Sally:
Marc, were you ever that dud mate who never pays anybody back after a group dinner?
Marc:
No, I'm the one that worries excessively about paying back on time. And it's like, oh my god, I need to pay back. Before we even finish the meal, you know, that's me.
Sally:
I feel like I know sort of those and that will pay and then does the awkward "Hey, I'm just checking. Did you send the money?". You just want to make sure that, you know, my bank, like statement isn't, you know, like, lagging, all the time. Make some shitty excuse.
Marc:
There was a bank. Just checking that the payment came through.
Sally:
Pay me my damn money. Well, there is an app for that. And today, yeah, today on Pocket Money, we're talking about the Finch, which is the FinTech startup that launched around July 2017. And it's been described as the finance app for your social life.
Marc:
Yeah, that's right. And you can also use finish to track and learn about how you spend your money.
Sally:
Which is always fun and scary.
Marc:
Yeah, it's informative, but also white knuckle.
Sally:
Finch scored the best personal finance app award at the 2018 Finder Awards. And this year Finch's co-founder, Shahirah Gardner won the award for the most innovative person.
Marc:
Yeah, well done.
Sally:
At the applause. Yeah.
Marc:
Crowd crowd sounds. But yeah, so it's a chat all about Finch and what the future of personal finance will look like. We're speaking with Jessica Box, the marketing director for Finch and managing director for Girls in Tech Australia.
Sally:
So if you're one of those peeps, who owes every single one of your friend's money or you just want a better picture of how much money you spend on fried chicken every weekend, listen on. This one's for you.
Marc:
You had me at chicken
Sally:
Welcome to Pocket Money. Jess, thanks so much for your joining us today.
Jess:
Thanks so much for inviting me. I'm very excited to have a chat with you guys about Finch.
Sally:
Let's start from the beginning. How did you know, Finch come about and what's the problem that it's trying to solve?
Jess:
Yes a globally paying friends back has really never been easy. Shahirah Gardner and Toby Gardner who are the co-founders of Finch, they spent quite a lot of time in the US for maybe five years and frequently used Venmo, for paying friends and didn't need BSB or account numbers, transferring money between different accounts and all those barriers that we know that exists? So when they returned to Australia, they realised there was a huge gap in the market here and opportunity to provide friends and millennials in particular with an easy way to get paid back as well as taking the hassle and awkwardness out of reminding your friends. I think we would all agree a classic Australian culture and the stereotype is never to mention money. And I know I've fallen victim into IOUs that have never made their way back and we've also never forgotten about it. I think I remember back to a time when I paid for tickets and accommodation for a music festival nearly eight years ago and I never got paid back for part of it.
Sally:
You should be sending them something on Finch, stat.
Jess:
I know, maybe eight years ago, a bit of a reminder wouldn't have gone astray. Yeah, I think I still remember the festival ticket or at least part of the festival ticket they set off. I'll you know, I'll send you $50 after payday, which, you know, payday comes and goes and never got the money back, unfortunately.
Sally:
Oh, my God, you should hit them up with interest.
Marc:
That's now worth $10,000. Hopefully, if the listener is listening, pay Jessica back.
Jess:
Really the Finch app was created to solve this problem taking the awkwardness out. And our award-winning financial app for your social app enables people to run group tabs, get paid back easily and see all your spending insights in one platform.
Marc:
Yeah, so let's quickly delve into each of those features of the app. So let's start with split payments. And just talk us through how that works.
Jess:
So we call that pay and request. And as Finch is a digital wallet, what that means is that customers have all that social spending money in one place. So when someone needs to be paid back, the app automatically draws from existing funds before having to go to the other accounts. So you can have a pool of funds held within the wallet makes it easy to transact between friends. So paying request is where you can make a one-time payment or request from friends up to 50 people at the same time. And in the case of what I was describing, where it's awkward to remind people think takes all that hassle out by just tapping on a remind button anytime you need to kind of push that notification to your friends and ensure you get paid back.
