otyl! banking experience from their early youth,
otyl! business profile
Otly is an Amsterdam based start-up that seeks to introduce children to their first digitalized banking experience. Co-founded by its CEO Lior Bornshtain and CTO Vedran Vego in 2015, Otly started by offering their service via website. Two years later, it has two apps available that provide an easy and appealing solution to the financial lives of parents and their kids.
Otly is of offering kids the opportunity to have banking experience from their early youth, comes from the fact that cash is no longer as present in our daily lives as it once used to be. A cashless society has demanded for a banking solution that allowed parents to keep track of their kids spending, and to give kids the opportunity of experience how their future financial lives are going to be. So how does it work? the parents need a bank account (in affiliated bank) from which money can be deducted from and depending on the parent’s preferences, the sum will be directly forwarded into the kid’s bank account or can be used to buy a voucher or gift card which the kid can redeem or show in stores or online. Is important to mention that Otly is not the only company out there providing financial services for the children, there are other parties offering similar solutions. However, they have their main ties with credit card companies, which means that they are challenging the banks and seeking to take costumers from them. In order to promote financial education among families, Otly has a feature that’s yet to be launched called Otly!Feed.
Otly Works directly with banks to provide children friendly banking solutions on top of existing products designed by banks. These products can vary from digital saving jars for savings, to products like Otly!Me, which basically allows family members to contribute to their account, or Otly!Pay, which is a perfect way to introduce young kids to controlled spending. Products like this, allow customers to get more value out of their banks and banks to keep up with the evolving needs of their customers.
Currently, Otly Has 8,000 parents and 12,500 kids using their services. Moreover, 250,000+ transactions have been made through the apps, meaning that the kids are actually using it and getting something out the experience. For 2017, the company plans to announce integration with two more banks, and to announce the launching of Otly!Pay. Further in the future, Otly also aims to expand beyond the Netherlands and step into some other European countries. Otly Has won Fintech Awards of 2017 for the category of innovative banking, and was also one of the four companies in Europe that won the UberPitch Challenge of 2016. Some great achievements in such a small amount of time, it looks like nothing but good things are heading their way.
Identifies the issues and
the subsidiary aspects involved:
Their revenue streams are from bank affiliations and commissions on gift cards and vouchers so more customers and banks are their primary goal.
They’re currently affiliated with one bank Bunq and are seeking to connect to more Dutch banks in the future. That is affecting their present business because Bunq is still a relatively new mobile-only bank system. Bunq connects them to a smaller number of customers than some of the main Dutch banks will and in that way Otly has been able to secure only around 15,000 customers. Once they connect to more banks, starting from Netherlands, they will gain access to more potential customers. Which Otly definitely sees as a challenge and profit to expand outside of the Netherlands. This interest because only in Europe, home of 250,000,000 kids. Making it a great increase for customers.
The company will try to adapt itself worldwide but still expresses the need for people who are familiar with the cultural differences and beliefs. They also need more translators in order to translate the apps in the respective languages and contact the banks. The lack of personnel impacts their worldwide expansion.
The competition of Otly is backed by VISA and MasterCard (they’re offering their debit cards to young customers) which will and affects the customer retention at a certain point. Despite that, Otly has recorded 17% app standard retention and a 35% in Otly!Jr. (kids app) which shows that Otly is being noticed by the customers and has the potential for a successful future. The marketing channels are simply not enough at this point. This affects the awareness of the customers and their confidence in using the product.
1. Need to connect Otly!apps with more banks (need for bigger capital).
Otly’s ultimate objective is to connect with as much parents with kids as they possibly can. But how can they achieve that? They can by connecting with more banks and getting them involved on what they offer. If there is no immediate action. It could lead the company to slack off by the cause of a decrease in necessary financial income. Without the partnership with banks Otly can start lacking in areas as gaining customers by the decrease of promoting their company and services. But another issue is that without connecting/partnering with more banks, Otly cannot expand its company staff. They need a bigger income to hire more staff and invest in marketing in order to gain more influence with banks and customers. By finding the right investors who can cover the mentioned actions, Otly should be able to see an increase with customers and their confidence in the business and staff.
2. Growing customers trust and awareness.
Trust is of the ultimate importance when it comes to sharing your personal digital banking information online. In general people are very careful when it comes down to their money. For any kind of trust to be reached by customers, Otly should be exposed to transparent business ideas, also taking high security measures and reliable customers services provided by marketing channels and apps. Like this, more banks will increase the consumers trust.
