JJ Hornblass 0:26
Hi, I’m JJ Hornblass and welcome to FinTech unfiltered, from Bank Innovation, the leading news student service for the banking and FinTech industry. This is our weekly wrap for what’s happening in banking innovation this week. Before beginning I want to thank the bank innovation advertisers, Acuant, Biz2Credit, Fiserv and Snowflake for their support. And I’m pleased to be joined by Bianca Chan from the bank innovation news team. Welcome Bianca. It is Friday, January 8 2021. Of course, yesterday it was marked stained is probably the better word for it by the violent insurrection and raid on the Capitol by loyalists to President Trump today. Democrats called for Trump’s removal and some Trump cabinet members quit the government. Despite the violence, the Congress certified the electoral college college victory last night of Joe Biden and Kamala Harris, this took place in the wake of the Democratic Party taking control of the Senate, after both its candidates won runoff elections in Georgia this week. Also in the news, jobless claims held nearly steady at 787,000. And finally, the foreign trade gap for goods in November was the highest on record going back to 1992. The overall deficit for goods and services expand at a seasonally adjusted rate of 8% from October to the highest level since August 2006. And this was According to the Commerce Department on Wednesday, the data reflects that consumers demand for imports outpaced global demand for US exports in the banking innovation industry, green dot yesterday unveiled its go to bank, which is a new mobile banking app that spurred the company to have to invest heavily in automation functionality during its development. Bianca will tell us a little bit about the automated aspects of go to bank and why it’s a significant new product launch.

Bianca Chan 3:16
Yeah, sure. So the green dawn incorporated a couple of existing automation tools, developed new automation tools for the app, and then also has some on the roadmap for this year as well. So starting with the the most most interesting or most unique that I actually heard of was the automated direct deposit functionality, which, which is basically facilitated by an open banking integration via plaid, which basically connects different payroll accounting software as what right within the go to bank app. So the user basically able to set up a direct deposit straight from there, rather than having to, you know, grab the routing and checking number from the bank and then go into your employer. Why is the payroll website. So it’s the whole idea of being able to do it all in one app. And it’s essentially with a single button after you select which payroll provider you use. So it’s pretty interesting

JJ Hornblass 4:17
today, so green dot sees this sort of reduced friction on direct deposit as be as potentially adding, like leading to greater deposit volumes.

Bianca Chan 4:29
Probably that’s what I had imagined. I imagined, we want to facilitate that to make it even easier for people. Because I believe that that’s a huge issue among challenger banks is not having the deposit growth. Because, you know, consumers typically trust the bigger household names, like the big banks in the country. green dots also investing heavily in natural language processing and chatbot capabilities. They didn’t say whether the the technology is being created in house or if it’s being supplied by a vendor But they’re currently training it to answer customer inquiries. And that should be rolling out later this year as well.

JJ Hornblass 5:08
Yeah, I mean, green dots an interesting. It’s an interesting company considering that it has had partnerships with Apple in the past. And, and so it’s good to, you know, keep an eye on what they’re developing. On the automation front. Is there a sense for like, what the, the range of capabilities might be for this customer service? chat bot?

Bianca Chan 5:37
No idea. But the the kind of where the golden standard is, I think within the industry is being able to have some sort of transactional capabilities. So not just like, your surface level, FAQ, but being able to tell the chat bot Hey, can I transfer this much money to my sister or something like that. And it’s interesting that you bring up green dots, you know, partnership with Apple, they also partnered with Amazon, Uber. They’re one of the newer names on the the roster of banks supporting the Googleplex accounts. So I think it’s quite interesting that they’re entering, you know, that they’ve now unveiled a second digital only bank brand, they still are maintaining their unlimited brand, which was launched, I think, in mid 2019. And so it’s kind of interesting, you, you know, from where we’ve seen major moves in the industries and the banking as a service space, which green.is already very well established in providing banking services for like stache and wealthfront. It’s interesting to me that they’re entering this really saturated challenger bank space, when they launched a product, I guess, two years, a year and a half ago now. And, you know, they’re, they’re going against really big names like chime, which, you know, has a 14 point 5 billion valuation, whereas go, green dot has, you know, 3 billion valuation. So it’s kind of interesting to see where their strategy is heading.

JJ Hornblass 7:11
Whom, why do you think they’re doing it,

Bianca Chan 7:14
maybe to diversify their offerings, maybe to make a greater name for themselves, like on the direct to consumer front? Since you know, they are on the back the back end of all the banking as a service partnerships, maybe they want to be more of a household name, but it’s unclear. I mean, if you ask me, I would want to be in the sandbox with like, Amazon, Uber, Apple, Google, and, you know, not on the challenger bank side,

JJ Hornblass 7:40
not on the front end. I mean, they’ve always been very brand oriented. Um, you know, went back when they were kind of like a stored value card. Company, I’m, I assume they still have that business. But you know, at one point, that was kind of the crux of their business. But you know, those were all brand oriented. And maybe they just, you know, they feel like they need to have a consumer driven brand as well. Maybe there’s just, you know, they have that expertise and want to put it to good use. Mm hmm.

