NEOBANKS: PFM
The bank of fun Lunar is the Danish challenger that’s ready to ‘change the way people do banking’ by using a Cloud-based architecture that’s ready to embrace open finance. With more than 200,000 users already, many acquired during the pandemic, COO Morten Sønderskov says the bank’s off to a good start
“Spending is fun, but banking is boring. Unfortunately, you can’t do one without the other,” says Morten Sønderskov, chief operating officer with Danish challenger Lunar. The thrill of signing up to a subscription service to see the latest blockbuster release that now won’t be premiered in cinemas, or enjoy a monthly download of 100 games on Xbox Series X to relieve lockdown boredom; the guilty pleasure in being able to buy now but take your time to pay for it; and the buzz from getting together with friends and family over a financial social platform that allows them to share in your purchasing decisions… all these trends have taken off in the past 12 months as the pandemic upended our daily lives and exaggerated an existing but gradual shift in spending habits. Trouble is, our cashflow is now so complicated, so impulsive, that it’s increasingly difficult to get a handle on it. And that’s what Lunar, which started life as a personal financial management (PFM) app in 2015, aims to correct. By 2019 it had obtained a European banking licence from the Danish regulator and began building a bank fit for a generation of digitally-savvy Scandinavians. Its mission was to create a bank that suited the busy, online universe they live in; designed to help users reach ‘financial zen’ by allowing them to save, invest and share their finances through Lunar’s modern financial management tools. But then the pandemic catalysed its www.fintechf.com
development. Within the space of a few months, Lunar had tapped into the digital payments vein that was pulsing with pandemic-fuelled pressure and brought out three new features, partnering where necessary to speed up their delivery. First came an in-app subscription management service with white-label software supplier Subaio. Then, it gave its Premium and Pro customers the option to have joint accounts with up to 10 people who could post messages to each other via the app. Ken Villum Klausen, founder and CEO of Lunar, said at the time that joint accounts were launched partly in response to a surge in online book clubs, cycling clubs and other groups during the pandemic, and the bank wanted ‘to support the need to share experiences with easy money management’. Most recently, just in time for Christmas, the bank added a Klarna-like buy now, pay later option, which pops up whenever a user makes a purchase from the account. Lunar’s agility is entirely down to its Cloud-based architecture and collaborative mindset, says Sønderskov. “We had the opportunity to, more or less, start from a blank piece of paper; to build our own back end in the Cloud from day one, which means we are in full control of the data and able to manage our service in a very agile way – how we work, how often we are able to bring new services to market, and how often we update existing services. “Being in control of its own back end
has been the core foundation for a company like Lunar to provide front-end solutions. Going forward, that whole back end is going to be even more critical, because we are integrating with so many different players to be a part of the fundamental financial infrastructure.” By seeking out partners with the same Cloud-native approach, Lunar can double down on innovation, faster than most others could deliver it. “We can do the integration in three weeks,” says Sønderskov. “I think our main competitive advantage, compared to the incumbents, lies in being able to bring products to market at a faster pace.”
READY FOR OPEN FINANCE The bank now has 200,000 private users and 5,000 business users across Denmark, Sweden and Norway, most of those acquired last year. With the Lunar app, they can easily and securely manage their finances directly from their smartphone, get an overview of spending, set savings goals and budgets, receive notifications when they are about to hit limits, and make free payments and transfers. Premium and Pro account holders can invest money via the app over a simplified trading platform developed in partnership with Saxo bank – trading costs are low and transparent, with no hidden fees and no demands for minimum expenditure on stocks. Other paid-for account benefits include exclusive discounts, travel and luggage insurance. Issue 19 | TheFintechMagazine
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