In the face of the current economic crisis facing mass consumers, the inclusiveness and equality that digital finance confers on is an important role in alleviating financial stress. This article is from the WeChat public account: Silicon Rabbit Race (ID: sv_race), author: Lexie, editor: Lu, the original title: "The United States inflation is the highest in 40 years, these technology companies are determined to help consumers save money", the head picture is from: Visual China
Entering 2022, the number of new coronavirus cases around the world has continued to decline for several consecutive weeks, and the epidemic seems to have finally bowed its head, but the economic impact it has brought has persisted.
With the blockade of major production areas in Asia and the suspension of international transportation, the supply is in serious shortage, the already existing chip crisis has further deteriorated, the oil production of major oil producing countries has not yet recovered, and international oil prices remain high. In the face of round after round of epidemic shocks, governments have adopted emergency measures such as subsidies to residents, issued a large number of additional currencies, the Federal Reserve not only lowered interest rates but also continued to buy bonds, government subsidies plus rising wages coupled with the stock market boom, and the income of American households has increased significantly. When society opened up, people began to "retaliate against consumption", coupled with various factors to trigger inflation.
Inflation in the United States has reached a new high in 40 years, and the rate of price increase in Europe has reached a record high, the annual inflation rate in the United Kingdom reached 5.4% in December last year, the highest in 30 years, Prices in Canada have risen twice as fast as before the epidemic, and prices in Japan have been relatively stable after the bubble economy in the 80s, but at the beginning of this year, the central bank proposed inflation risk forecasts for the first time in 8 years.
In the context of the global inflation crisis, the money in the hands of consumers is becoming less and less valuable, and the financial technology that has helped consumers invest, save money and repay loans in the past two years can actually play an important role in helping consumers get through this "hot" stage.
Truebill: No longer ignorant to be deducted
During the period of price rise, we should tighten the belt and cut less hands, everyone understands, how to track each consumption is not simple, from where to cut is also a problem. Truebill is one such company that can help you better control your personal finances, the main function of this app is to track all the user's subscription services and provide a simple way to cancel the subscription, for mobile phone and TV subscription services can also help you negotiate discounts and low prices.
Image credit: KnowTechie
Recently, the app has also added more functions to achieve the goal of becoming a "financial secret" for users, such as analyzing consumption, formulating monthly expenditure budgets and tracking through the app, timely "cliff relegation", or directly viewing credit history reports.
Truebill also has a savings function, which can analyze the user's account situation to store idle money, and the latest feature is a comprehensive wealth management, which collects wealth data scattered across various places, allowing users to manage assets and liabilities in one interface.
Several of the features truebill offers are actually being done by companies, such as a new tool launched by doNotPay, a digital lawyer for legal technology, so that people can enjoy the free trial version of the service without worrying about being deducted when the trial expires.
There is also Acorns, known as the American balance treasure, is very friendly to invest in Xiaobai, depositing a fraction of each transaction into your account, and also supports regular monthly investments, although each one is a small amount of money, but the accumulation of time to check the account will make people have a sense of happiness of finding money in the pocket of old clothes.
Image credit: Yahoo Finance
Truebill, on the other hand, combines these decentralized functions and becomes a necessary tool for mass consumers to comprehensively improve the health of the economy in such an economic environment, and its growth is also very rapid, with the number of users rising from 1 million at the end of 2020 to 2 million in 2021.
Truebill completed a $17 million Series C funding round led by Bessemer Venture Partners in November 2020 and then closed a $45 million Series D funding round led by Accel last June, valuing it at $53 million, and late last year, Rocket Companies, the largest U.S. real estate mortgage company, acquired Truebill for nearly $1.3 billion.
Nous from London also wants to be a dashboard for consumers to save money on a daily basis, offering free customized spending reports for each household, explaining how rising prices are affecting their cost of living, and providing advice on how to rationally reduce expenses in all aspects.
In the UK, inflation is growing so fast that it is not only a 30-year high, but the energy price cap will expire in April this year, when household bills will grow by a further 50%!
Image source: Nous
Nous' bill management includes daily expenses in multiple areas such as energy, insurance, mortgages, subscription services, etc., monitoring expenses while also warning which expenditures should be tightened, and consumers who use this subscription service are expected to save more than 1,000 pounds a year for their families. What it wants to change is the weak situation that consumers have always been in, phone bills, car insurance, streaming services...