Unknown Speaker 8:11
Yeah, potentially, we’ll see what what happens

JJ Hornblass 8:14
on the kind of similar to deposits, but kind of moving to the savings side, our developments at Chase. And you reported that chases auto save tool has really, really grown in adoption significantly. So total funds saved by users of the tool tripled year over year in 2020. And enrollment in autosave, grew by 77%. In November, compared to the year prior. These are probably off of relatively low baseline numbers, but still some significant adoption. What is autosave? And why are people using it to such a degree

Bianca Chan 9:16
autosave is a tool for customers to basically set goals and the goals can be different categories, like a general savings goal, or maybe you’re saving for a mortgage or there’s like, you know, saving for school or something. So you essentially establish a goal. And then you establish how much money you want to transfer from either your checking or a deposit into your savings account, and how frequently so I think it’s interesting because, you know, we hear a lot about the investment of automation on the financial institution side, but you question what the adoption is like and what the level of, I guess competence or comfort Ability it is with the consumers. And so I think it’s an interesting trend Chase is anticipating it to grow. I think the study that they that they released said something like 86% of the consumers surveyed said that they were going to continue to use it. I wonder why that 14% doesn’t want to. But it is, it is an interesting kind of consumer trend to see automated savings. I mean, it kind of harkens back to the whole idea of making, you know, engagement with your bank easier. And I guess this is sort of that set it and forget it mindset.

JJ Hornblass 10:36
I mean, is there a day off? Or does the tool offer a recommendation? Like you need to save x percentage of your paycheck every month type of thing?

Bianca Chan 10:48
That’s a really good question. I don’t think so. I don’t think so. But you know, Bank of America has an interesting product called lifeplan, which does do that sort of

JJ Hornblass 10:57
as a recommendation engine. Right. So, you know, this, the the auto, I mean, are they are they putting marketing dollars into autosave? How are they kind of spurring adoption? Or is this just kind of something that happens, you know, organically within, you know, digital banking, product usage?

Bianca Chan 11:22
I can’t say for sure, honestly, Alison beer, who’s the head of digital over at Chase, mentioned that the bank was investing heavily in automation. She mentioned real time payments, also was going to be another huge trend for 2021. But she didn’t really speak to the, if the bank is, you know, investing dollars into growing the product, or if it’s just growing organically.

JJ Hornblass 11:49
Today, did autosave? Did they build autosave? Or is this an application that they integrated, that was built by somebody else?

Bianca Chan 12:00
I would imagine that they built it. But again, she didn’t specify, so I can’t really say,

JJ Hornblass 12:07
all right, well, we’re gonna have to get her on here. Yeah. And I mean, I guess we, you know, between Chase and Bank of America, I mean, is it fair to say that you’re expecting more such kind of like, auto saving? automated, um, you know, retail applications coming out in financial services this year?

Bianca Chan 12:31
I think that would be a safe assumption, seeing as there is that consumer interest there, but you know, autosave, it’s not the the cape, I don’t know about autosave, specifically, but the functionality to automatically trigger money transfer from from one account to another account is not new. I mean, I think, my old bank that I used to have in Canada, I mean, I set that up, I set that up that same capability up like 1015 years ago, and snide. I don’t think it’s new, which is kind of interesting that, you know, it sounds like it’s, it’s starting to gain traction. Now. We’ll see.

JJ Hornblass 13:10
I think when you add, when you fold in a recommendation engine, where there’s an algorithm that’s kind of helping to make that decision, you know, I think that’s when it sort of crosses over into new territory. I mean, you’ve had on the commercial banking side, you know, sweep accounts, and the like, where it’ll flow money back and forth between interest bearing and non interest bearing accounts, on an overnight basis. I mean, those are, you know, long, they’ve been around for a long time. But, but it’s, it’s the application of, you know, predictive analytics that might make, you know, make my first of all, make the the applicate, the, the particular tools more valuable, and then also make the adoption spike even even greater. So

Bianca Chan 14:00
that’s what I would look for this. Definitely more complex, at least you’re adding in a whole other layer of technology on data that you need. So Correct.

JJ Hornblass 14:10
Correct. So Bianca, what do we have on tap for next week.

Bianca Chan 14:16
And next week, you can expect to see our next edition of five questions with. And we’ve also got some exciting news from Domino’s, on their engaged platform, which is basically the underlying technology to go to app, which is kind of interesting.

JJ Hornblass 14:34
Good. And we also are going to unveil some, some big news about bank innovation itself next week. We’re not going to delete that out right now, but stay tuned for that. In the meantime, please rate FinTech unfiltered on your podcast platform, and be sure to follow us on Twitter. on LinkedIn and and of course, visit us at Bank innovation dotnet. Thanks all for joining us. We’ll see you next time.