Hatch founders don’t come from the financial industry. Instead, we are start-up specialists that look to solve people’s problems with a digital-first lens.
Since launching in 2018, digital investment platform, Hatch, a Kiwi Wealth spinoff, has for many first-time Kiwi investors offered a direct line into the lucrative US share market. Over the past year, as market fortunes have waned and waxed in response to Covid, a crop of newer, younger and more tech-savvy investors have flocked to the hand-held trading platform.
FST speaks with Kristen Lunman, General Manager and Co-founder of Hatch on navigating the Covid storm, overcoming the ethical quagmire of app-based retail trading, and why the weight loss sector is proving a fount of inspiration for today’s wealth sector.
FST Media: Hatch launched two years ago as Kiwi Wealth’s dedicated digital investment platform – locally owned by NZ Super Fund, ACC, and NZ Post. What inspired the launch of this streamlined securities-trading platform? Who would you define as your target market for the service?
Lunman: We spoke to hundreds of Kiwis about what ‘wealth’ meant to them. We learned that it meant choice: the freedom to travel, to lead a healthy lifestyle, working in a career or job they love, and the freedom to move on when unfulfilled.
We also found that these modern, ambitious Kiwis hadn’t found a way to grow their wealth to meet their lifestyle goals of ‘wealth’. They are faced with unattractive wealth-building opportunities with low-yield options (e.g. savings, term deposits), and an inaccessible property ladder.
Many current wealth management offerings are expensive, exclusive, elitist, and old school.
Looking at the macro environment, we recognised that a new wealth revolution was already happening, and we needed to meet new market needs with new thinking. Enter Hatch. Our mission is to give these new, modern Kiwis access to the tools, knowledge, community, and investments previously reserved for the financial elite.
Our more than 80,000 customers range in age from 18-90, but they all share one thing in common: they want to do better with their money and actively take control of their financial lives.
FST Media: The Covid-19 lockdowns saw a notable surge in retail investing, no doubt bringing Hatch scores of new customers. Walk us through Hatch’s digital agenda over the next 12 months. How is the platform evolving to optimally serve this rising crop of digital investors?
Lunman: Covid-19 was a perfect storm for investing platforms. In lockdown, many had time on their hands to assess their financial situations; they weren’t spending as much, and they viewed a market crash as an excellent time to get off the sidelines and into quality shares that were effectively “on sale”.
Hatch founders don’t come from the financial industry. Instead, we are start-up specialists that look to solve people’s problems with a digital-first lens. This isn’t a handicap in a highly regulated industry! We consistently look to push boundaries where we can, and we don’t accept the status quo. Our customers dictate our roadmap; our biggest request now is Kids Investing Accounts, so we’ll launch this feature later this month. We’re are also aware that our customers want everything in one place – so, we’ll add additional share market and fund propositions in the coming year.
FST Media: The ‘gamification’ of day-trading came under intense scrutiny last year following the death of 20-year-old Alex Kearns who tragically misunderstood a financial statement on US investing app Robinhood (Kearns believed he had incurred trading losses too big to recover from). How can digital technology be used to promote safer and more responsible trading, especially among newer or ‘greener’ investors?
Lunman: This is something we are incredibly passionate about. We can’t enable people to meet their lifestyle goals if they are day-trading or speculating. Investing takes patience and a mindful approach. Understanding what you are working towards – your “why” – and then making a plan for when share market bumps arise (as they invariably will) is critical to building long term wealth.
We take our role as educators seriously and invest a significant amount of time in easy to understand blogs, webinars and even a free Getting Started Course. In less than 10 minutes a day over 10 days, Kiwis can learn about risk, share markets, and even become a shareholder – all without financial jargon (a bad industry habit!). We’re proud that we’ve had more than 20,000 Kiwis complete our course.
To engage a modern investor, it’s essential to design a unique user experience that makes investing delightful. Still, this in no way means you must gamify your product – this isn’t a good outcome for anyone.
What it does mean is that we need to challenge our team to simplify a historically complicated experience by providing the tools and information at the right time in the right medium.
FST Media: When thinking about digital innovation, what industries or organisations beyond financial services do you look to for inspiration?
Lunman: Finance is boring, and the industry hasn’t quite cracked how to make it exciting or engaging. So, we look to other sectors with similar challenges, like the weight loss industry as an example. Losing weight is about as fun as sticking to a budget – so we need to look to those that flip it on its head.
The ‘Noom’ app for physical wellness has vital lessons for financial institutions. Health education, recipes, daily engagement, calorie and fitness tracking, and even health coaching is through a mobile app. Members receive highly personalised daily wellness tips, and by leveraging a crowdsource functionality, Noom continually improves recipes and their overall experience. The combination of data and behavioural science is the key to unlocking long-term health empowerment for millions.
FST Media: What one breakthrough technology, platform or innovation would you like to see further advanced by the financial services sector – one that benefits both industry and end consumers?
Lunman: Data is the new oil, and those who learn how to harness it (for the customers’ benefit) safely and responsibly will win. Of course, raw data isn’t valuable in and of itself, but value is created by connecting it to other relevant data and shaping a predictive and personalised experience.
Artificial intelligence will be a powerful force in how we interact with money in the future.
Using a simple example: with savings, some financial apps already use a series of algorithms and basic machine learning to assess how customers spend, how much they can afford to move into an investing account, and when they should do so. Most analyse data on spending patterns and the timing of regular payments such as bills. Modern consumers will expect things to be more predictive than we’ve ever seen before, and we can only do this with Open Banking and the smart use of data.
FST Media: Prior to entering New Zealand’s fintech scene, you held various roles leading product and marketing teams across both North America and locally in Wellington. How did these experiences prepare you to take on a leadership role in a burgeoning fintech like Hatch?
Lunman: My early career was in growing products and businesses. To succeed in a growth role, it’s beneficial to practice curiosity and humbleness to understand what customers need. I learned very quickly that it’s important to stay very close to your customers and race to keep up with how they want to interact with the world.
I’ve been a bit of a business generalist throughout my career; so, I can understand a profit loss statement, pitch for capital, manage stakeholders and foster a positive culture within a team. This has all helped shape the value that I bring to Hatch. The most important lesson I’ve learned is to know your limitations and hire incredible people around you to fill those gaps, and I’ve precisely done that at Hatch.
FST Media: Finally, what strategies do you use to maintain a healthy work-life balance?
Surfing is the perfect sport for me! Waves are inconsistent, and when they’re on, I’m out. Mental health must take a front seat, and there’s nothing like the great outdoors to take the edge off.
I work long hours so, to be honest, I can’t do it on my own. To balance a fulfilling career and raise a family, I needed a partner who would be my equal in every way – from ferrying kids around, to housework, to cooking. I’m so proud that our kids are witnessing a modern marriage. ◼