IkigaiLondon McTech, founded by former McKinsey partners, thinks there is a place in the crowded challenger market for new premium offers that combine digital banking with wealth management.
Targeting future and current high-net-worth individuals, Aikigai is iOS for now and includes a current account and savings account, with adjacent wealth management features, all combined into a single app and card. The thesis, the founding team says, is that there is currently little on the market that offers a modern digital-first banking experience and the kind of premium banking services typically offered by legacy banks to its more affluent customers .
“Our typical customers are young – usually in their twenties or thirties,” explains Edgar de Sionotics, co-founder of Ikigai. “They are entering their major spending and earning years, and are looking to secure their financial future. Although they are not yet high-net-worth, they have aspirations and goals – and they want to do more with their money.
Instead of a freemium model, Ikigai charges a flat membership fee from Get-Go, and new users gain access to a relationship manager, which sets it apart from most digital-banking. Features include a “daily” spending account and a savings section of the app, called “Nest”. The latter differs from the expense account, which includes its own account number, but can be easily topped from the everyday account.
So far, I too, you can conclude. However, while some further discrimination certainly comes into play, Ikigai also offers a “fully managed, globally diversified investment portfolio” under the funds section of the app. The portfolio is created and managed by Ikigai in collaboration with asset manager BlackRock, and takes into account both risk appetite and the nature of users.
“We say it’s a lot, but Ikigai was born a lot out of personal frustration,” de Picicot says. “Everything in the market seemed slow, impersonal, full of attempts to sell lending and loan products. It felt like it was either technology or humanity, never both. That was the first thing we knew we wanted to solve.
Maurizio Kaiser, the other co-founder of Ikigai, says, “Banking can also be very time-consuming. “People have a lot to do when they have to do it themselves. It can basically become a second job if you are constantly working on different shares and shares if the value is higher than this or that. Nobody really has the time – I certainly did not. “
Once the pair are dug deep, as management consultants are accustomed to do, they say they discovered “interesting behavioral tendencies”, especially when it comes to young and affluent people.
“This group is entering its major earning and spending years, and they expect a lot more from their banks than previous generations,” de Picicot says. “Not only do they expect faster, fairer and better experiences, they have specific expectations and demands that current financial providers simply do not meet. This includes contacting personal finance as an act of self-care, lifestyle. Banking includes things like lifestyle banking and aligning your wealth with your goals and sense of purpose.
Notably, unlike the first wave of challenger banks that ruled out claims to build their core banking technology, Ikigai is primarily partnering with technology providers, including Railbank and Wealth Kernel.
“Pick-Outlook claims that going with banking-as-a-service providers really makes it easier to execute our vision.” “It allows us to focus on what we are good at and what really matters to our customers: the user experience”.
On banking rivals, the founders of Ikigai argue that both the current unaffiliated and the challengers have “significant” failures.
Incumbents are heavily dependent on branches or telephone services, and are based on cross-selling and up-selling services, particularly lending products, to make money on deficit current accounts.
On the other hand, the Challengers are “faster and more accessible”. However, to keep their cost-base low, they are automatically increasing their chat support and, in some cases, hiding live chat features.
“Offering high-quality service is clearly aimed at offering free banking,” concludes Kaiser.