Next-generation neobank Douugh (ASX: DOU) has announced the official launch of its money management app in the United States following a successful 18-month beta trial.
Targeting Millennial and Gen Z consumers, the app applies artificial intelligence (AI) and machine learning to a customer’s personal income and spending data to tailor an individual budget to help them “spend wisely, save more and build wealth”.
Operating a banking-as-a-service (Baas) model, Douugh’s offering includes a smart bank account insured by the Federal Deposit Insurance Commission (FDIC) as well as a Mastercard/Apple Pay enabled debit card.
Douugh’s go-to-market growth strategy involves working with Google to use its AI-powered ad bidding platform to target profitable customers, developing a viral distribution channel through a “member-get-member” incentive, and an expanded marketing program across online and social media platforms.
Bills jar feature
The launch also marks the introduction of Douugh’s “industry-first” Bills Jar feature, which links to a dedicated virtual card and helps customers track and cover their fixed and recurring outgoing expenses.
Douugh founder and chief executive officer Andy Taylor said this was an enhancement that arose out of the app’s testing phase.
“Though our beta phase, we found that one of our customers’ biggest pain points was keeping track of their fixed and recurring bills, especially subscriptions.”
“Bills Jar flags upcoming bills, allowing customers to sweep in funds and use the dedicated virtual card to become the principal card on file to pay recurring bills, outside of the main Douugh checking account,” he said.
Mr Taylor said the feature is now a key component along with the app’s integrated Savings Jars, Rainy Day Jar and Spending Targets, which allow users to “better manage their money and stop living pay check to pay check – a task that will become automated and self-learning over time with the introduction of Autopilot”.
App users will also have the ability to link their existing bank, investment accounts and credit cards to get a single view of their overall financial position.
Douugh said its upcoming Autopilot and Investment Jar features are scheduled to be rolled out “in the coming months” before a monthly subscription fee is introduced.
The “favourable” US banking market
According to Douugh, the US offers a “favourable” banking market structure including revenue from interchange (which is substantially higher than outside of the US), coupled with the explosion of digital banking, payments and robo-advisory adoption as a result of COVID-19.
In addition, a recent news poll showed voters aged between 18 and 34 were most likely to suffer an economic blow such as losing health insurance or getting a pay cut due to the pandemic.
Meanwhile, a 2019 GOBankingRates survey recorded almost 70% of adults in the US having less than $1,000 in a savings account compared with 58% in 2018.
“We want to build a global brand and platform business, and the US is the place we need to start to allow us to build the scale needed to execute our long-term business plan,” Mr Taylor said.
“We see open banking and autonomous AI technology as the next frontier in fintech, and the biggest disruption to happen to such a stale industry vertical that has only really experienced linear improvement to date,” he added.