Bank customers will soon be able to sign up for computer-generated tips on how to get on top of their credit card debt, manage their budget, and eventually, save money on their electricity bill.
That is the ambition of start-up Douugh, a financial technology firm this month launching a pilot in Australia of a financial “personal assistant,” based on artificial intelligence.
It is the latest example of a fintech start-up seeking a piece of the banks’ lucrative financial relationships with consumers, as the public’s trust in traditional banks wanes.
The platform, which has already launched in the United States, will work by allowing customers to essentially download their financial history, which is then analysed by the assistant, called “Sophie.”
Founder Andy Taylor said the platform will initially conduct a financial health check on customers, by measuring how their spending compares with income.
“That allows us to see, are you drowning in credit card debt, or are you saving?” said Mr Taylor.
The longer-term plan, however, is for an app that is integrated with other banking products, and is pro-active, reminding customers about upcoming bills, or making suggestions about how to save money.
By early next year, it aims to introduce a transaction account and debit card, to be supplied by a separate licensed Australian bank, followed by a line of credit later in 2018.
Mr Taylor said its loans would be a cheaper alternative to credit card debt – a lucrative line of business for the banks, but an expensive type of debt for customers.
“The current societal banking model is simply failing to proactively educate people about money management, partly due to the ongoing operation of a legacy business model designed to keep people in a debt cycle,” he said.
From late next year, it is aiming to launch a “market place” to connect with other apps spanning industries as diverse as retail, utilities or wealth management. The platform is intended to ultimately act as a “financial control centre” that could hunt down ways to save money.
“When we have our bank account, she could say ‘I’ve sourced another supplier for $30 a month, would you like me to switch you?'” he said.
It initially plans to make money from the interchange fees paid when customers use a credit or debit card, but has not ruled out charging fees further down the track.
With banks’ reputations damaged in recent years, fintech firms are increasingly targeting the market for “financial wellness” services.
Likely competitors to Douugh would include Acorns, a micro-investment app that recently said it had $100 million in funds under management, Pocketbook, and the first “neobank” in Australia also hoping to launch next year, Xinja.
San Francisco-based Douugh (the extra “u” was to help it secure a domain name) would also be competing with banks, though it will not actually hold a banking licence in Australia. Instead, it aims to team up with an already-licensed bank, to provide a “white label” transaction account to be offered under the fintech’s branding.