When Peter Lord left AMP he never thought he’d end up working with another large financial services firm.
“I worked at AMP for six years and then my next companies were 18 months, then 12 months and six months, so that was kind of the hint that I wasn't set up for the corporate life,” he says.
“I was always the square peg in the round hole – I was the more creative one and didn't like the slow pace that things happened.”
It is a journey which has quickly come full circle with AMP taking an equity stake in late-2014 in his online budgeting service, MoneyBrilliant
, after four years largely bootstrapping the start-up business.
Lord says he was inspired to start the business after the divorce of his parents left his mother in a difficult financial position. He suggested she use some of the equity in the family home – the major asset she was left with – to invest in a unit trust.
“But my mum wasn't in control of the everyday finances and the tendency is, if you have low financial literacy, to do nothing. That's what mum did and that probably cost her at least $300,000 by retirement.
“So when I started MoneyBrilliant my dad was worrying about where he was going on his next holiday and mum was worrying about $8 bank fees – they both worked just as hard and I didn't think it was fair.”
MoneyBrilliant is now one of several online tools in the marketplace (rivals include Pocketbook
) aiming to unify the wide array of accounts held by people and turn that information into easy-to-digest budgeting tools. MoneyBrilliant relies on US firm Yodlee to aggregate its customers’ accounts and then provides tailored automatic spending categories for the Australian market.
“Customers aren't looking for data, they're looking for insights”
“Customers aren't looking for data, they're looking for insights,” Lord says, citing AMP research which shows that one-third of Australians lose sleep over money worries and approximately two million Australians are highly financially stressed.
The start-up’s growing success attracted the interest of AMP which, last September, invested another $1.5 million in the business. The investment by a major financial institution represents a growing trend in Australia where the venture capital industry has been barren territory for many years until recently.
AMP plans to offer MoneyBrilliant to clients
“We don’t have the pressure that we need to make money today or be IPO’d and generate growth on growth – we can learn. Our most recent capital raise – effectively it was about exploring commercial opportunities, what is the best model? What do we need to do so we can be economically and financially sustainable?”
It is a key question many start-ups struggle with. While the connected and low-cost power of the internet has empowered consumers, it has also fostered an expectation of free services.
“Do you go for a land grab – get massive scale first and then try and charge or do it the other way around – a product delivering revenue from day one?”
Big banks and organisations are all too aware of the fintech threat and are increasingly launching innovation labs, investing directly in start-ups, or supporting the sector via collaborative hubs such as Stone & Chalk, which has close ties to AMP and is located in its Bridge Street building.
Lord says MoneyBrilliant’s partnership with AMP is working but has some advice for large institutions also considering investing in fintech start-ups.
“You have to be prepared to lose that money,” he says. “We're not based in AMP – we have a great office in Darlinghurst that has that start-up feel. You've got to trust the people – if you find the right founders invest in them, believe in them and then back them.”
“Big corporates don't often have great track records of delivering technology because the money you have bureaucracy involved and brand involved... where we can just go for it, get it out there, see what works, and move on.”
MoneyBrilliant has conducted some recent trials with AMP’s extensive corporate superannuation base and plans to roll out an offer to AMP’s financial planners which will allow them to offer MoneyBrilliant to their clients. The company also worked with AMP’s innovation arm, Amplify, to produce a prototype real-time transaction analysis for customers using AMP Paywave cards.
Further experimentation is planned over the next year.
“When I started this business five years ago I didn't expect an opportunity of this size, but at the same time I completely underestimated the challenges and hurdles you're going to face.”
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