on the web (a topic I'll probably write more about soon).

Morrow Bank webpage

Apple vs. banks

A month ago, Apple quietly launched a new high-yield savings account with an interest rate of 4,15%. In just four days, they brought in nearly $1 Billion in deposits. Now Apple has both a credit card and a savings account. At what point does it makes sense for Apple to step in and cut out other banks for their most profitable segments?

This wouldn't be unprecedented, as the company is already known for restricting third-party access to certain features. For instance, Apple currently limits the accessibility of its NFC chip to only Apple Pay, causing issues for other mobile payment apps like Vipps MobilePay. Consequently, Vipps are trying to get the EU antitrust regulators to force Apple to allow access to its tap-and-go technology without any restrictions. Still, they have yet to be successful so far. Last week this battle between Vipps and Apple reached its peak when DNB (Vipps' primary owner) announced that they are turning off Apple Pay for existing customers in their Sbanken concept.

The standoff between Vipps MobilePay and Apple highlights the potential for conflicts in the payments industry, with two divided camps in Norway: One which sets customer satisfaction above everything else and supports Apple Pay and one part that focuses on the importance of promoting competition and opening up the NFC-chip on the iPhones for other apps.

On one side, I find it admirable that Vipps MobilePay takes this battle against Goliath. From a Nordic perspective, they are large with 11 million users, but from Apple's view, that user base is only 5% of their iPhones sold only last year. Why should Apple open up its NFC chip, considering a new solution would be less secure and more complex to set up than the current Apple Pay solution, where they control everything?

On the other side, I see Vipps MobilePay being very narrow-minded and only focused on Apple as the bad actor without seeing the options in front of them. Vipps can currently add payments via the NFC chip by supporting Apple Pay themselves. Yes, it is a more expensive solution at the moment, but Apple is now integrating the Norwegian BankAxept system as an alternative to Visa and Mastercard-based transactions, making this a possible scenario. The downside of this solution is that why wouldn't the banks themselves add their card to Apple Pay as well? Well, at the moment, all the owner banks are forced not to have Apple Pay, so I guess they could continue with that and say that Vipps is the Apple Pay solution they support.

Concept with Vipps in Apple Pay

To make the issue even more complex, the main owner of BankAxept is Vipps Holding. The FinShift newsletter sums it up: "As the largest shareholder in Vipps Holding, DNB is essentially supporting BankAxept's push to become a payment option in Apple Pay, while also supporting Vipps by denying customers the ability to use Apple Pay."

As Apple's influence in the financial sector continues to grow, it remains to be seen how how the landscape will evolve and adapt. Regardless of the outcome, it is clear that the financial industry is on the precipice of seismic shifts, and Apple's reach in the banking world is bound to make waves for years to come. So far, Apple's strategy and execution in banking have been flawless, leaving us wondering what their next move is. (Could it be Apple Cash in a larger part of the world?)

Goldman Sachs design system

Goldman Sachs has released an enterprise design system called the Goldman Sachs Design System, which is incredibly comprehensive and includes touch screen considerations, accessibility guidelines, do's and don'ts, dashboards, relationship filtering, and search features. In addition, they have also provided open-source Figma kits.

I especially recommend checking out the page where they clarify concepts and terms that form the underlying functional language of the Design System and use the same terminology across components and create a cohesive system and align developers and designers.

PS: When you give your client access to Figma

For the last two days, I've attended Norway Fintech Festival and seen a lot of talks and panels. My main impression is that there is a specific type of person that ends up on the stage at a Fintech Festival. A person that has done everything correctly on the career ladder for years. They have balanced on a line to get where they are today and aren't going to step off that line for a talk or a panel discussion even though they disagree with their panelists.

This is why it was freeing when Kenneth Jönsson, previous General Manager at Nokia, shared how a combination of arrogance, power, and bad decisions (like creating their own operating system and then betting on the Windows operating system for their phones) made it impossible for Nokia to maintain its position in the mobile market. He also pinpointed another reason they failed: Nokia always followed their working methods and rules from regulators while their American counterparts just did things and then apologized afterward. Their competitors launched as soon as "the boat could float" and released continuous updates.

