Tried and tested: Money transfers using a phone number

Just over a year ago, Aegon’s online bank, Knab, implemented a system that allows customers to transfer money using the recipients mobile phone number. The European Central Bank is now working on a similar European-wide solution.

While ECB Executive Board Member, Yves Mersch, expects a similar European system to be ready within three years, Knab is already sharing learnings with the financial community. Last month, Knab CEO, René Frijters, took part in a round-table discussion with the Parliamentary Committee on Finance, and representatives from the Dutch Central Bank, as well as the Financial Markets Authority.

With 18 digit IBANs being so difficult to remember, it's no wonder that Knab's money transfer via text has proven so popular. Just over a year since it was launched, the service has attracted a significant number of frequent users who make at least one money transfer per week.

Of all the customers who used the service once, 56% continued to use it. Transferring money via text message is convenient, and saves time, especially if you don't know a person's IBAN, but do know their phone number.

Angelina Kemper from Knab adds: "It's great solution if, for example, you need to pay friends back quickly after an evening out, but don't have their IBAN. We've not actively promoted the service, but the level of repeat use, and the large group of frequent users indicates that there's a clear need. It brings added convenience for our customers."

Infographic of Knab's 2015 performance

How does it work?

Using the Knab App, you simply select a contact from your smartphone's address book. The friend receives a text message that you would like to transfer them money. The friend then adds their IBAN and the transfer is completed. The recipient doesn't need to have a Knab account.

Knab was established by Aegon in 2012 and already has almost 90,000 customers. With no physical branches, customers can contact the bank via telephone or online from 8:00-22:00 any day of the week. Knab supports Aegon's strategic focus to deliver excellent service to customers at competitive cost levels, by increasing scale and improving the quality, efficiency and accuracy of its processes through technology.