I was only 18 years old when I left my home country, Austria, to study in the United States. Arriving in Boston, I had no issue opening a bank account, despite being a foreigner and not even having a social security number yet. Opening the account was easy, but I hated all the high fees.
After graduating I worked in the financial services / IT industry until 2001, when the dot-com bubble burst. I lost my job in Boston, all my friends got laid off, and I wanted to move back to Europe. My girlfriend at the time suggested I apply to business school. I figured this was a great plan, and applied to the London Business School. I was a bit ignorant about how difficult it would be to get in. Fortunately, Lady Luck was on my side and I got accepted on the course.
Struggling to open a bank account
London was a whole new banking challenge. To get a bank account in Britain you needed to have two utility bills. But how could I get a flat when I can’t get a bank letter? A classic catch 22. Most of the students improvised, used friends accounts, even faked documentation, so they could get an account. Any account, from any bank, would do.
Most people who are "fresh off the boat" are forced to improvise and get creative because the five banks or so to choose from don’t want your business. In the end, you will probably cost them more than you make – especially if you don’t settle permanently and take on products that have real value to a bank, such as insurance and mortgages.
Need for fully-integrated banking system
Fifteen years on, I can fix this problem. The US has a fully-integrated banking system, so it doesn’t matter what state you’re in. Not so yet in Europe. Our research shows that two-thirds of newcomers to the UK can’t get new bank accounts. We hear how banks are using note-cards in different languages to communicate with would-be bankers.
Europe still does not have an integrated banking system; instead it is still very much a state-by-state business. Recent advances in bank licence passporting have improved the possibility of an EU bank, but the true European account remains elusive.
Rise of the ‘new Europeans’
How big a problem is this? Roughly 30 million Europeans live and work abroad. Those we call “new Europeans” don’t think of their home as just Italy or Estonia; no, we think in much larger terms. The EU has really changed the way young Europeans look at the continent. The EU is often criticised, but this generation and the next must not forget what travelling and living abroad used to be like.
It would seem logical that banks would listen and adjust their products to match an integrated Europe and offer products tailored to the new reality - a reality that millennials don’t have a comparative experience to. Trust me though, being from Austria, the horizon was quite limited and I was very fortunate to be able to go abroad and experience life on a much larger scale than had the EU not happened. I am a big believer in integration, yet the banking problems remain.
Building a bank that works across borders
The solution is quite obvious: build a bank that works across borders and simplify the sign-up process. But banks can’t meet their customers’ requirements. An executive at a top 20 bank related the following anecdote: The bank invited a group of millennials in to describe what they would like from their banking experience. After the millennials had their say and left, the bank officers turned to the IT department, who told them, “We can’t do any of those things they just described.” The experience, the executive said, was “soul-crushing”.
Seeking a solution to a common problem
As an entrepreneur, I love a problem and the challenge of finding a solution. Especially one that lowers prices and increases the flexibility and convenience for our customers, whilst still allowing for a profitable and sustainable business model.
This is what I now have the great privilege of doing – building a pan-European retail bank for us “new Europeans”. This solution is europeone. So, where are we? We started on the europeone journey about two years ago and are busy in development. It’s pretty radical and I think you will love what we are working on.
And where am I? After 22 years, I recently returned home to Austria. Do you think I could get a bank account as an Austrian returning home? Could I get a bank account right away? Of course not. I was no longer in the system. Go figure!
This is a personal journey, but not a unique one. europeone is looking forward to serving you.
You can sign up for their service for free and without any contractual obligations at http://europeone.com/home/signup.html