Blockchain

Another interesting voice was Magnus Jones, Nordic Blockchain & Innovation Lead at EY, discussing why Norwegian authorities (Brønnøysundregistrene and Skatteetaten) chose to create Worlds first Tax and Registry office in Metaverse. He talked about Decentraland (A metaverse) as a horrible shitty place with lots of idiots and stated that this is not innovation but it is play and experimentation. The same sentiment was shared by Taylor Ryan who questioned whether evaluating blockchain and cryptocurrencies solely based on their initial uses is fair, showing examples of the initial were not impressive but eventually became successful (like TV and mobile phones). Innovation is not always about being perfect from the start but rather about taking risks and continuously improving.

Innovation management

A recurring topic was how to innovate in existing companies. Old companies often struggle with structural and legacy inertia, so how can they position themselves to get out of this pattern? Inger Stensaker from NHH had a lot of good examples that you need to set up something structurally separate so innovation can get space next to the established without being constantly challenged. Vipps, Himla, and Bulder, were all examples of this. Torvald Kvamme, ex-CEO of Spv's Bulder Bank, also believed it essential to have a separate unit just enough outside of the main organization to get the necessary freedom to experiment and take risks but still have enough support to avoid being completely isolated.

People first

It is easy for a conference like this to nerd out on regulations and new technologies like Blockchain or AI (and there were enough examples of this), but the main point that went through a lot of the talks was that people should always be at the center of what they do.

Ultimately, the success of any technology depends on its ability to make people's lives easier, more convenient, or more enjoyable. If it fails to do so, it is unlikely to gain any traction in the marketplace. You need to prioritize the people before technology. This means understanding their needs, desires, and pain points and designing your offering with those in mind.

Back to the regular schedule:

SSF to SB1

Sparebanken Sogn og Fjordane has invested 630 million NOK to become the 14th co-owner of Norway's largest bank alliance, SpareBank 1. This investment will give the bank access to a broader range of products and greater economies of scale while maintaining its focus on the needs of customers and communities in the region. While there will be some changes to the bank's technology offerings, the bank will continue to focus on local expertise and decision-making. As a result of its investment in SpareBank 1, Sparebanken Sogn og Fjordane will be divesting its ownership in Frende Forsikring. The trend of banks merging is something we’ve talked a lot about during the last years, and probably something we’ll see more of in the years to come.

Morphing UI

Lastly, I want to share some beautiful interactions from the coming crypto app, Family. They have created an interesting morphing UI that seamlessly transforms from one screen to another, creating a fluid user experience. It's impressive to see how they have used design as a tool to make their users' interactions more intuitive and enjoyable:

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🤔 AI in Banking: Context Matters

I’ve been thinking a lot about AI and the consequence for banking a lot lately. (And I can assure you that this is not yet another article where someone has asked an AI what it can be used to) There has been written a lot about jobs disappearing or being completely altered in the years to come because of AI. Bill Gates as timely stated that “The Age of AI has begun”, but what are the consequences for how users interact with their banks?

The easiest first conclusion people jump to is to get personalized financial advice from an AI. Imagine the AI analyzing all your spending and saving patterns and providing you with personalized financial advice. This is the holy grail for banks, but likely won’t happen in the short term. Why? The underlying data isn’t good enough. Yes, you’ve used 10k at Rema 1 000 the last month, but what did you use it on? Yes, you spent thousands on a Spa last month, but what if it was a gift for someone? Similarly, it needs to factor in details such as electricity pricing, type of house, and whether to accurately provide advice on your electricity bills.

Context matters when it comes to personalized financial advice, and that’s where AI in banking has a long way to go. Simply analyzing spending patterns is insufficient to provide valuable feedback, especially if credit cards from elsewhere are involved. But in other aspects, I belive AI will make banking more efficient, especially when it comes to answering simple customer inquiries or automating fraud detection.

