Moven will now focus on its B2B or enterprise side of the business.

The coronavirus notches up digital challenger bank Movenbank as a casualty. Founder Brett King has pulled the plug on Moven nearly nine years after its launch in October 2011 as the world’s first cardless bank. In an interview with American Banker, King clarified the many reasons for what must have been a difficult decision. (American Banker)

The virus put paid to the funding

King had set up a deal for spinning off the consumer bank side of Moven’s business. He even had funding lined up to consummate the transaction. But the virus dashed hopes of the money coming through.

King said of VC responses: “Most of the conversations we had were, ‘We’re just going to wait and see, it’s pencils down right now. We’re not doing any new deals.’ ”

The funding drought even affected a plan for Movenbank to launch credit offerings in a joint venture with another bank.

King’s classic dilemma: “Do we try and survive with the challenger bank until we can see if funding reappears, or do we cut our losses? If we continued with the challenger bank in the current form, we probably would have had to absorb something like a $2 million loss this year.”

The yin and yang of it

King was asked whether other digital banks could face the same troubles down the line regarding their cash runway. King said one positive side of the virus was that more consumers would discover the joys of digital, branchless, app-based banking. He was likely hinting at social distancing and increasingly pervasive lockdowns.

However, on the flip side, neobanks such as Revolut, Monzo, and N26 would now have to nurse their cash for longer. It would, therefore, no longer be growth at all costs – instead, estimates would turn more conservative.

Financial wellness

Back in October, Moven patented (“Methods and Apparatus for Promoting Financial Behavioral Change”), an app for financial wellness.

Moven is probably applying those very same money lessons to its own business: It’s cutting its losses and moving on.

“I had to make the decision that was least risky for the team overall and for the clients we have on the enterprise side,” King said to American Banker.

Moven Enterprise

He said Moven Enterprise was healthy and robust, and that it had recently closed a major deal in Saudi Arabia. Under that agreement, Moven will provide patented financial wellness platform solutions to STC Pay – the Kingdom’s first fintech neo-banking service under an Electronic Money Institution license.

Said Denny Brandt, Head of Moven’s US Strategy:

“Our patent gives us new competitive strength in a rapidly evolving B2B environment. The Moven brand now has the opportunity to represent patented financial well-being, available to enterprises of all types.”

“We continue to be involved in ventures in multiple geographies where we power direct-to-consumer banking services,” he added.

Moven will close down accounts at the consumer bank by April 30, 2020.

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