"You are 0% of the way to your retirement goal! You have plenty of time, keep up the good work."

This message I recently received from the Wela app reminded me to kick my retirement saving efforts into gear. It’s an example of the kind of personalized financial advice many banks and fintechs are trying to provide right now, often with artificial intelligence engines analyzing customers’ account data, predicting future trends and making recommendations.

Add to the list Douugh, which makes its official debut Wednesday (on an invitation-only basis at first). Based in San Francisco, Douugh strives to use artificial intelligence to help the 25-to-35-year-old set reduce their credit card and student loan debt and make better spending and saving decisions.

Over time, it intends to not only widen its geographic reach, but eventually become a platform other fintechs plug into, and a “financial control center” for consumers. You could also call this rebundling.

If all goes according to plan, Douugh could become a significant competitive threat to banks and fintechs that are becoming more like banks (e.g. SoFi, Varo Money).

But first, the startup will have to differentiate its AI-based virtual assistant, known as Sophie, in a field that’s getting crowded. Bank of America is building one called erica. Wells Fargo is developing something similar with Personetics, USAA with Clinc, Huntington National Bank with Strands. Fintechs following the same path include Digit, Moven, Chime, wallet.ai, Wela and Cleo.

The unbundling of banking happened so fast that the average customer has too many financial apps to keep track of, says Douugh founder Andy Taylor. “Somebody needs to be ... making sense of it in one place,” Adobe Stock

Douugh’s founder and CEO, Andy Taylor, says his first concern is helping young people deal with credit card debt burdens.

“I’ve always been passionate about solving the credit card epidemic,” Taylor said. Before Douugh, he formed a company called SocietyOne that focused on reducing the cost of credit for people who wanted to take control of their credit card debt.

At SocietyOne, 55% to 60% of new customers were interested in credit card consolidation.

“We saw that trend at Lending Club in the U.S. as well,” Taylor noted. “When we dug deeper, we realized the consumer debt levels are out of control, especially in the U.S. for student loan debt. So a lot of people have cash available on their checking account and they’re not paying off their credit card balance; it’s kicking over. If we had Sophie in there, she could be doing this on autopilot to make sure you’re not paying unnecessary interest.”

While trying to address that problem, Taylor concluded that the level of financial literacy for this demographic — millennials and HENRYs (high-earning, not rich yet) — is “nonexistent” and that banks are complicit in the failure.

“The big banks are running off legacy business models that are driven to keep customers within these debt cycles. They’re not properly incentivized to foster financial wellness,” he said. “There’s an element of laziness and of lack of transparency and literacy that people don’t even know account fees are being taken out and what those look like. Somebody should be there having your back, optimizing and managing for you.”

Douugh’s plan is to first, get customers to link all their existing financial relationships—credit cards, bank accounts, and so on at multiple institutions to Sophie. Then it can start mapping and diagnosing people’s financial status—for instance, recognizing if the person is spending more than they are earning. It’s also looking to ingest third-party data sets such as weather patterns.

“If we can ingest weather data, we can start to make predictions like Uber surge pricing, for instance, if it’s raining,” Taylor said.

After that, the intent is to transition Sophie from being analytical and read-only to fully transactional, offering a checking account and automated bill payment, saving and budget management.

“This is where we start to encroach on the traditional neobank challengers that have come at it from a current-account point of view,” said Taylor, who hails from Australia. But Douugh has no interest in a bank charter.

Eventually, Taylor would like to see Sophie become what he calls a “financial control center for the customer.”

“If we do our job really well, we can foster a system of partners that can plug into the data set and AI piece, so Sophie can become the true financial coach across all of these different applications,” Taylor said. Transferwise is an example of a fintech that would be a good fit, he said, with its focus on international payments.

In his view, the unbundling of banking has been happening at such a rapid rate that the average customer has too many different financial apps to keep track of.

“Somebody needs to be across all those applications, pulling that data in and making sense of it in one place,” Taylor said. “That’s exactly the business we’re trying to build.”

Traditional PFM tools like Mint.com or Moven haven’t been able to tackle that because they haven’t been automated enough, he maintained.

“It still requires a lot of human touch and input,” Taylor said. “If we want to get customers on a path to financial freedom and get them saving, we’ve got to get them off the drug of a credit card.”