Another conclusion that is easy to jump to is that AI can have a huge impact on credit risk assessments. After all, what machine learning is good at is analyzing vast amounts of data and categorizing similar patterns. But I can assure you that you wouldn’t have a banking license for long if your documentation was that you have a black box that sorts out the best customers. There is, however, merit in using AI to optimize business rules and threshold limits based on data. Making sure you are structuring your business rules with decision matrixes or DMN tables is the first step in making sure you’re positioned to optimize your credit assessments with AI.

🤖 Stripe, Klarna, and Shop join ChatGPT's plugin store

You’ve been sleeping under a rock if you haven’t heard about GhatGPT by now, but last week they made an entry into Fintech by announcing plugins. Three of their first plugins: Klarna, Stripe, and Shop, Shopify’s consumer app.

Consumers can add the plugins from ChatGPT's plugin store (ChatGPT Pro). All they have to do to activate Klarnas app, as an example, is to ask ChatGPT for shopping ideas to be presented with tailored products. ChatGPT will decide when to use the plugin based on the conversation. Shoppers can give further instructions or ask for more product recommendations. By clicking on the product link, they will be taken directly to Klarna's search and compare tool to compare prices across different brands.

Klarna announced their plugin with this statement from Sebastian Siemiatkowski, Co-founder and CEO of Klarna: 

Well, I might disagree with Sebastian about whether a ChatGTP plugin (you have to be a paying subscriber for) passes the “mom test” and whether my mother gains from being able to purchase more items easily. But it is an interesting first iteration!

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📈 5 trends shaping the future of finance

Itera has launched a report about 5 trends shaping the future of finance.

These are trends that will present both challenges and opportunities, shaping innovation and strategies in the years to come. The report's goal is not to solve all the challenges faced by the industry but rather to create a basis for innovation, development, and discussion of the future. Not surprisingly, one of the key trends is responsible AI. The rest of the key trends are:

1. Fluid expectations: Great user experiences from other sectors create high expectations for financial services.

2. Integrated finance: Financial actors can achieve profitability by taking a back seat.

3. Sustainability and integrity: The sustainability trend continues, and the financial industry is responsible for leading the way.

4. Future anxiety: High prices, war, and pandemic aftermath affect consumers.

5. Responsible AI: The possibilities seem endless, but missteps can be costly.

🥴 Why is it so hard to do great work at scale?

George Kedenburg, product design lead at Humane and previously at Instagram and Facebook, has written about why it is hard to create great work at scale. He has summed his theory into this formula:

He also lists a lot of suggestions for how you can balance this out, f.ex. by introducing a craft or systems-focused counterbalance to metric goals so that success doesn't come at the cost of user experience. If you’re working on a product, I highly recommend reading the article!

Spreadsheets and gut feeling

Last week I visited Ålesund and the lovely people at Vest Studio to talk about what happens in the Fintech space and about product development in finance. One of my talking points was on the difficult balance between gut feeling and spreadsheets:

In Fintech, you are never far away from a spreadsheet. Being able to track outcomes and consequences conveniently can be beneficial, but taking action can be stifled if the spreadsheet is not reliable or favorable. You’ll never create a great product if you don’t follow your gut feeling occasionally. We need to find a balance between rational thinking and creative thinking. Creative thinking can provide a different perspective than the spreadsheet and might be able to see opportunities or solutions that have otherwise been overlooked.

Jacob Mørch from the innovation studio Braver wrote an excellent post on precisely this topic:

Spreadsheets will always have their place, but the opportunity cost of not giving space to creative ideas can be massive.

SVB collapsing

Silicon Valley Bank (SVB), known as the go-to bank for startups in the US, collapsed last weekend after buying $80 billion in Mortgage Backed Securities to put their money to work. When interest rates were low, the 1.5% yield SVB had locked up seemed attractive. But, as rates rose, the $80 billion investment became less desirable, and people started to notice.

The snowball started rolling even faster when Byrne Hobart called out Silicon Valley Banks' risk in his newsletter read by most VCs. Then everyone started to pay close attention to SVB, and after a massive earning miss, Peter Thiel, USV, and Coatue sent out mass emails to portfolio companies to pull out funds, and the ball kept rolling.