3. The need to expand internationally.
Otly! should try to affiliate itself with foreign banks, which on the other hand will provide a serious possible for increasing the customer side. It will help the company’s image to expand abroad and be known. In order to do that, proficient personnel are a must to make contacts and find solutions to the cultural differences of the different countries
Discuss the relationships between
the issues and the business functions:
The problems mentioned above are all connected to one another. For Otly to reach out more consumers, it needs to find balance while at the same time, promote their business and provide trust and security. A customer’s trust is all but easy to get. Nowadays the internet is exposed to so many viruses and distrust that we all tend to freak out a little when giving out our personal financial information. Number 2 & 3 problem is all about approaching and informing the customers and trying to win their confidence, mainly focusing on the parents and therefore indirectly attracting kids. The 1st problem is a slightly related to 2nd & 3rd, all because in order to reach that, the company needs a bigger staff and income (capital) in order to invest in diverse actions to stimulate the advancement. Otly needs to make sure that the customers will be showed to a transparent application without having any risk of getting spammed by any malicious contents or use of information and still being able to have quick access to their money.
Constructs a problem statement:
Problem 1: without the necessary investors Otly will fail to fund important activates in order to expand, promote and enhance the apps and company, and also disallowing any kind of increase with staff therefore lack growth within the market and potential consumers.
Problem 2: It’s hard to win the customers’ trust and increase the awareness in order to attract more customers. The need of more promotion channels.
Problem 3: For a company to adapt to different worldwide scape situations, it makes it very hard. For example, what fees are considered allowance in other countries, what is the cultural background? To they use checks? Etc.
IDENTIFICATION OF POSSIBLE APPROACHES
Identify approaches for attacking the problem:
Problem 1 | Approach 1: they are currently registered in a small amount of start-up online platforms. They should register the company in a much platforms they can just to reach out to more people who are trying to invest their money. ”Otly!” is currently registered in Index.co which is one of 20 or more trending launch platforms. This can give access to thousands of consumers in total to ”Otly!” apps and will help to expand the awareness abroad and attract investors interested in it, some of them even related to banks.
Problem 1 | Approach 2: it can implement advertisements in the parent app to gain revenue from. Which will directly add one more revenue stream to the company because the advertisers will have to pay a fee for the service.
Problem 2 | Approach 1: by adding more bank affiliations it will give the sense of safety to the customers. Once a costumer sees a well-known bank in partnership with ”Otly!” they should be more likely to use the app and share their experience with other parents. The more banks and sponsors are connected, the more consumers are connected, therefore more trust and more affiliation fees for Otly!
Problem 2 | Approach 2: The difficulties of the business related to changes, rules and income should be directly shared to the customer so he can provide valued criticism, which can be used alongside the company future plans. This can be done by live chats, forums, e-mails and social media contacts. Customers who have the word in the development of a product are most likely to fully trust a developer and be pleased by the content. By listening to the feedbacks, the company will be also able to pin-point the exact problems to solve.
Problem 3 | Approach 1: Otly has less than 10 staff so there’s need of people who are responsible to speak and gather bank partnerships in order to expand internationally. They should consider making it a request to hire people with different backgrounds and languages in order to increase the company.
Problem 3 | Approach 2: To bring this company into a whole other level, I believe that they need to increase their marketing strategy. By increasing in staff, they can start presenting their ideas to foreign businesses that are related to their own, gatherings or directly to banks. That will increase consumers curiosity and it is more likely to attract the parents to download the apps and use them. Also by increasing their marketing channels, like Instagram or snapchat, they can reach out other companies to promote their app.
EVALUATION OF APPROACH STRATEGIES
Pros: It potentially can expose the company to more sponsors providing the company with more choices in terms of expansion, staff, innovation and advertising.
Cons: These platforms require the payment of taxes in order to showcase Otly, and by covering these platform, can end up being costly.
Pros: by adding new revenue streams from adds in the parent app without the including of the kid’s app since it’s not allowed to expose them to the market world.
Cons: A lot of customers can easily get irritated by these adds, a ”get rid of ads” paid feature can be implemented for the parents who don’t want to see them in the app.
Pros: Otly makes profit for every customer using the apps with bank account in the affiliated with the company banks. More bank affiliations will significantly increase the revenue stream from the affiliation fees.
Cons: Insufficient customers may break contracts and affiliations between Otly and the banks.
Pros: This is the most trusted way to ensure the customer has trust in Otly and to make the customer recommended to someone else. Potentially increasing the consumers. Plus, the company gets valuable feedback.
Cons: It is easily misunderstood by the customer resulting in a general loss of trust, revenue and in the worst-case affiliations with banks.
Pros: It will provide Otly with more options in terms of expansion, promotion and cultural translations. They will be able to make more contacts with banks, investors, costumers.
Cons: The personnel have to be found, paid, taken care of and insured.
Expenditures will increase such as: wages, travel costs, etc.
Pros: It will increase customer, investor and banks’ awareness. It will increase customer confidence and expand Otly opportunities and options on foreign markets. Potentially increasing income from bank affiliation fees.
Cons: It will also increase travel costs and wages, also fees owed to other companies promoting Otly.