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Exclusive: ‘Challenging the challengers’ – Elliot Goykhman, Zelf in “The Fintech Magazine”

How would I describe Zelf? Edgy. Revolutionary. So seamless and slick it’s practically invisible; a bank so disruptive that it could only have been made for teenagers, because Zelf is entirely based where they are – on messaging platforms.

Proud to be app-free, it’s an instant bank for Gen Zers. And when it says instant, it means it. Opening a basic account takes a mere 30 seconds. Just pop an onboarding request to Zelf, and ‘30, 29, 28…’ done. Sending money works the same way.

Powered by banking-as-a-service platform Treezor, Zelf is so far available on WhatsApp, Viber, Telegraph and Facebook Messenger – and soon iMessage and Discord. And if you’re finding it hard to process how a bank can exist within a messaging system – or indeed why it would want to – then founder and CEO Elliot Goykhman says you haven’t ‘got’ how the next generation’s financial needs have already moved on.

“You have to see how technology changes over time and understand how new generations of people are using it differently,” he says. “Originally, you had internet banking, then mobile banking, so now you have messenger banking.”

Put like that, it’s obvious. The generation Zelf is targeting spends more than 65 per cent of its screen time in messaging apps. It’s simply making banking contextual to their experience – embedding it into their conversations – which Goykhman says is the root of most transactions.

The technology is morphing around our lives all the time. Take WhatsApp, the instant, end-to-end, encrypted chat platform that was acquired by Facebook in 2014. More than two billion of us now have the app installed on our phones in 180 countries, and use it not just to message our NBF, but increasingly for communicating at work and with merchants and other businesses, reducing data footprints and making better use of what we already have.

WhatsApp’s enhanced level of security has made it a compliance-friendly tool for forward-thinking payment services, too. It’s already working with banks in India and announced in June that it would begin trialling the offer of credit, pension and insurance products to lower-income, unbanked users in rural areas – although, admittedly, WhatsApp Pay’s rollout in Brazil this year has been less straightforward.

What makes Zelf different, though, is that it is a ‘chat native’ – a fully-fledged challenger bank, setting up camp within these messaging services and taking user-friendliness to the next level for an impatient generation. That 30-second sign-up was a challenge, but the workaround has been to offer limited functionality and postpone the full verification process to a more convenient time for the customer.

“We don’t have to burden the person who is sitting at a café, or in a cab, to start scanning their passport, or their driver’s licence, or their proof of address, right there and then,” says Goykhman. “The 30-second sign-up allows them to have a card and start using it, to be within legal limits. And then, when they feel the moment is right – when they reach a threshold and want more functionality – at that point, we perform the full know your customer (KYC).”

In other words, it doesn’t want to be the banking equivalent of a parent nagging a teenager to tidy their room when they’re heading out. This neo doesn’t want to slow up its Gen Z customers or stop them using the service because of something as boring as admin. Getting them hooked in, before getting them booked in, is all part of the strategy.

It sounds like a face-palm moment in banking – like realising that there was a shortcut home you never knew about, or a life hack that’s painfully simple. Why would a neo bank so extremely focussed on convenience, pressure customers with ID checks before those checks are absolutely necessary?

Zelf’s aim is to become a ‘full-scale neo bank, offering not only debit cards but also fully identified debit card accounts and investments’, says Goykhman. By 2022, it hopes to offer loans, credit cards, insurance, investments and even SME business accounts, too. It’s also planning to fire up voice-activated features, including for invoices. Well, why wouldn’t it?

“We’ll extend not only globally, but also to different parts of human life,” promises Goykhman. “For example, people have voice assistants – Amazon, Alexa, Apple Home, etc. They will be able to give voice commands to those appliances about their finances, anything from paying their utility bill to sending money to their friends [via Zelf]. The idea is for it to become their assistant and for it to manage all kinds of aspects of daily finances, their savings, their investments.”

Imagine a world where you simply announce to the room, ‘Zelf – pay my electricity bill, invest £50 in something green and send Joe Schmoe £20 with my love’… and, just like magic, everything happens. That’s Zelf’s ambition – to be an invisible financial butler, catering to our every monetary moment and wealth-related whim.

Global ambitions

This edgy neo has been gradually launching in Spain and France – chosen for their regulatory framework and contactless capabilities – with 350,000 people already signed up to receive debit cards. Key to its marketing are monetary incentives for referring friends, which is bound to appeal to cash-strapped teens.

“We felt that France and Spain presented the perfect opportunity in terms of the population size, contactless level and expenses per capita,” explains Goykhman. “From these first two countries, we’ll make sure that we cover the whole of Europe, then the UK and the United States.”

The goal for Zelf is to have half a million customers by the end of 2020, and to expand quickly to other European markets the following year. Within just two years, Goykhman is pushing to have five million customers, a banking licence and a global presence.

So, with free sign-ups, monetary incentives and spectacular scale-up ambitions, how will Zelf be profitable? Firstly, says Goykhman, it’s incredibly cost-effective to run, with, he claims, the lowest customer acquisition rate in the industry. With no app to maintain and fewer cards to ship out because it anticipates most users will use wallets or P2P (peer-to-peer) services, ongoing costs are a fraction of other challengers, too. It will also pick up revenue from its paid accounts, including Premium, Parent and Pro, as well as taking a slice from interchange fees. It’s a fair and frugal approach. As Zelf works on expanding its financial services, it will expand its revenue along the way, too.

Will Zelf fly off the shelf? Probably. It reminds me of my sister, Holly, who’s 17. When she sees me scrolling through Facebook, she gives me a sympathetic smile, the kind you’d give to a grandma who riffles through dog-eared address books to find a number to type into her mobile. For my Gen Z sister, Facebook is already for ‘old people’, its very presence a bit cringeworthy.

In a few of years, I’m sure she’ll give that same knowing smile as I search frantically for my Monzo card before the items in my basket time out and she says to the air ‘Zelf, authorise payment’.

This article was published in The Fintech Magazine: Issue #17, Page 66-67