Automatic payment every month is easy, but unless you are a super person who can check your accounts every day, it is easy to be deducted from the excess fees without accident, and in the environment of inflation, the total amount of daily expenses will be much higher than consumers expect.
In the future, What Nous wants to build is to build models through the first-hand financial data of multiple households and the data shared by third-party suppliers, and use the business model of savings-as-a-(subscription)-service to help thousands of families provide automated management services to protect consumers from speculative price increases and user loyalty premiums from suppliers.
Just in February this year, Nous completed a $9 million seed round led by British early investment firm Mosaic, followed by a number of angel investors in the fintech field, such as Marc Warner of Faculty.ai, Dan Hegarty of Habito, and Eamon Jubbawy of Onfido.
Mos: From scholarships to student banks
In this economic environment, the life of the student population is even more difficult, the College Board data shows that the annual tuition fees of public universities are about 22,600 to 39,500 US dollars, and the tuition fees of private universities have risen to 5.1 to 6 US dollars, almost 4.6 times the inflation rate, and the money in hand has depreciated, and it is more difficult to repay student loans.
Mos, an educational technology startup founded by human rights activist Amira Yahyaoui, initially aimed to help students apply for scholarships. Every year, student loans in the United States have exceeded $1.5 trillion, but there are still more than 1 million students who are eligible but do not apply for assistance each year, private student loans can change a student's life, Mos wants students to no longer need to spend time and energy to find and apply for these resources, no longer bear heavy debt pressure, since its establishment in 2017, Mos has provided students with more than $160 billion in financial assistance, helping about 400,000 students.
In addition to scholarship applications, Mos has also launched a series of guidelines to help students cope with the pandemic, for those who have paid tuition but cannot attend classes, have been evicted from rented housing, and have been told to wait indefinitely for admission and funding decisions, Mos has drawn on the help of experts in the financial and educational fields to create a series of email and letter templates that students can use directly to appeals such as housing applications and deferred payments.
Image credit: TechCrunch
Mos completed a $13.3 million Series A funding round led by Sequoia Capital in May 2020, and a $40 million Series B funding round led by Tiger Global Management in February this year, with sequoia, Lux Capital, Emerson Collective and Plural VC, with a valuation of $400 million. Yahyaoui said she turned down a lot of investors, not even deck...
Tiger's focus on this round is not only the development of Mos EdTech, but also because in this year Mos said that it is transforming into a challenger bank, the main functions of the debit card it launched include no overdraft fees, late payment, ATM withdrawal fees, and no minimum balance account opening requirements, in line with the use habits of the student party.
Yahyaoui's ideal is very ambitious, she wants to do not only a few people can use the app, but to become the mainstream bank in the US market, students are only its entry point, this angle is very reasonable, over the years Mos through scholarships to gain the trust of the student group, with this group of graduation, rent, loan, Mos community-based product features will be naturally accepted, user stickiness is also very strong, the future Mos intends to add a series of paid features, For example, hand-in-hand financial advisors and comprehensive banking functions, etc.
There are also more and more companies that focus on students in the fintech space, such as Stride Funding, which offers flexible student loan options, which, unlike a single fixed payment, increases and decreases with student income, so payments are always affordable; LeverEdge (now renamed Juno) adopts a group bargaining model rather than focusing on individuals, so it can get better discounts.
Founded by Deepak Rao and Siddharth Batra, who have worked on Twitter, Thrive Cash provides loan opportunities through a student's offer, an internship offer can unlock 25% of the internship salary as the loan amount, a full-time job offer can unlock 25% of the first three months' salary, compared to a regular student loan, a Thrive loan can pay for study abroad tickets, credit cards, moving and other living expenses, etc. This is even more precious for low-income students, a group of people who are often denied loans, PayPal and the founder of Afrim Max Levchin and former Twitter COO Adam Bain have participated.
JPMorgan Chase, which acquired Frank, the university's financial planning platform last year, has helped 5 million students in more than 6,000 colleges and universities with online tools that help students find and apply for financial aid opportunities, get course discounts, and target the best scholarship programs.