The long-term effects of this are yet to be determined. However, European banks are subject to more stringent regulations than those in the United States. A recent example: Lunar could not purchase Instabank because they would be left with insufficient capital after the acquisition and were thus blocked by the Norwegian Financial Authority.

Wise redesign

Wise (former Transferwise) just got a new look:

Twitter tweet

I encourage everyone to check out https://wise.design, where they have documented their design system. Imagine if .design became a standard for showing design systems for brands. 🤔

Send your boss to hell

Basecamp offers a once-in-a-lifetime opportunity: Send your boss to Hell - Hell on the Cayman Islands, that is (not Hell in Trønderlag)! They will give one winner a five-night getaway trip for two to the Cayman Islands, allowing you to tell your boss to "Go to Hell" - literally.

Ever wanted to tell your boss to “Go to Hell”? Here’s your chance.

sendyourbosstohell.com

Designer of the week

I was recently designer of the week at UX-Norway. If you wonder what a typical week looks like for me and how my journey has been to where I am now, give it a read:

Designer of the week: Marius Hauken

He is a coding designer who knows most things about fintech and has several newsletters on his conscience 💰 Get to know Marius Hauken in Stacc X!

uxnorge.no/marius-hauken

Alternative costs of business features

If a company becomes large enough, it can earn money no matter what they do. It doesn’t even need to be a great idea. Yes, I’m talking about Vipps digital gift paper again. Last year Vipps sold gift paper for over 10 million NOK. In itself, the amount is huge, but considering the rest of their revenue, the amount is a rounding error.

Product-wise, adding small features with side income for products is a slippery slope. For example, I’ve worked with banks that didn’t add push notifications to their mobile app because they earned a couple of millions in fees from SMS notifications every year and couldn’t get paid for push notifications. A feature that would benefit the users but would guarantee a small loss in revenue.

Another example regarding product cost is Bulder from Sparebanken Vest mortgage loan, which automatically adjusts the interest rate as the loan-to-value ratio goes down. This is not new, as many banks give out different interest rates based on your loan-to-value ratio. But no one would automatically adjust the interest rate down until Bulder came. The banks hoped people were lazy and that they could benefit from that. Bulder could add this feature because it was a new product entering the market. But implementing this in an existing bank is next to impossible when you compare the numbers. Since the launch of Bulder three years ago, no one else has implemented it.

Adding new features always has a cost, but remember that it is even harder to remove features that earn you money even though they are not features benefiting most of your users.

SME investments

Speaking of adding and removing features. DNB and Aprila Bank ended their collaboration project before Christmas, which involved redirecting SME customers needing a credit line to Aprila's automated loan application. The stock exchange announcement revealed that interest in the offer was not great, with only 139 customers accepting the offer out of approximately 100 000 SME customers exposed to the loan offer from Aprila during the pilot project. The total amount lent out was 15 million NOK, representing about two percent of both customer numbers and loan balance for Aprila.

When asked about the collaboration by Shifter, DNB says: "The reason why we decided to end our collaboration with Aprila Bank is that data-driven credit has been promoted as an important focus area going forward at DNB. In that context, it is important for us that we develop our own solutions, rather than relying on third parties."

Testing out a feature with a third-party instead of developing their own solution internally to test the market was a smart move by DNB. But in my book, creating their own solution and focusing on data-driven credit for SMEs seems like a strange choice when the Aprila-pilot clearly showed that the interest in the offer wasn’t that great for DNBs customers. The real reason might, however, be that Visma (a DNB SME solution competitor) has partnered with Aprila Bank. Or maybe DNB saw more potential in the numbers from the pilot than they let on?

At the same time, Sparebanken Møre is testing the waters by partnering with Conta and challenging Folio. They will offer company establishment, banking, and accounting in one and the same package and aims to halve the time it takes to start a business for customers. Company establishment has always been a slow process. By reaching potential customers early, Sparebanken Møre and Conta could get a lock-in-advantage in the following years considering moving business banks and accounting systems is a hassle. It is, however, a very long bet since it usually takes quite some time before new companies become very profitable for banks.

