German bank with interest rates determined by Facebook likes arrives in the UK
Facebook likes will determine banking customers interest savings rates at online German bank, Fidor, which launches in the UK today.
The digital bank is attempting to grow through social media and engagement with its customers. The basis of its model is a savings account with a baseline interest rate which increases in relation to the number of likes the bank receives on Facebook.
Fidor- derived from the Latin word for trust- offers savings accounts with interest rates at 0.25 per cent which can increase to 0.5 per cent depending on customers’ willingness to rate it on Facebook. The bank says that each 2,000 likes on will increase the percentage interest by 0.05 per cent.
Further online engagement is encouraged with the bank’s “community Karma” forum which rewards customers for asking questions and finding spelling mistakes.
Chief executive of Fidor, Matthias Kröner said the bank’s community would offer a platform for conversation with its customers and user base which would “define the future priorities”. He added that Fidor was “the only bank paying money for asking questions. I don’t there is another bank on the planet to be paying for asking questions. Normally you get an annoyed look”.
The bank is part of a new wave of digital only banks that don’t have branches and instead try to attract digital savvy customers. Fidor’s current account only offer transfers to other banks and mobile phone numbers, but it plans to allow customers to open a savings product, which it says may eventually also be priced depending on Facebook likes.
Fidor currently has 100,000 customers in Germany and over 300,000 community users and Kröner is aiming for 50,000 UK customers within the next three years.