Hello,
Sorry for the long post, but I saw a question that @Denisa.Neo posted a few days ago that asked us about our ideas on Neo’s fin tech future.
That is not exactly how it was put and I cannot seem to find the post becuase I think it was in a comment, but I am not sure.
Anyways, I have been giving this some thought for the past few days and I have a two things that I would like to share.
For context, I am a Dene-Metis from a small community of 800 people in the Northwest Territories. About half of the older generation / people older than the internet / people over 31 years old do not and did not have access to modern financial products such as the ones Neo offers today.
And I suspect that this is a common narrative for small, northern, rural, and remote Indigenous communities across Canada.
There is a decent subset of these populations that are esentially unbanked. Paying a fee to cash a cheque is the norm for these folks.
But within the last decade, a prepaid master card product started becoming available through affiliated grocery stores targetting this demographic.
These product offerings have many fees. I dont use them; I just see their posters in the stores when I go grocery shopping. I think they have fees when you load them, when you do more than a certain amount of transactions, monthly fees, and possibly more that are hidden!
So for me, a fin tech future in my community would be one where fin tech solutions, like Neo, can help people keep, use, and invest more of their money in one place instead of having to Frankenstein many banking products into one complex wealth management system like this dude.
With that in mind, I have two suggestion seeds I would like to plant here.
Firstly, it would be great if Neo had a cheque deposit feature that is comparable to a big bank.
At RBC, their cheque deposit feature allows users to have instant access to $250, and then it takes one day to process the rest of the funds. This is top tier.
At EQ, their cheque deposit feature makes users wait 5+1 business days to gain access to those funds. This is low tier, but at the very least, they are in the game/race/market.
Basically, if Neo had a cheque deposit feature that was comparable to RBC or even better than EQ, it would help a relatively unbanked population gain access to, keep, and use more of their money than what currently exists on the northern market today.
Additionally, another product that would be great for this subset of the potential fin tech market would be having access to low-cost index funds or an equivalent robo-advisor.
If Neo were able to successfully convert some of this population into Neo customers, these customers would probably appreciate having all of their essential banking and wealthing needs in one place.
I like the idea of Neo’s Investing products, and Ive tried them, but they were just not for me. The 0.75% fee (not including ETF fees) was too much, heck even Wealthsimple’s 0.5% fee (not including ETF fees) is too much for me. Now, I just use VEQT and a bit of MGAB as my core holdings.
But if i were new to fin tech, saving, and investing, a 0.5% is not much to pay for a convenient market matching investment product that does all of the balancing for me.
So again, in sum, if Neo had a fast cheque deposit feature, and a low cost index fund investment soultion, the relatively unbanked population could be a new market to disturb.
And for all intents and purposes, I am biased against the current banking products available here becuase they exploit a population that also lives with a high cost of living. In my mind, it is like they are paying an extra and unnecessary income tax.
I think if Neo can help these people save tens or hundreds of dollars a year from lower fees, it would make a big difference for this population because of their higher marginal propensity to consume.
But I am not sure and I could be crazy, but let me know there is anything I can clarify.
Have a good day!
Brad