The hidden complexities of bank cards

Built for Mars has again come out with required reading for people working within fintech. This time they are writing about the hidden complexity of bank cards and one of my favorite topics when creating user flows: that number of clicks isn’t an important metric as long as you quickly get to where you want.

The number of clicks to order a new card. Source: Built for Mars

Meetings are work

How often have you heard: “We’re canceling this meeting so we can get some work done”? Elizabeth Ayer has written a thought-provoking article asking the question: “What if the *only* work that matters in a knowledge economy happens when we are together?”

Meetings *are* the work

Wherein I take aim at the common tech trope that people need to limit meetings to get work done.

medium.com/@ElizAyer/meetings-are-the-work-9e429dde6aa3

Also, this week:

• 😓 Troubles for Danish Bank Lunar

• 👩‍⚖️ AI Lawyers are coming

Solving the Business Process Puzzle in Fintech

As I work with more and more organizations within Fintech, I am constantly amazed at how little control and understanding organizations actually have with critical business processes. They might have a drawing of their intended business process when they started the project. Still, when you start to dig in, it becomes clear that they don’t know the order of their integrations or where the different business rules trigger (or sometimes even what the business rules are).

Business logic loves to hide in the quiet spaces in the code, and having a drawing of your process doesn't mean you actually know what's happening. You must go deep into the code to understand how each piece impacts the overall process. And most business developers won’t (or can’t) go there.

That is why many see the need for solutions like Camunda and BPMN (Business Process Model Notation) files, where the business process is connected to actual code (heck, we even have a product using their engine for orchestration). You might think that solves the problem, but that is only half of the equation:

• It doesn’t answer which business rules triggered for one specific application.

• It doesn’t answer which screens the users see during their application process.

• It doesn’t make the case worker aware of the intricacies of an application process.

If you want to understand a business process, it’s not enough to see the integrations, business rules, and when they happen. You also have to take into account the user experience for the customers as well as the user experience for the case workers. We’ve been trying to bridge this gap in our loan application and onboarding products for the last year. Two things have been instrumental in this process:

1. Merging UX with BPMN

Merging the actual user experience with the BPMN so that business developers, developers, and designers always are on the same page.

Ultimately, understanding a business process when dealing with Fintech requires knowledge of both the technical components and the user experience. The intersection of those two components is where we can truly unlock the power of Fintech.

2. Expose business rules to case workers

Let the case workers see all the business rules and why an application has gone to manual handling. By doing that, the process is better understood, and the case workers can handle applications much faster with insights into the rules and data that triggered manual handling.

By going beyond BPMN and having both the UX and the business logic in one place, we can provide our customers with a holistic view of their process and make changes to it faster than before. That way, you can form a complete picture, making the puzzle easier to solve and the business process smoother to handle. If this is something that makes your brain tingle, just hit reply, and we can talk further!

😓 Troubles for Danish Bank Lunar

Danish challenger bank Lunar has had a difficult year, with the company sending out layoff warnings to around 50 employees at the end of last year. The layoffs significantly impact Lunar's operations in Norway, with both the country manager and communications chief leaving the company. This follows a series of setbacks for Lunar throughout the year, including withdrawing a billion-dollar bid for Instabank, laying off 40 employees, and facing criticism and fines from Danish financial regulators. The company's founder and CEO have said that the layoffs were necessary to make the company more profitable.

This is bad news for the Norwegian Fintech ecosystem. Lunar had an interesting voice and tried to take an important challenger position in the market. However, in my opinion, you aren't a real challenger without providing bread-and-butter services like mortgage and eFaktura.

👩‍⚖️ AI Lawyers are coming

I came across two interesting news regarding AI lawyers this week:

• DoNotPay will pay any lawyer or person with an upcoming case in front of the United States Supreme Court $1 000 000 to wear AirPods and let their robot lawyer argue the case by repeating exactly what it says. The main bump in the road so far is that the Supreme Court bans any electronic devices from being present in the courtroom while Court is in session.