Marc:
That's a very useful feature. What about a Finch sites? Tell us about Finch sites and how that works?
Jess:
Yeah, so spending was kind of created as an area in the app where you can split payments directly from your bank feed and see where your money is going. And what that means is you can pull all your bank transactions into Finch, get insights on your guilty pleasures last I say for example, I'm an absolute stickler for delivery. Anytime I pop into the app I can see my guilty pleasures how many times I've bought deliver in the in the last 30 days. So you get insights on where you're spending the most all around your social behaviour. And then also enables you to split those transactions with your friends after the fact from your bank feed, which is by a Finch link.
Marc:
Yeah, tell us about Finch link and what that actually is.
Jess:
So personally, this is my favourite feature because I'm really bad at splitting money at point of transaction. So when you're out for dinner, you don't want to have to remind people at that point in time how much they've spent, you just kind of grabbed the bill and then when it comes through in your bank transaction, you can split it afterwards. So we also have groups which is actually our number one feature between housemates, travellers, friends and what that means is you can have a running tab of your spending so say for example, I would really close group of friends, we like to go out for brunch, look, any of us can actually just drop that straight into the group from our bank feed after the fact.
Sally:
Yeah, and I can imagine that feature would be especially helpful if you are, you know, living in a share house and you do have. Yeah, like those ongoing payments, you know, then having to chase up your housemates for the Internet bill or whatever, every month.
Jess:
Yeah, exactly. And what what we find people do instead of it being the one-time payment request, where you get the money instantly, for households in particular, someone might, you know, grab the milk every now and then what you end up splitting is like 50 cents a show, someone else will pay for the rent, and they often run legends. So more often than not people don't settle up within that group, but rather they'll just kind of manoeuvring around on whoever takes the bill from each different area, whether it's utilities, booze, food, etc.
Sally:
You mentioned earlier as well that a lot of these features catered towards younger people and that that's kind of these needs and wants were seen as a gap in the market, especially for young Australians. And we love the confessions of a flatmate campaign. It was so funny and just take me and I hit a little too close to home. When you're looking at especially young people in Australia, what is it that the users really need and want out of Finch and other personal finance apps like it?
Jess:
Yeah. So our vision at Finch is to be the place millennials grow to for their financial left. So we've started today where it matters most to them around discretionary spending and financial habits that we've been talking about, but our goal is to move with them as they grow over time and then priorities inevitably change. As we're all aware of them banking is hanging away in full force January 2020. And millennials will have more choice than ever before on their financial services and where they come from. So because of this, we focus on understanding the behaviours and creating personalised experiences for our customers, all the financial experiences, you know, after really social so we want our customers to enable that experience whether they use emojis which we see a lot of within our app and we enable through a lot of different features. I'm asked across our social content as well as you would have seen in the flatmates campaign that we went with earlier this year. And I'm sure that you know, with so many users, you can say, you know, a lot of interesting Finch sites, what are some of the vices that young people just Finch uses in general spending their money on in 2019? It's really funny, you know, when we actually did the confessions of a flatmate campaign, we ended up going through all the different transaction references that people put in for all of their bills, and KFC and fried chicken was always popped up or any sort of meat sounds really funny but people actually would have reference whatever it is that they've shared as it as a meal maybe and then everywhere through to you know, the usual things drinks or different versions of through bar rooms, car ride and the emojis that go with it and where we love watching that and we add that all up and categorise it and the greatest part is that you know, when people are seeing those transactions come through into their Finch sites, and they also start building awareness and a little bit of financial literacy around where their money is going across those different areas and starting to, you know, think about where they should be cutting back.
Marc:
Seeing where you're spending your money is just such a key tool. It's so simple, but seeing that all laid out, really makes you wonder whether or not you should be spending so much on fried chicken, doughnuts. Insert food here.
