On Thursday January 13th, Cake announced they’d no longer offer their services to the public, and as such the Cake app would disappear. The company will now focus entirely on Cake for Banks and Cake for Business. For many of our TriFinance colleagues this came as a surprise, after the passionate presentation of Pieter Schelfhout just a few weeks ago in November 2021. Let us break down this story in different slices.
Size matters
It may not come entirely as a surprise that the company is shifting focus. The cooperation with Argenta must have made the company realize that such partnerships were very efficient to obtain new users, or in other words to obtain new data. Convincing the client to use the Cake service backed up by the credibility of a Bank, seemed to have lowered the barriers to step in into the program. It may have also had an effect on the number of retail partners they could contact. Nevertheless, as size matters in these cases, this was a big step compared to convincing clients and retailers on an individual basis.
A shift of strategy?
The entrance of private equity did accelerate the decision to do so. In the end, money talks. If a sizable investor is more inclined to see their euro’s invested in European Banks, then likely the strategy will be adjusted to make sure that goal can be obtained. The public message of Cake to their users confirms the above.
But the key question remains: Could this potentially be a successful shift of strategy? In my opinion it absolutely will be, as they provide a plug and play solution for a desire which Banks were having since the beginning of the transformation to data driven strategies.
I’ll leave it open for debate if the acceptance of data driven applications as Cake is due to us being accustomed to profiling by big tech, or having more trust thanks to regulations protecting our privacy.
Creating insights into client’s behavior
A short view back to the past, 7 years ago, Rik Vandenberghe, then CEO of ING Belgium, told us when presenting the annual results, they were looking into the possibilities to mine the ING client data. Big Data was talk of the town at that period. The goal was to cooperate with Fintech companies, create insights into client’s behavior, and allow ING to be proactive when approaching clients. If you were following the Banking business at that point in time, you’d have remembered the outcry it created. “Have you ever! A Bank plans to mine our private banking accounts!”
It likely didn’t go ahead as planned, seeing the backwash in the beginning of 2015. But fact is that at the end of the year, ING took over Qustomer. Qustomer was at that point mainly a QR code, let’s say a digital fidelity card. They were looking for a partner to grow, and ING saw the technology as a tool to enrich client data with data out of other businesses and corporate areas. Starting to see the similarities?
Increased confidence in data mining
More than this, the common understanding and trust in data mining has shifted. There was no public debate or activist rebellion on Argenta’s implementation of Cake. While in the end, the service isn’t so much different from the ING plans in 2015. I’ll leave it open to debate, if we got numb to privacy related matters thanks to the extensive profiling by the big tech companies, or if we’re today trusting data mining much more thanks to the GDPR framework on personal data, but fact is that the Cake technology has become an accepted extension of the current offering of Banking services.
Conclusion of fact is that data mining technologies as Cake provides have become an accepted extension of the current offering of Banking services.
