PFM, AI and more: Startups compete for Barclays funding

Harvest’s software finds erroneous or excessive bank fees and automatically negotiates them down for customers.

“We're solving this problem that's a quiet consumer epidemic in the U.S.,” said Nami Baral, CEO (pictured). “Fees are a tremendous source of revenue for banks, but at the same time, they're a massive pain point for consumers, especially after the financial crisis as banks have come to rely on these kinds of fees as a profitable revenue source. These fees tend to hurt the people who already are hurting from many other aspects of financial lack of liquidity.”

Harvest was built for the 80% of Americans living paycheck to paycheck, Baral said.

“This product democratizes financial wellness for them,” she said. “The first thing we're tackling is fees that have been charged either frivolously, intentionally or unintentionally, because banks are large bureaucratic institutions that have machines that don't properly talk to each other.”

The software watches every transaction (it pulls the information from data aggregators) and identifies the bank fees that are negotiable based on the customer’s relationship with the bank, the bank’s competitive landscape, consumer protection regulations, and a close look at the bank’s own terms and conditions, “something the consumer doesn't do ever.”

It then automates a negotiation between the consumer and the bank through secure messaging.

Harvest is currently working with four banks: Chase, American Express, Citi, and Fifth Third, though its purpose is to be eventually be able to deal with any bank.

"We are built for the consumer, but how we get banks to work with us is by being this independent third party, making sure customer attrition is low and that they're complying with regulatory policies,” Baral said.

Asked if banks always like what Harvest does, Baral said, “I think we're small enough that the banks don't care.” The company provides useful data to institutions, she said.

“We don't exist in universe in which we're antagonistic to banks,” Baral said. “The best way to make a company sustainable as well as continue to provide value to consumers is by trying to find some sort of value for the banks themselves. Traditional banks are facing a lot more scrutiny and a lot more competition, especially from challenger banks that are providing all kinds of more consumer friendly solutions. Banks themselves know they either need to find a way to work with changing consumer sentiment or get disrupted.”

The target demographic is people who live paycheck to paycheck, the 30 million Americans who pay more than $1,000 in banks fees a year; some pay thousands of dollars a month.

“It's crazy how desperate this entire group is,” Baral said.

Pluto has built a financial wellness app just for Generation Z — those born after 1995.

“We're focusing on college students,” said Tim Yu, CEO. “We believe those are the most formative years in people's lives, when they form habits. The goal is to make personal finance approachable and to understand how Gen Z uses finances and how that’s different from millennials.”

Millennials have racked up debt, he observed.

“Gen Z are a lot more proactive about their finances and they want to avoid making the same mistakes that millennials made,” Yu said. “So they're starting to care about finance at a much earlier age.”

The Pluto Money app focuses on the short-term savings goals college students have.

“We don't try to push for retirement, mortgage savings, all the things that aren't relevant to this generation right now,” Yu said.

The app links to bank and card accounts through the aggregator Plaid. It shows users how well they’re meeting their goals and presents “challenges” to meet them, like “spend less on Uber this week” or “spend less on eating out.”

“We don't use the word ‘budget’ anywhere in our app,” Yu said. “We focus on a specific habit that you want to break and how does that tie to your goal.”

As users get older, Pluto will become a “contextual and goal-driven bank,” said Susie Kim, CXO. “When they graduate from college, start earning a salary, have a family, they’re going to go from very short-term goals like saving for music festivals, to saving for a mortgage and then eventually to saving for a mortgage or your kids’ college funds.”

Pluto has had an app in the App Store since October and has more than 12,000 users. The company has raised money from Queen City Fintech.

honeyfi’s app helps couples talk about money.

“A growing trend among younger couples is that people are getting married later and coming into relationships with assets, debt, financial habits, and financial relationships,” said Joe Stanish, COO. “It's very different from previous generations that got married young and were combining zero plus zero. We're taking advantage of that trend to help them understand how they can think about financial goals, and work together as a team, and balance the individuality and autonomy.”

honeyfi uses Plaid to aggregate accounts. Couples choose which accounts they want to share. Each person can keep certain accounts private and others shared in the app, though honeyfi has a unified transaction feed.

Users can add emoticons and comments to transactions. (I suggested adding Edvard Munch’s The Scream; Stanish said someone else had suggested a “WTF” option.)

The app helps customers have tough conversations about finances, Stanish said. “There's a neutral third party helping you understand how you're doing.”

One customer found the app because he was going to a marriage counselor who identified finances as a point of conflict and told the couple to write down everything they're spending money on and then talk about it.

"They said they were millennials and they weren’t going to do that, but they would get an app," Stanish recalled. "Three months later, the couple reported that honeyfi helped save their marriage.”