Jess:
Yeah, and I guess that's where we kind of focus on the behavioural side is this awareness without it being such a, you need to turn this off right now, but starting to build that financial understanding of where your money's going in a fun and social way and in the sort of financial world with which our customers live. They can easily kind of make that decision to turn it on and off pretty easily. It doesn't affect their kind of day-to-day life. And I think eating out and ride sharing is I feel like from my own personal experience, it's definitely something that I spend too much money on and I know a lot of people our age do but were there are there any like super wild or out there insights that you're like, oh wow, I didn't realise that people would be so spending so much money on stuff like this in our top 10 we actually have calls Willie's in 7–Eleven. So, whoa, you know, millennials are spending lots of money on these ride share and home free delivery services. They're also still going out and buying food from supermarkets. So the behaviours we're seeing and probably both so maybe during the week customers are going and doing their food shopping but then on the weekends, they kind of slip into the habits of ordering food or post kind of going out for drinks, staying at home witnessing that hangover and then coming back on a Monday and looking at their finances going oh maybe I should stop shopping at least closing stopping by 7–Eleven for my $2 coffee.
Sally:
Sounds about right. Going into the week with all the good intentions when you go to Willie's getting the meal prep.
Marc:
Jessica, how does Finch make money?
Jess:
We actually currently fully free. So our app is all about building kind of the awareness for our customers on their financial profiles and understanding. And then over time, our goal is to, as I mentioned before, move with our customers and what personalise our experiences to them. And whether that is at the point in time when they're ready to buy home. We're partnering up with, you know, service providers who allow that or lending or for our cohort of customers who housemates rental bonds, etc. So, we're moving in that direction at the moment. So we have some exciting things to announce in the coming months. So in that space, but right now we're fully free. Now that's really cool. It's almost like moving into the affiliate marketing sort of space. But yeah, making it easier for people to to transition into those other stages in the life. Yeah, exactly. And I think that ties in to Finch XP and Finch period which is out brought a business roadmap. So our goal is really to enable customers the ease of transacting, however and whenever they want across merchants and then move in the US, which I mentioned before enables, I think it's a million merchants now across the US, for customers to be able to pay with them or as a payment method across the whole of the country. So we've implemented that with our first mentioned Eat Club last month, which is really exciting and you're able to pay with Finch as a payment method. And what that means is any French customer who signs up to Eat Club orders takeaway food within the app, they can actually pay with their Finch wallet and split the bill with their friends after the fact in friendship. So that's our first matchup but we're looking to expand that out and obviously grow and enable our customers that seamless experience across not just their finance world in chat but then all across this ending world as well.
Sally:
Nice. We want to chat a little bit more about Finch pay later, but it's favourite part of the episode time to jump in overrated versus underrated. So basically we'll give you a topic or I guess a word and you can tell us if it's overrated or underrated.
Marc:
And you can also tell us why if you like as well.
Sally:
So jumping in first with carrying cash overrated or underrated?
Jess:
For sure. I personally moved to a fully digital operating model. Over the last year and a bit I passed my phone into the trap of life not having any card on me and then not not even cash card, stepped it even further down the track of not having anything physical. And I think what that does is enables totally frictionless experience. You just have one device and you're able to kind of go about your day-to-day pretty easily.
Marc:
I definitely agree with that. Okay, Australia's tech startup scene, overrated or underrated?
Jess:
I think underrated particularly in Melbourne, which is where I'm based, there's this kind of undercurrent of ambition, drive and passion and officer high performance culture that's coming out of the scene. And I think we're on the cusp of a few key moments and tipping points and talking specifically about fintech and the startup ecosystem in this space. With the rise of open banking and the Royal Commission. There's so many opportunities for fintech and startups to collaborate with each other and with corporates to really change the game in this space and do something that hasn't been done for, you know, the last 50 years.
Sally:
Next one a little bit controversial Sydney or Melbourne? Which one's overrated?
