Self-driving money…who doesn’t love the sound of that? The financial industry has exploded with automated solutions over the past few years from rebalancing of investment portfolios to sweeping of cash from low earning checking accounts into higher yielding CD’s. Society today demands more and more that a Financial Institution (FI) make movement and optimization of the customer’s funds as simple and “frictionless” as possible. That’s all fine and good, as long as there’s money there to be managed.
Startlingly high numbers of US households today are in no position at all to benefit from these innovations in investment rebalancing or automated savings… they’re just trying to make it to the next payday. The latest step toward addressing this has been the Early Wage Access (EWA) industry whereby an individual can use any one of countless similar apps to access earned wages 2-3 days before their normal pay date. Again, that’s good. But there is no reason to “spike the ball” and celebrate as if that user has achieved any real financial success as a result of moving up their cash flow situation by a fixed amount of 2 days. It’s a one-time gain and gets no better after being used the first time. There is no more total income coming in than did before, and spending has not been addressed at all by these EWA solutions.
Millions of US households have serious and sometimes “disguised” financial behavior issues which desperately need to be addressed through simple-to-adopt solutions. A clearer perspective of one’s spending behavior versus available cash income is a great place to start. Think about it… to some degree, we all do mental comparisons of our lifestyles and apparent spending behaviors. What if this information could be curated and delivered in a beneficial way via simple technology available to almost everyone?
SPENDiD’s API has pioneered a new approach to offering demographically derived, peer-comparative spending intelligence for use by platforms in the fintech/PFM sector, whether that be digital banks, FIs, budgeting apps or financial wellness platforms. By leveraging the API’s vast unbiased databases and unique algorithms, developers can offer autonomous budgeting solutions, personalized marketing insights, and even valuable new secondary lending metrics. This technology helps the adopting developer better personalize the FI/account-holder relationship in an era where the parties may never meet face to face.
Such user-friendly technology is intended to help address an alarming trend in financial illiteracy and FI/customer separation. And it’s not just the household or individual who suffers due to their cash-flow stress. Employers dealing with a distracted, less productive and less healthy workforce are “co-sufferers” of this along with the financially stressed employees and their families.
So, back to the original thought of self-driving money. APIs such as SPENDiD are a giant step toward that goal. It’s kind of like bowling with the rails up on the sides to prevent gutter-balls… you’re not guaranteed a strike, but you’re WAY closer to a better score than using the “traditional” approach of an unaided toss down the alley. When it comes to your money, who wouldn’t want the rails up?