A chatbot app by the name of Chip recently rose over € 1.1 million on the crowdfunding platform Crowdcube. The technology app aims to help users save money.
A chatbot app by the name of Chip recently rose over € 1.1 million on the crowdfunding platform Crowdcube. The chatbot application allows you to save for hard times by connecting with your bank account and automatically helping you save money.
The entire funding round was over € 2.4 million and was concluded prior to the company applying for a banking license. Once the banking license of the company is issued, it would have more flexibility in providing better saving and investment solutions to its customers. The company claims that it has over 30,000 active users currently who are saving millions each and every month.
Chip would be able to lend the savings of the customers once it receives the banking license which would enable it to provide customers with newer investment revenues. Chip would be able to provide lower as well as flexible interest rates to the borrowers as compared to the higher ones which it currently provides on the overdraft facility.
Chip currently has on offer quite a few financial products which primarily retail to its customers. These products currently exist as wholesale investing solutions. The chatbot is beta testing these services currently. According to the CEO of Chip, Simon Rabin, the altering of the existing financial products is limiting the scope for innovation.
Innovation among financial products would help the chatbot to compete with the investment solutions which are provided by banks. Even though, the CEO clearly states that they do not plan on offering a current account to their customers. At least in a regulatory sense, they would be able to innovate financial products as well as solutions which they provide to their customers once they get the banking license.
According to the upcoming open banking legislation, the customers would be able to share their transaction date and even allow third-party applications to move money on behalf of the customers. This would mean that customers are able to easily link to the Chip chatbot with their bank accounts in the future.
According to the CEO, the current financial solutions which they are reselling do not allow them to provide proper product experience to their customers. He further adds that they can provide 10 times better product experience with proper innovation. A lot of customers are looking for the smart credit functionality which they are unable to provide currently as per rules and regulations.
Chip Founder is of the opinion that once they are able to get a banking license which can take time they would be able to provide one of the best savings account in the world which would help customers save significantly as well as help them earn high-interest rates on their money and whenever they need to borrow, it would help them in borrowing at a low cost.
The aim of the founder of the company is to make UK adults earn better. According to the founder, currently, UK adults on an average save only 1.7% of their income whereas; they spend 3.4% of their income paying credit card debt and servicing overdraft charges. The company plans to inverse these numbers with their innovative financial solutions.
The founder further states that they would not like to control the entire process of customer relationship which is currently controlled by the banks but they are merely providing a niche application which is beneficial to the customers.
In this case, it is chatbot by the name of Chip who is providing such services but there are other precedents as well. Zopa is a peer to peer lending platform which is also planning to apply for a banking license.