Meet the men who cut to the chase. Spaces tenants Vincent and Jasper of Powered By The Crowd have done away with middle man banking to take money lending back to its traditional roots. Their business provides crowdfunded mortgages for millennials to get their foot on the property ladder. They offer their thoughts on the concept of community and making savings and investment a social, shared experience.
Can you tell us about what you do?
Jasper: We have started up our own business that allows people to receive mortgages without the traditional financial backing of a bank. Powered By The Crowd connects savers and lenders directly. At the moment, when you open a savings account and deposit money, you have no idea what happens to it. You gain interest but you don’t know where it comes from. If you have money that you’re not using right now you can lend it to someone else. You know who you’re lending to and what’s being done with it. It’s this transparency and honesty that people really want.
What’s behind your idea?
Vincent: We want to put the personal back into banking. We’re cutting out the middle man and the idea is that everybody benefits. You can offer the savers a higher interest and the lenders a lower interest by simply getting rid of everything that is inessential. If you cut through all of these layers you are left with a very lean operation that enables people to connect with each other. It also saves lots of costs which means we can bring people strong interest rates.
Jasper: We’re bringing it back to the fundamental idea of money lending. It’s not complicated, well, it certainly shouldn’t be! But the banks make it so with all of the hoops you have to jump through before decisions are made and funding is granted. We’re going back to the traditional concept of banking, but then highly automated with the efficiency that comes through much greater experience.
It seems that it would make the whole process of money lending much more transparent, that idea of striping back the layers and sticking with the essentials.
Vincent: Absolutely, so you know exactly what we do with your money. You also know that you’re actually helping people. Helping people buy a house, get on the property ladder, or start a savings account. It’s a much nicer feeling than just opening a savings account with very small interest no attachment to the process.
Who will your idea benefit?
Vincent: If you’re self employed it’s very difficult to get a mortgage, because at many banks you have to show at least three years of steady income before they will even consider you. If you don’t yet have that, you need to bring all your numbers for them to crunch and hope for the best. We believe it can be easier, faster and much more transparant.
Jasper: It’s quite funny that if you’re self employed it’s difficult to get a mortgage, but if you hire somebody they get a mortgage without any problems. That’s the insane thing, if you have a permanent contract it’s ok but if you’re self employed it’s a different story. You can see that the banks are finding it difficult to keep up with societal and economic changes, but things will definitely improve as alternatives are being established.
So, you see yourselves as the alternative to the current banking process?
Jasper: Yes. We believe we can optimise both the process and the way of working with people, by making it more personal and making a better judgement on whether they can get a mortgage.
Vincent: When I bought my own house, I realised that mortgages are very simple products: You need money, somebody else has money, put those two together and you have the concept of the mortgage. For some reason most people think it’s a very complicated process and that you need to seek advice. I mean, why do you need the bank? It’s just a loan for a lot of money. It’s not complicated.
What makes this experience different to traditional banking?
Jasper: Our gamification elements can help people to eventually reach their goal. You can help people set goals and adjust them relative to their situation, helping them save more for later. Elements like “who’s the best saver in your group of friends?” will engage people to start thinking ahead.
Vincent: If you look at the current savings and investments accounts, they are so dull and boring. We think it’s good to make it lighter, more enjoyable experience. It shouldn’t be all that heavy and overwhelming. You’re making money for free, how cool is that? Money doesn’t have to be singular and isolating, it can also be a social thing. There’s a strong community element to our business through helping others achieve their goals.
What do you see for the future of this kind of financial crowd funding?
Vincent: Banks aren’t renown for their great level of customer service. It’s often a bit of an unpleasant process that forces you through their labyrinthine system that you rarely come away satisfied. However things are changing and more alternatives are being created.
Jasper: You have these niche players that take one little aspect of what a bank does, but do it way better. With great customer service and a friendly user experience. For example, the bank knows the exact date that you’re picking up the keys to your new house. Why doesn’t someone come by with flowers to congratulate you? That would give me a great experience, a warm feeling to think that they care about me.
Do you think this marks the beginning of the end for banks and big financial institutions?
Vincent: There probably will be a role for the banks but it’s hard to predict what it will be. We also place ourselves in the position of the alternative to the banks. You can still choose a bank. Lots of people are very loyal to their banks and place a lot of trust in them, it’s a big decision changing where you put your money. But people are going to have more and better alternatives.
Jasper: There’s a lot more people to people services. Spaces, CitizenM, Uber, they’re all connecting people with each other. We’re very drawn to this concept of community and collaboration, and you can see a big trend of businesses moving towards this idea. When you walk through the door here you see people drinking coffee and talking and walking around, it’s very open and social. Modern technology allows us to have connections with people all over the world, we don’t have to collaborate with them in the same physical space, either. So there are going to be interesting times ahead.
Vincent: It’s funny that we ended up at the Zuidas, the heart of Amsterdam’s financial district. We’re challenging the banks their home turf. But the most important reason we’re here is that we really like the atmosphere at Spaces Zuidas.
Any final thoughts?
Jasper: One of the things about Spaces that’s interesting for us is that there are a lot of self employed people and small businesses. We think this concept will be very interesting to those people. We want to connect with our startup neighbours at Spaces and learn from their experiences. If they would like to find out more about our idea or if they just want to meet and chat, our door is always open.
Great, thanks both.
You can find Vincent and Jasper at Spaces Zuidas. Interested in finding out more about their great idea? Check out their website and follow them on facebook. Or connect through email to arrange a social meet-up.