When you’re in your twenties, retirement seems to be quite far away. However, most Millennials are earning less than their parents. Saving and investing are great ways to close this gap in incomes.
Careless people who spend their money on avocado toasts. That’s what one might think of Millennials. But that is not the whole truth, says Sara Koslinska, co-founder of Limitless. It’s a mobile app that encourages young people to save and invest.
– Millennials make on average 25 percent less than their parents used to, says Koslinska.
That’s why their future looks entirely different than that of their parents’ when they were in their twenties. If Millennials want to buy an own apartment they have to save money for a longer time. Their relationship with pension is a bit different too.
More and more young people are self-employed, and they work for example as Uber drivers, designers, and software engineers and are not covered by pension scheme. They're in charge of their income after retirement.
An easy way to start
Koslinska thinks that the best way to reach one’s dreams or to get a financially balanced life after retiring is to start saving money and investing. That’s why she and her international team created Limitless.
The idea of the app is quite simple: when you buy something, a small amount of money based on the spending is transferred automatically to a savings account, and from there it goes to an investment fund you have chosen. The savings percentage can be anything between 2 and 20. So, the more you spend, the more you invest.
– Our solution is very flexible: it adjusts to your level of income and spending and your financial goals. We understand that financial products need to be built around user’s lifestyle. Moreover, it’s easier to reach your own goals with small steps.
Open banking challenge brought the team to Finland
Limitless was born when Koslinska and Ka-ming Lim met in Singapore in 2015. Lim had worked in the finance sector for 30 years, and Koslinska has a background in the startup world and as a serial entrepreneur. It didn´t take long before they started working with an app.
Before the app was ready, they met with Kristian Luoma, the head of new business development at OP. He told the developers about OP’s open banking challenge that was going to happen in Finland. The first version of the app was ready in 2017, and Limitless took part in the challenge and made it to the final four. This means they carry on developing the app with OP. One day the customers of OP might be using the app.
PSD2 makes life easier
Currently, Limitless has users in 17 countries. Many of them are living in Germany and the Netherlands. During the coming years, Limitless wants to expand its business.
– We want to grow this business and keep on providing the product to more and more banks and users. We think our product will evolve into something bigger. We wouldn’t get into a business if we didn't think we’re building a unicorn. We want to be available globally.
Koslinska tells that they wanted to start operating first in Europe because of the PSD2.
– I think it’s good that our regulators understand open banking and that they are giving an example to other countries. Even though I met my co-founder Ka-ming Lim in Singapore, we knew that Europe is a better market for us because of open banking.
For the banking sector’s customers PSD2 will mean new products that make life easier, says Koslinska. For example, Limitless is free for its users, and it provides an easy way to use the service no matter which bank they use.
– In our app, users have a chance to connect multiple cards and whenever they spend with any card from any bank the investment money would go to OP.
Co-operation is the way to take a step further
According to Koslinska the revolution of the finance sector is a significant opportunity both for startups and OP.
– If banks don’t react to the coming changes in the field globally, they can lose customers. Not only for B2C FinTechs but big technology companies like Amazon, as well, says Koslinska. An innovative startup can take the bank faster to the next level.
– We think that working with a startup is a way for banks to offer a good digital experience much quicker.
Also, when banks open their API’s, Limitless and OP will get more interesting data.
– It’s a tremendous opportunity. With our app, our partner bank OP would get insights into their potential customers and a holistic view of their existing customers. It would be a way for them to acquire new customers and also understand better their current customers.
So, what does this mean for the customers?
Probably better services, new products and new ways to invest and save money for their big dreams.
Writer: Silja Eisto