Helping banks create digital business models that bring rewards for their customers

Helping banks create digital business models that bring rewards for their customers

Georg Ludviksson, Founder and CEO, Meniga, outlines how his fintech firm partners with banks to unlock value from the transactions of over 90 million people in 30 countries


Selected by as one of Iceland’s nine hottest fintech startups in 2019, Meniga is one of the country’s fintech success stories. Could you provide our readers with some background to the company and how it contributes to the global financial industry?

I started Meniga in 2009. I consider myself a serial entrepreneur: I am a software engineer and started my first business in the dot-com boom at the turn of the century, then I moved to the U.S., did my MBA in Boston and, while I was there, a new generation of personal finance management software companies was emerging, like This concept struck a chord, as I have always been passionate about innovation at the intersection of technology and finance. I believe money and financial behavior is one of the major topics of our time: money worries are a leading cause of problems in relationships and life in general, and they are taboo to talk about in many Western cultures—it’s a big deal. This is an area about which I am extremely passionate, so I had an idea to start a company in that space.

I moved back to Iceland in the summer of 2008, where I was supposed to start a job in a hedge fund. The Icelandic financial sector was booming at the time, however the job never happened. I was due to start in October but then the crash happened in September, so it was not the best time to career-switch into finance. Instead, I went back to entrepreneurship and started Meniga.

Meniga started on fertile ground for several reasons. Firstly, because we had access to talent: most of Iceland’s top software developers had been working for the banks until the point of the financial crash, but suddenly talent was made readily available to us. The big banks at the time were also under pressure to give relief to households and small businesses that were seeing a big drop in purchasing power. This allowed us to become a pioneer in personal finance management solutions for banks. Our higher purpose when starting the business was to help people lead better financial lives, but our path to do so was through digital banking, where we felt those solutions naturally belonged—and so we made an early choice to work with banks.

From Iceland, we expanded to Scandinavia, then into the rest of Europe and then the rest of the world. Now we are one of the two or three global leading companies in our space, offering white-label personal finance management software to banks. Over 90 million people across the world use digital banks that are powered by Meniga.

To stay relevant to customers, digital banks need to evolve from being a place focused on just transacting or doing banking, to helping users in a more coach-like manner, giving insights, personalized advice and helping customers understand and manage their money in a much broader sense. That was our original vision: to help banks transform to a much better user experience where it feels like your bank is a digital financial advisor that knows you. That has been our journey since the start and today we describe ourselves as an innovation partner to banks.

We are privileged to work with many of the leading banks in Europe. We’ve been part of many success stories in the past couple of years. We launched an app called moey! with the Portuguese bank Crédito Agrícola last year, that is now successfully competing with the challenger banks there. We are also behind a new generation of banking apps rolled out by UniCredit, which are offered in 12 countries in Europe.

We have doubled down on this strategy as an innovation partner to banks and have taken investment from some of our key customers. We recently announced an investment from the second-largest banking group in France, BPCE, and also from Crédito Agrícola in Portugal. Before that we had Islandsbanki, Nordea, Swedbank and UniCredit as investors. In a nutshell, we are helping banks digitize, create better user experiences and, in some cases, new business models. With the COVID-19 crisis we are entering a new era, where our solutions are becoming even more relevant. It is a very interesting time.


Iceland is one of seven European countries in the top 10 of the Global Entrepreneurship Index, in which it currently ranks seventh. Can you tell us a bit about your journey as an entrepreneur in Iceland and the challenges you faced?

Like any location, Iceland offers both strengths and weaknesses. It is a great place to take the first steps, with an excellent support network for early-stage startups. Iceland also enables you to do things fast: we were able to close sales with Icelandic banks faster than we could have done elsewhere. It’s a dynamic, fast-paced economy, with world-class talent and technologies. However, once you grow beyond a certain size the market quickly becomes too small. It has a small population and the talent pool, while fantastic given the size of our country, is not very deep. Iceland is great for the first steps but one of the challenges is that, beyond that, you have to build in parallel elsewhere as well. I moved to Stockholm to set up a sales arm for the company before it was one-year old and, since then, we’ve grown in parallel in Iceland and other locations. Iceland is still where we have our largest office but we have sales in London, and research and development (R&D) in Stockholm and Warsaw, with additional teams in Singapore, Barcelona and Helsinki.

