Are traditional banking services just table stakes in the digital age?

Digital banking startups like Cogni, a New York-based firm that wants to be a one-stop shop for “lifestyle banking,” are counting on curation of such features as personal financial management tools doing the heavy lifting. The company takes such services as fast account opening, low fees and access to a large ATM network almost as givens across the industry.

Joseph Loren, Head of Product for Cogni, told Bank Innovation the company’s main differentiators are the flexibility of its native platform and a design focus on user experience.

“If you’re familiar with WeChat and Paytm, these super apps of the eastern world, well, the U.S. hasn’t had one yet,” he said. “What we’re building here is a massive platform with a number of different microservices.”

Loren, formerly a senior manager for digital project innovation at American Express, said a little tidying up can go a long way, as a one-stop shop platform allows users to do their buying and saving in the same place.

“We want to reduce the options for people,” he said. “There’s thousands and thousands of apps, that do so many different things. Our job is to curate and vet the ones that do the best job and plug them in on the back-end as an open API.”

Cogni’s prime target? The 18-25 demographic.

Bank Innovation previously reported that Millennials are choosier than older generations about which apps they give screen space, as 54% have all their apps accessible on the first two screens of their phones, compared with 37% of Baby Boomers, according to Comscore’s 2017 mobile app usage report.

Loren said one thing Cogni has learned about the millennial demographic is that it’s “scared of big numbers.”

“Saving makes it seem like they’re losing their money,” he said. “So, we’re rewiring thinking around saving. Instead of looking at $2,000 leaving your account, we’re letting a user put a percentage in to pull from their paycheck. Out of sight, out of mind.”

He said because all funds will be held in just one account, users won’t have to make an actual transfer to their savings area. “It’s just an optical organizational method, so we believe that will help people start saving more and more,” he added.

Other features include an aggressive cash back program (up to 12% at certain merchants) and an invoicing tool geared toward gig economy workers to help with tagging their purchases for business expenses and taxes, as well as receipt capture.

Designing the user experience for Cogni’s app has relied on survey results, past research from Loren’s other work experiences, current research, and interviews with user groups (mostly school students who have tested the product).

Asked if Cogni wants to help users develop priorities or simply take direction, Loren said something he thinks about every day is “how to not force things upon them.”

For instance, he said users can choose to tag transactions from certain merchants such as a bar they frequent, or a video game store, or ride-sharing service, and have the app track that spending and provide recommendations based on the user’s financial goals.

“We want to give them the tool to tell them they’re doing a bad job instead of being their older brother saying, ‘Don’t do that,'” he said. “No one wants to listen. It’s getting them to tell themselves and to come to their own conclusion.”

Rather than pursuing its own bank charter, Cogni has a banking partner for the time being, Loren said. “We will have our own, in a number of years, but for launch that doesn’t make sense,” he added.

Cogni will make money on partnerships with companies that are offering products and services to its customers, also earning a percentage per swipe on purchases. The company closed a $1.7 million seed funding round in November and is seeking Series A funding as it prepares for a full launch, potentially by this summer.

Loren said he considers Cogni more of a tech company than a bank and more of a collaborator than a competitor with banks. Asked who he considers Cogni’s main competitors to be, he replied Apple and mobile bank Chime (and potentially Amazon).

“It’s now a race to be one of these massive platforms,” he said. “Everyone wants to be the one-stop shop. Capturing the data, personalizing with the data, and cross-selling other products and services to the user.”