• Another interesting product is Tome: a tool that simplifies the process of reviewing investment or venture contracts by summarizing the terms, highlighting common clauses, and suggesting possible alternatives. Currently, it focuses on SAFEs (Simple Agreement for Future Equity) and management letters, but it plans to expand to other types of contracts in the future.

When the hourly fees are very high, and the rules you follow are written down and based on other documented cases, you are bound for AI lawyers to contribute to the field in one way or another.

Also, this week:

• 🏦 McKinsey’s Global Banking Annual Review 2022

• 🖱️ Most clicked links from the year

• 💬 Talking Points for Life

🤔 What is your AI strategy?

Looking back at 2022, the most prominent breakthrough in my corner of the internet has been the AI generation of images and text. There is a reason why ChatGTP only used five days to reach 1 million users. It is crazy good at helping you write. But anyone that has tried to use it extensively sees the shortcomings. The best writing on this topic I’ve seen so far is this comment from Benedict Evans:

Trying to answer the last question through Fintech-eyes, Anti Money Laundering (AML) is the most natural area in which AIs could help simplify the job. It is a field with lots of data and patterns where machines can find patterns humans would never see.

It wouldn’t surprise me if banks halved their customer service centers starting next year based on how good tools like ChatGTP are. However, this implies that the banks have structured all their previous customer interactions and data about whether the customer got what they wanted. This is an excellent example of where having a strategy for AI a few years ago would have been valuable.

National Strategy for AI

Did you know Norway has a National Strategy for Artificial Intelligence from 2020? For fun I used Open AI to summarize the 66-page document, so you don’t have to read it:

After skimming through the report, the above summary seems to be as precise as the 66 pages. In my opinion, what is missing from the strategy is what they won’t do. Now everything seems to be important, and after all, strategy is the art of sacrifice.

Deloitte has published a short primer on creating an AI Strategy. The key takeaway is quite obvious: having a company-wide strategy for implementing AI in the organization makes the organization more successful in using AI. What is worth noting, however, is that the report emphasizes the importance of aligning AI initiatives with the overall business strategy and advises against solely focusing on efficiency goals, as this may lead to missed opportunities for creating value through AI.

🏦 McKinsey’s Global Banking Annual Review 2022

McKinsey has released their Global Banking Annual Review for 2022. Quickly summarized it says that the global banking industry has faced a tumultuous year in 2022, with a combination of macroeconomic volatility, geopolitical disruption, and the lingering effects of the COVID-19 pandemic. Despite this, bank profitability reached a 14-year high.

In order to navigate the current challenges, banks will need to focus on improving efficiency, leveraging technology, and building resilience, as well as increasing engagement with clients on climate-related financing.

🖱️ Most clicked links from the year

Instead of summarizing all that happened last year, I went through all the most popular links from the newsletter over the last year and ranked them:

1. Modalz modalz modalz

2. Death by PowePoint

3. FINTECH 2022 – status og trender for den norske fintech-sektoren

4. The greatest from Apple

5. Violating GDPR

Based on this, there is a high probability that you as a reader, are interested in UX principles and Fintech, hates PowerPoint, and secretly find regulations fascinating. 😜

💬Talking points for life

This is the year's last issue, and we’ll come back stronger next year! To round out this year I found it fitting to share this site before Christmas vacation when everyone is spending more time with their family:

Communication is tricky. We all bring our own biases, emotions, and histories to the table. This site will help you navigate those tricky subjects, allowing you to build healthier and happier relationships. Talking Points for Life is a library of ready-to-use messages for challenging social situations.

Some examples are:

• How to set boundaries

• How to ask someone to stop talking about politics or religion around you 

• How to offer comfort / give sympathy

Welcome to Talking Points for Life

Too many people are left wandering through Reddit threads and Quora posts looking for advice on what to say. Communication is tricky. We all bring our own biases, emotions and histories to the table. This site will help you navigate those tricky subjects, allowing you to build healthier and happier relationships.

https://www.talkingpointsforlife.com/