Funding is also relatively favorable, with government grants and private venture capital funds that help in the early stages. Most good companies can usually get funded in the early stage—but then again, the challenge is when you reach your growth stage and need to meet the corresponding market. So, you have to be international and then fundraise elsewhere. Another challenge is the legal environment: it is fine and progressive, but international investors may find it difficult to invest simply because they don’t know it. They are more comfortable investing in better-known domiciles, such as the U.S., the U.K. or the Netherlands. Those are the challenges but once you are aware of them, there is always a way to overcome them.


Innovation is at the heart of most tech startups. Your company is very much focused on customer experience and using technology to interpret data, add value to the end user and help people with their finances. Could you tell us about your latest innovation: the reward systems that you have put in place. Are these services already being rolled out and how is the market reacting to them?  

Our Cashback Rewards platform is a very interesting service. We’ve built a business selling software to banks but one of the things we are doing now is building a multi-bank network to bring cashback rewards to digital banking. The challenge of many banks is offering some kind of loyalty or reward solutions. If you are a big bank with millions of users you are well positioned to bring loyalty and reward solutions to your customers because your scale makes you very interesting to the merchants. What cashback rewards means is that we are helping customers stretch their dollars by finding them discounts in the form of cashback rewards.

We personalize the rewards based on users’ spending history, essentially letting merchants compete for their business by making the best offer to consumers who are proven to be interested in their services or products. It’s an opt-in service we just launched with Nordea in Sweden in March. It was the first new service we rolled out since the start of the COVID-19 outbreak and it was well received. It helps you get cash back but also helps local businesses. Businesses are kind of competing for your money. It is tailored to your spending habits: if you go to a hardware store then this hardware store will compete for your business and offer you introductory discounts if you try their store. It’s a way to communicate between merchants and consumers inside the mobile bank. This is where the transaction comes into play.

Banks have to see transactions like Amazon does books or Netflix does movies: the pivotal element is data which is key to unlocking value for their customers. Through data, banks are able to give good advice and targeted rewards thus creating smarter consumers. There’s no downside to it. Consumers save a lot of money and it influences their buying behavior while the merchants get a very efficient way to target customers. In a way, this system creates efficient marketing inside digital banking. Many banks tell us they are only a bank, they are not an advertising platform, but more and more banks realize this is the future: banks have to look at transactions in a different way to create value.


Which other innovative technologies or services are in your pipeline to continue to enhance your customers’ experience?

Everything we are doing revolves around creating value out of transactions. Another solution we’re very excited about aims to help people understand their carbon and environmental footprint. People want to understand their carbon footprint, to estimate it and actually take action to offset it. Since banks have a good view of people’s spending, what we have done is work with existing research to provide an estimate of carbon footprint based on a customer’s spending in stores and in various categories. For example, if you go to a grocery store, we will be able to estimate your carbon footprint per dollar spent. Our partner banks have the possibility to offer this service to their customers—to allow them to see an estimate of their carbon footprint. As part of the solution, we also give access to United Nations’ endorsed projects for carbon offsetting. We have already launched this in Sweden and we are working with several banks to add this to their digital banking services.


Technology and digitalization have, without a doubt, revolutionized the banking sector worldwide in the last decade. Fintech companies have created a new paradigm in banking and put pressure on conventional banks to prioritize technological solutions and efficiency. How do you view the relation between fintech companies and conventional banks, and how do you see this developing in the future?

