By Pat Patel – Global Content Director Money20/20

When I hear the word bundle I tend to get catapulted back to my childhood, back to the school playground, when the word ‘BUNDLE’ was shouted and you ran. You either ran to jump on the poor soul who was about to be bundled or ran away from the scrabbling mob bundling you. Now onto financial services. This story is about whether we are heading to or from (or in fact back to) a good old-fashioned bundle.

The Financial Services playground has experienced a movement towards, then away and then towards bundling in recent years all driven by insurgents. While the majority are scaleups such as Zopa, TransferWise, Robinhood or even Square, some are consumer internet companies such as Amazon and Alibaba (via Ant Financial). Moving from specialism to diversification in the quest for scale. But how do these insurgents make the unit economics stack up?

Bundling since the dawn of banking

In the beginning, banks built out their product offerings akin to ‘a supermarket’ for all financial needs (within reason). Cross-selling and cross-subsidising were key and banks capitalised on their strength of brand and the consumer and political need for trust. Scale and unit economics could be achieved and large players dominated their domestic markets and grew internationally.

As this trust deteriorated during the financial crisis, alongside a demand for better products and choice, the door opened for startups to offer niche products that were either cheaper or easier to use, leveraging their agility and new technology. By leveraging mobile app stores, open APIs, cloud infrastructures and…