- JPMorgan announced the 5 fintech firms joining its Financial Solutions Lab, which is aimed at helping customers who are living paycheck to paycheck.
- Colleen Briggs, the head of community innovation at JPMorgan, said people who are ‘financially stressed’ are less likely to accept using financial tools with no human interaction.
The robot takeover in financial services is not imminent.
That’s the perspective of one executive at a big bank who says some customers might be willing to trade in the efficiency of using a financial tool backed by artificial intelligence for the comfort of dealing with a real person.
Colleen Briggs, the head of community innovation at JPMorgan Chase, told Business Insider in an interview that low income households aren’t as willing to use tools for managing money completely devoid of human interaction.
Briggs oversees the Financial Solutions Lab, which is run by the Center for Financial Services Innovation (CFSI) and JPMorgan and focuses on partnering with fintechs aimed at improving the financial health of consumers living paycheck to paycheck. On Tuesday, the CFSI and JPMorgan Chase announced the five companies it selected to join the lab.
In addition to being able to work with executives from CFSI and JPMorgan Chase, the five startups will also receive $US125,000 in capital. Since launching four years ago, the Financial Solutions Lab has worked with over 30 fintechs from a pool over over 1,600 applicants and raised over $US500 million in funding.
Of the more than 300 firms that applied in 2018 to join the lab, Briggs said there was a noticeable trend of companies using a hybrid approach that included AI techniques and humans working hand-in-hand.
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“A digital-only solution might not be the right mix for somebody who is really financially stressed,” Briggs said. “I think the really thoughtful solutions are coming with some interesting models to think about, ‘Alright, let’s drive digital solutions through AI and machine learning when we can, but then also know when is the moment when I need to refer someone to a human touch or a human element to actually help them with a really particular pain point that they are facing.'”
Managing one’s money is emotional, Briggs said, and some fintechs are recognising customers’ hesitancy to deal solely with computers. Cash-strapped consumers often feel that decisions around managing their money might require a conversation with an actual human.
Briggs admitted there are those who will be willing to adopt digital-only solutions for a majority of their financial needs. However, when it comes to specific, significant choices about their financial future, many customers feel more comfortable dealing with a real person.
Even younger generations, which are often lauded as early and welcome adopters of new technology, have shown an interest in more hybrid-type approaches.
“We see this even with millennials, who everyone says want to go purely digital,” Briggs said. “When it comes to really tough decisions, they often want a person. I think it is, again, that emotional connection to money.”
Here are the five fintechs that will be joining the Financial Solutions Lab:
This San Francisco-based startup aims to serve as a personalised financial health platform for all of its customers’ financial needs.
Through the platform, customers can do anything from access emergency cash to manage credit card debt and student loans.
According to the company’s website, families save an average of over $US800 using the platform.
HoneyBee works with employers to offer their employees an extra week’s pay for unplanned expenses.
The service has no credit requirements, and can provide up to $US2,500. Customers can repay the amount over three months at a 5% service fee that maxes out at $US50.
The San Francisco-based company has over 2,200 companies signed on, including Patagonia and Ben & Jerry’s.
This Chicago-based fintech is focused on making 401(k) transfers as easy as possible.
Manifest looks to standardize the process by linking providers to decrease the cost, the number of compliance issues, and time spent transferring a 401(k).
This New York-based startup tackles out-of-pocket medical bills. Customers are able to upload their bills through MedPut’s dashboard, which is then audited and negotiated by the fintech.
Customers can then repay the bill through small payroll deductions. No interest is charged for the service, and users’ credit scores are not impacted.
Onward is an employer-sponsored benefits program that helps employees deal with financial emergencies.
The Kansas City-based firm is a non-profit that can aid customers in building long-term savings through their paychecks, getting access to credit for emergencies, and educating themselves on how to improve their financial lives.