It’s a very interesting and dynamic industry. On the one hand, there is fierce competition with the challengers who are very serious and putting pressure on incumbents, but there’s also a lot of collaboration. We are in the camp of the incumbents mostly, even if we also work with challengers. We see different strategies emerging that are very interesting. Some banks are transforming their digital channels into a marketplace where other fintechs or even other banks can offer their solutions. Historically, banks have managed the whole value chain, they have loans and all their other products on their balance sheets. What we are now seeing is a breakup of the value chain with some banks, fintechs or incumbents offering many products from third parties. Some banks realize that they don’t have to have everything on their balance sheets, they can choose to be a marketplace, only provide the front end or storefront, and just invite the best fintechs to offer their solutions through their distribution channels.

Some other banks don’t want to be at the front end, and only want to have the best APIs and become a wholesale bank. Different patterns are emerging that are reminiscent of the telecoms industry 20 years ago, when deregulation was introduced that led to the breakup of the value chain and a host of new telcos that didn’t necessarily have to build the whole infrastructure—it was a new era where whole new business models emerged. In the rewards solution that we are working on with Nordea, for example, the banks are introducing a new business model into their digital channels, where the merchants are funding the discounts while at the same time they are giving their users a major new reason to use their digital bank. It’s not a service that is founded by the banks but it’s a multi-bank network where mobile banking is becoming a channel for a different kind of service based on smart use of transaction data that users opt-in to.


Has the lockdown period created an unexpected stimulus for your business by reinforcing the need for stronger and better digital solutions from banks?

We now have the benefit of a few months of observation over the coronavirus crisis. Generally speaking, digital banking has gone up in importance, especially in southern Europe where we’ve seen a 30 to 50 percent increase in digital banking traffic. Most people couldn’t go to branches and had to use their digital bank. Banks had to fast track everything and accelerate their digital journey, taking a leap forward on the things they have been working on for 10 years. It’s been a stretch test.

With very few exceptions, all Meniga’s projects that we’re running with banks have stayed intact or accelerated. Banks now feel they are well positioned to weather this storm and they feel that they have a role to play. They are part of the solution and not part of the problem, as was the case in the last crisis. That gives them a sense of motivation and we see them working hard. They are also part of most governments’ relief packages that are delivered partially through banks. We also see some of them going back to basics, pushing bleeding-edge innovation projects further into the future or on the back corner. Simple personal finance management solutions to help people manage their money are now much more relevant.


Your products are being used by over 90 million banking customers across 30 countries. You’ve recently acquired a Swedish company—the rewards platform Wrapp—and opened offices in Barcelona and Singapore. What are some of the markets that you are currently locking target on?

We are primarily a European player. We are strong in the Nordics, as well as France, Italy, Spain, and also Germany and Eastern Europe to a degree. We expect most of our growth to come from Europe in the coming years, with so many opportunities and interesting things happening in Europe. Having said that, we also opened an office in Singapore last year and have recently acquired some key strategic customers in Southeast Asia, in India and in Singapore. This region is one of the fastest growing in the world, with lots of people entering the banking market in the next few years. That’s an area that we are seeing as a substantial growth driver and a significant part of our pipeline is in that region.


Are there any specific areas, perhaps in R&D, where you are keen to find new, symbiotic partnerships to explore new frontiers?

Design is very much part of our DNA. We are proud of our user experience and this is what gets us inspired. When we started the business, we built our products based on our own vision. Now, most of our innovation is done in collaboration with our customers, such as the carbon offsetting, the rewards platform and the cash-flow management systems. We are doing all this in partnership with banks that have identified these things as key needs for their customers. We like to do this in collaboration, so we have a path to deploy these innovations quickly and usually there is a better outcome as a result. To a certain degree, we also explore collaborations outside the financial space. For example, by working with merchants on our rewards platform or seeking guidance from the UN Intergovernmental Panel on Climate Change for our carbon footprint solutions. We expect to do more of that going forward.


Do you have a final message for our readers?

Iceland has very much demonstrated that when there is a crisis there is always an opportunity—it’s a cliché but it’s true. A lot of startups launched during the last crisis and they were usually ones that flourished a few years later. I believe now is a good time to innovate and build a business, whether in Iceland or somewhere else. If you can find something that is more relevant to the new post-COVID-19 world, this is an excellent time to start innovating.