Christo Davel

Christo Davel, former head of now-defunct online bank 20twenty, has launched a new online financial services venture called 22seven designed to help people better manage their money.

The site, which automatically collects information from users’ bank accounts and credit and store accounts, presents their spending and income in a graphic-rich interface, helping them better understand the source of their money and how they spend it.

The service, which is currently free during the beta testing phase, will cost R70/month (with the first month free) when it is launched commercially later this year.

“Our service doesn’t have all the answers but it does have a few insights,” says Davel, who is CEO of the new company. “22seven is founded on the idea that if we become more aware of why we make the decisions we do, we will be in a better position to make smarter money choices.”

The new company believes the flaw is that traditional financial management tools rely on objectivity, rationality, budgeting and discipline. “The reliance on purely empirical data to make decisions is the problem,” says Davel. “People are hardwired to make choices on instinct, intuition and emotion. It doesn’t matter how many budgets we do or how many books we read, we will still act like the complex, emotionally governed human beings we are.”

A core element is the concept of “play” and the importance of what game designers call “productive failure”, or learning from mistakes to improve decision making. Another component is behavioural economics — the study of the social, cognitive and emotional impulses that drive economic decision making. “We have used this body of knowledge to understand why we are stupid when it comes to money and to design a service that highlights where common mistakes are made,” says Davel.

What’s unclear is whether local banks will tolerate the service, which requires subscribers to provide their banking login details to 22seven so that the service can import their financial records automatically. The company insists this process is completely secure, with US partner Yodlee providing the back-end security and information collection systems.

22seven chief operating officer Chris Tisdall says banks shouldn’t have objections to the service reading their customers’ bank accounts because customers “have a right to their information to help them manage their money better”.

“It’s useful for banks to know their customers are, through the service, taking control of their money situation,” he says. “We are not in business of trying to disintermediate banks. We are not trying to compete with them. We are operating in a completely different space.”

Tisdall concedes that 22seven has not spoken to any of the local banks about the offering ahead of the launch.

Another challenge will be convincing consumers to enter their banking login details on the 22seven website given that the banks constantly drum home the importance of not sharing this information with third parties.

But Tisdall says the system is secure. “The technology platform we use is a read-only platform. It’s a permission-based, opt-in system. We do not store security credentials. Only Yodlee is allowed to do that and their system is leaps and bounds ahead of a lot of the SA service providers.”

22seven says it will “never recommend products or service providers” to its subscribers and will not act as a sales channel for financial institutions.  – Duncan McLeod, TechCentral

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