Managing your finances. The very thought of it makes many of us want to stick our head in the sand until next pay day. Unfortunately, ignorance in the field of money management is not bliss. Especially when you want to achieve life milestones, like purchasing your first home or escaping corporate groundhog day to start your own business. And while disruptor banks like Virgin Money are trying to educate customers on better saving habits through humour, with their Three Minute Money series, some clever entrepreneurs are finding ways to help us achieve financial literacy sooner through the use of mobile technology. Search ‘personal finance’ in the App store, and you’ll find dozens of clever apps wanting to aggregate your financial data and tell you what you should, or more importantly shouldn’t be spending on. It’s the start of a personal financial management revolution that is reshaping our engagement with our bank accounts, and much of it is being driven by fintech entrepreneurs, rather than their predecessors, the banks.
Fintonic – a Spanish success story
Riding the wave of the Personal Financial Management boom, or PFM as it is known in the fintech and banking space, is Spanish startup Fintonic. Born out of the 2008 global economic downturn, Fintonic’s goal has been, quite simply, to help Spanish consumers better manage their finances. Allowing customers to aggregate their multiple bank feeds and transaction history into one central location has enabled hundreds of thousands of Spaniards to suddenly get a ‘big-picture’ understanding of their finances. Tracking expenses, identifying bad spending habits and real time alerts on their balances are all ways Fintonic is helping consumers regain control over their finances.
Post GFC courage the key to Fintonic’s launch
It took a brave entrepreneur with significant vision to take on the Spanish market post 2008. While others licked their wounds, in typical entrepreneur fashion, Sergio Chalbaud, Fintonic’s founder, saw a silver lining in the post GFC economy. “Downturn times are usually when the biggest opportunities arise, since it is a time when the existing status quo is challenged and the global mindset is more open to new ideas, products and services.,” Chalbaud says, looking back. “At the same time, it can be a difficult time to raise capital. We were fortunate, as we had the capability to put our own money through that first phase of proof of concept and capitalise on its success to raise further capital.”
Now surrounded by a team of 35, Chalbaud’s initial experience in the financial sector, building high growth companies plus 9 years of banking experience, were indispensable in the early days. Prior to creating Fintonic, Chalbaud founded IDEON, a technology and consulting firm specialising in the development of innovative financial services solutions. On top of that, he holds an MBA from the University of Chicago Booth School of Business, is a Chartered Financial Analyst (CFA) and a certified Financial Risk Manager (FRM). All expertise he has funnelled into Fintonic to the benefit of Spanish consumers.
Fintonic takes cues from classical psychology
In many ways, the concepts behind Fintonic are very much in line with the time-tested four stages of competence model. To begin with, Fintonic users generally start out in the Unconscious Incompetence phase, unaware that they don’t know how to do something, like budget, or even how to save. Suddenly, with knowledge at their fingertips via the app, they enter into the Conscious Incompetence phase, aware of the unnecessary expenses they are incurring through clever infographics and colour coded expense itemisation. The problem is, they’re not really sure yet how to curb their unhealthy spending behaviour. That’s when the hard part kicks in, or what is known in psychology as the Consciously Competent phase – actively curbing what you spend through hard graft. However Fintonic is there to support them all the way. By taking spending history into account, Fintonic helps users understand where they can start curbing expenses. Yes, they still have to do the hard yards in refraining from impulse purchases or dining out less frequently, but at least they know what expenses in particular are responsible for eating away at their income, literally. Finally, Fintonic aims to free users from budgeting by helping them reach level four – Unconscious Competence. Ultimate financial literacy comes from knowing how to manage your money without the headaches of spreadsheets and constant account balance checks.
Well placed bet on the future of financial services
There’s no question that the nature of financial advice is changing dramatically. The rise of roboadvisors is disrupting and threatening to all but cause the extinction of financial planners as we know them. And while services like Fintonic only touch the edges of the financial advisory sector, there is no doubt they are outputs of the same trend – the ability for consumers, from all walks of life, to leverage cheap technology to in order to get ahead. While once we only turned to the internet purely to consume information and to compare goods and services, we soon moved to feeling comfortable in purchasing those goods online. Now we are embracing clever cloud based technologies that offer personal recommendations on what products we should purchase, or services we should use based entirely on our own data. Fintonic’s financial wellness application is the harbinger of a range of personalised services we’ll turn to in the future to better manage our lives.
The company also has global ambitions, states Chalbaud. “When we designed Fintonic’s growth strategy, we decided that we wanted to be the first cross-border personal finance management app in the world.” And they certainly seem to be making inroads with their stated strategy, launching in the South American market just this year, a typically underserved market when it comes to PFM services. Time will tell if Fintonic can extend past it’s latin roots, but with over 350,000 users, multiple global bank partnerships and happy users, the future certainly looks bright.
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