Branchless retail banking investment leverages new technologies and approaches to help consumers better navigate a fast-paced, digital economy.
REDWOOD CITY, Calif., (April 5, 2016) – Omidyar Network today announced an equity investment in Tandem, one of the first full-service digital banks to be licensed in the United Kingdom. The company leverages new technologies such as big data analytics, along with behavioral and human-centered design concepts, to offer consumers in the UK a lower cost, better banking experience. The Series B-1 round investment is part of Omidyar Network’s Financial Inclusion initiative and kicks off a new investment strategy, which focuses on supporting technology-enabled, low cost, individualized retail banking services that create long-term, trust-based customer relationships.
“We are on the verge of a paradigm shift, where new technologies powered by a deeper understanding of the consumer are becoming central to how people manage money,” said Tilman Ehrbeck, partner at Omidyar Network. “As the world moves to a digital economy, new banking models like Tandem can make a huge dent both toward financial inclusion in emerging markets and household financial health in developed countries.”
The advent of branchless, mobile-first, digital banking models leverages the convergence of trends spurred by the ubiquity of mobile phones worldwide, including the exponential adoption of smartphones in emerging markets, the explosion of mobile data, and the latest advances in computing technology. Over the last few years, Omidyar Network has helped pilot several financial technologies built on these trends, such as big data analytics for credit scoring of “thin file” or “no file” consumers and machine learning driven customer engagement—solutions that are now merging into a superior value proposition for consumers.
“Omidyar Network and Tandem have a shared vision: helping people improve their lives. This investment enlivens and further validates the global relevance of Tandem’s mission to build a good bank which will help customers to lead happier lives by developing a better relationship with money,” said Ricky Knox, cofounder and deputy CEO of Tandem.
In the short term, Omidyar Network expects this new breed of banking will help address rising challenges around household financial health in developed markets. In the long term, as emerging markets evolve their focus from creating access and boosting usage of financial services, these models can become more relevant in promoting broader financial inclusion.
Through this investment, Omidyar Network also aims to gather learnings that can be shared with and replicated by other financial services organizations around the world.
Tandem is scheduled to start operations later this year in the UK.