The new digital bank: low threshold & low fee
During the pandemic, as our work and life became remote, consumers reduced physical payments and began to accept electronic contactless payments on a large scale, thus also driving the public's acceptance of new digital banks, Plaid's survey showed that compared to the pre-epidemic use of financial technology for financial management, 56% of the respondents because of the use of these digital services, they have survived the economic crisis between the epidemic.
Among them, the new digital banks have played an important role in alleviating the pressure of inflation, not only simplifying financial services such as credit, payments and savings that have not been digitized for many years through technological means, but also helping consumers save daily expenses in a low-threshold way.
For example, Chime, the most expensive challenger bank in the United States, has quickly become popular by creating a new banking model, which does not rely on fees or profit from the misfortunes and mistakes of users, its debit cards, expenditure accounts and savings accounts are completely free, there is no minimum balance requirement, handling fee, monthly fee, ATM transaction fee, there is no overdraft situation and therefore no corresponding fee.
At the same time, it also opens up functions such as early arrival of salaries, automatic deposit of part of wages into savings accounts, bank overdraft alternative Spot Me, credit card credit card credit card to help users improve their credit history, and the rounding savings function done by Acorns mentioned above Chime is also doing, Chime just completed by Sequoia Capital Global last August Equities led the $750 million investment, valued at about $40 billion.
Vharao, who wants to be a financial patagonia, is the first U.S. modern bank to receive a National Bank Charter from the Office of the Comptroller of the Currency (OCC), as well as approval from the Federal Deposit Insurance Corporation (FDIC).
Its vision is to become a new digital bank that contemporary American consumers love for, fully digital and social mission, with major financial accounts that do not require a minimum balance, no monthly fees, higher interest on savings accounts, and a host of technology-enabled features such as the Voro Advance credit card, which allows users to quickly access about $100 or so in cash emergencies and numerous cashback discounts, and Voro Believe. A project that can help users quickly establish an excellent credit record, the deposit is flexible, no handling fee, and the number of users has exceeded 4 million.
Varo completed a $510 million Series E funding round led by Lone Pine Capital in September, valuing it at $2.5 billion, just seven months after completing a $63 million funding round led by NBA star Russell Westbrook, who also joined the company as a consultant for financial support programs for low-income minorities.
Image source: Youth Apps
In the face of the current economic crisis faced by mass consumers, the inclusiveness and equality of digital finance have an important role in alleviating financial stress, plaid data shows that consumers using financial technology can save an average of $360 per week on bank fees and interest, saving 4 hours of time.
Rising prices and the rapid growth of these digital banks will once again hit the spotlight on the vulnerable groups, in the United States, the most developed part of the global economic system, 20% of consumers still can not have complete and high-quality financial services, so it is common to be charged a variety of fees, Oliver Wyman survey shows that the united States rely on the moonlight family to live on consumers, pay an annual overdraft fee of $17 billion, Discrimination in financial services has made it harder for them to overcome the current economic crisis.
This is even more acute for ethnic minorities, who in the early days of the pandemic were unable to access the government's Paycheck Protection Program for small businesses and low-income groups because they were not close to large banks, but many fintech companies were very quick to lock in money to help those in need.
A New York University survey showed that fintech companies completed a total of 840,000 loans through PPP programs in 2020, with most of that money going to the African-American population, a much higher percentage than traditional banks.
Traditional banking service providers are also rapidly undergoing digital transformation in such an environment, absorbing the advantages of fintech in terms of lowering the threshold and increasing convenience, and with these changes, we will see a more connected and digital financial environment, where consumers can enjoy the convenience of digital innovation from account opening to use to long-term benefits.
Financial services are also more inclusive of a wide range of groups, and from a provider's perspective, serving a wider range of people will become cheaper and less risky, not only in the current inflation crisis, but also in the future our financial system will be able to face any black swan-like economic crisis more tenaciously and sustainably.
Resources:
1.Truebill raises $45 million for its personal finance app （TechCrunch）
2.This UK startup got $9M so you’ll pay it to shrink your household bills（TechCrunch）
3.Amira Yahyaoui wants Mos to be a ‘radical’ fintech startup（TechCrunch）
4.Digital tools can protect consumers from inflation. Here's how (World Economic Forum)
This article is from the WeChat public account: Silicon Rabbit Race (ID: sv_race), author: Lexie
This content is the author's independent view and does not represent the position of Tiger Sniff. Unauthorized reproduction is not permitted, please contact [email protected] for authorization matters
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