What’s in a corporate name – or in this case a symbol?
In the conservative financial services sector the answer is a lot and that’s why so many providers use ‘trust’ or ‘mutual’ or ‘assurance’ in their title.
But the US focused mobile banking upstart ChimpChange was never going to ‘ape’ the majors. To date, the company’s funky moniker and logo has served it well in attracting US millennials to its debit Mastercard-based transaction product.
The trouble is, the wider audience (including the investment community) are less fond of the simian shtick.
“The name is polarising,” admits founder and managing director Ash Shilkin. “Our core active users love it, but then you have a lot of other people who hate it.”
The company’s investors recently voted overwhelmingly to change the company’s name to Change Financial. While more quotidian, the new title should help the company win broader appeal for other products such as credit cards.
Change is the only ASX-listed digital banking platform and only half a dozen pure-play mobile bankers in the US. The fragmented state-based US banking industry has been slow to adopt technology, with cheques remaining a favoured medium of exchange for wages.
Fees are sky high, with typical monthly account keeping charges of $US15-20 a month.
According to Change, 35 per cent of the country’s 92 million millennials are unbanked or under banked. The ease of internet comparisons also means more traditional bank customers are saying ‘banks for the memory’.
Change reported a net loss of $US8.76m for the 2016-17 year, on revenue of $US602, 000. But the trend is encouraging, with Change hitting 100,000 customers in the June quarter.
Broking analysts project 250,000 customers – and cash break even – by the third quarter of 2018.
Change’s customers originate mainly from social media. But there’s scope for a partnership with another institution –possibly a bank – to tap a captive audience of millions. “The banks are surprisingly interested and welcoming,’’ Shilkin says. “But everything moves so slowly in banking land.”
Change has also forged a “strategic partnership” with e-commerce site Hollar Inc, which has two million active users.
From next Monday, Change Financial will also be listed on a US platform, the OTCQX Best Market. Given acquirers in the sector aren’t monkeying around, it will be interesting to see how many bananas US investors are willing to throw at this one.
Rival operator Simple was acquired for $US117m and it has similar customer numbers to Change, which has a market capitalisation of around $50m (including $11m of cash).
Two others, Zenbanx and BankMobile were bought for $US100m and $US175m respectively.