Jess:
Which I do have really just kind of dug my whole way that went by saying where I was from. I've been passing over Sydney, so I need to explain why. Of course, personally, I'm a real ops coach. And coffee person. I haven't experienced the level with rich Melbourne scott that vibe in Sydney. So that's, that's personally why I love Melbourne. I also think there's kind of a more laid-back culture in Melbourne I would say, compared to Sydney, which is kind of have its kind of positives and negatives as well. I think when I walk into Sydney, it's, you know, key drive ambition that I was mentioning before so exists in Melbourne, but people go about it in a more laid-back way.
Sally:
I think we'd have to agree with that. Really? Yeah, I think I know a lot of people that live in Sydney that would still say Melbourne. Yeah.
Marc:
Okay. Sheryl Sandberg book Lean In?
Jess:
Ah, that's a good one. A lot of what she covers in there around leadership and how you go about work that I really resonate with, and I would recommend it to anyone and I actually bought it for one of our team members not that long ago is to read as we're going through this series, a period of time which is a lot of flux in it in a company's history and prepping for off the series with some of the things that she highlights and Lean In, which is great. What about big data?
Jess:
Big data? So in what context?
Sally:
Well, it's in quotations. Yeah, I'm thinking of it more as the buzz word.
Jess:
Overrated or underrated. Um, so I would say the buzz word is overrated. But data in general is underrated. And I think particularly in finance, when we look at how important data is and the quality of data that the banks are putting out, you look at your bank fade and transactions and something that Finch is aiming to solve by kind of removing that gobbledygook across your transaction history. That's, you know, the simple first step where we can start and cleaning out that data so people actually understand that transactions. So when we say big data in the sense of the doom and gloom would then maybe or greater, but the underrated thing is the small steps we can take to make it customer experiences better by using and cleaning data in a way that creates, you know, meaningful outcomes.
Marc:
Besides the finch, what's the most underrated bird?
Jess:
This is a little bit controversial. I don't know, because some people don't classify them as a bird, but I would say the emu.
Sally:
I think so they're not always classified as a bird then that definitely, that definitely puts them in that category.
Marc:
Great. That's a great choice.
Jess:
I think people get scared of them as well. They kind of look a bit intimidating, but they're really friendly in the message.
Sally:
And this isn't really an overrated or underrated, but just something to finish it off. What's your most embarrassing Finch site?
Jess:
I know exactly what it is. And it is really embarrassing. It's Afterpay.
Sally:
I think a lot of people would fall into that basket to be honest.
Jess:
Yeah, I think it works quite well. When you I mean, I will say I've never had a late go. But I think when you get paid monthly or when, however, your pay cycle works, if it's all lined up with that, it's kinda convenient because I know your kind of your ins and outs happening on the same day.
Sally:
Yeah, exactly. As long as you pay it off every month, then yeah, it can be a simple way to free up your cash flow. Exactly.
Marc:
Great. Well, thanks for participating in our overrated and underrated segment, Jessica.
Jess:
No worries, hopefully I didn't really, you know, disclose too much information there.
Sally:
With open banking coming up in, you know, January early next year, what do you think the biggest changes will be for, for this space, especially looking at the consumer side of things and what we can expect?
Jess:
You know, what, I think we talking about it a lot as businesses, but customer awareness is actually quite low. I think there's going to be a pace around actually building an understanding within customers to enable them to have the value that will come from open banking. So I think I was reading a report from JVM consultants that said a very low percentage of customers were aware of what open banking means and how they could take advantage of it. So I guess the first exercise is enabling customers to understand what that means outside of the core banking institutions that have been accustomed to dealing with to the financial life so far.
Sally:
Yeah, awareness is definitely key in that area, I think. Nice. Well, thank you so much for taking the time to chat all things Finch. We've had a great time and learned a lot along the way.
Jess:
No worries.
Thanks for listening to Pocket Money from Finder. Head over to finder.com.au/podcast for the show notes for this episode. The Finder podcast is intended to provide you with tips, tools and strategies that will help you make better decisions. Although we're licensed in authorised we don't provide financial advice. So please consider your own situation or get advice before making any decisions. Based on anything in our show, thanks for listening.
