Many of us know the feeling of receiving an email notification from the bank that we have overdrawn our account and have been charged a $35 overdraft fee. You feel particularly foolish because you lost complete track of those five lattes you purchased over the last week that put you over the top. But, what if you had a virtual financial coach looking over your shoulder to catch the problem and then transfer the necessary funds to cover the overdraft? That would be a big help. If the tech geniuses behind the new Douugh app have their way, that is exactly what you’ll have along with a complete financial control center that will help you better manage your money so it never happens again.
What Exactly Does Douugh Do?
The Douugh app is the brainstorm of Andy Taylor, who also founded Australia’s most successful P2P lender, SocietyOne. Concerned with the alarmingly low financial literacy rate among young adults, he set out to create an AI-based app that could not only educate them on personal finance matters, but could also act as their virtual financial coach, providing specific direction on money management. Douugh does just that with the use of artificial intelligence and a virtual personal assistant named Sophie.
As stated in its mission, Douugh is “taking an AI first approach to reimagine banking, enabling you to better manage your money and achieve financial freedom.” Founded in 2016, San Francisco-based Douugh is on its way to accomplishing that by “creating an effortless and intuitive experience through a smart mobile app powered by a personal assistant for your finances.”
How Does Sophie Work?
Douugh and Sophie still have a ways to go before they are ready for primetime, which is estimated to be some time in the first quarter of 2018. For now you can download the app for free and start inputting all of your bank account information so Sophie can categorize your transactions and learn about your spending habits. She will also help you set up spending targets so she can let you know when you may be overspending in a particular category. She is available 24/7 via an in-app chat-bot; so you can simply ask her how you’re doing with your spending. She will not only let you know how you’re doing, she’ll let you know if you’re spending too much relative to your spending history and your target. You can also ask her to adjust your target if you’d like.
Ultimately, Douugh wants Sophie to be able to act as your personal banker, helping you take control of all your finances. Sophie will be especially useful for users who spread their money and their spending over multiple apps and credit card accounts. Although young adults have taken to financial apps, it can make managing personal finances more difficult having to manage them across multiple apps. Sophie will be able to aggregate all of these accounts into one spending record with the ability to optimize their use and prevent overspending. For users with credit card and student loan debt, Sophie will help set up a debt reduction plan and then become your accountability coach for implementing the plan.
Who is Douugh’s Competition?
Douugh has launched Sophie in the middle of a crowded field that includes most of the major banks who are also experimenting with smart mobile apps. Bank of America, Wells Fargo, USAA, and Huntington National Bank are all developing their own version of an AI-based assistant. Douugh sees other fintech companies as its real competition, including Moven, Chime, Wela, and Cleo, all who are developing similar apps. For now, Douugh appears to have a leg up on its competition with the release of its beta version.
Douugh’s long-term plan is to turn Sophie into a personal banking center for its users, offering smart checking, debit cards, automated bill payment, and transfers. For users who prefer to keep their banking services unbundled across multiple apps, Sophie will still be able to aggregate them so the data can be organized on one platform. You will be able to set savings goals and have Sophie track your progress by monitoring your savings and retirement accounts. Amid the success of online banks, Douugh expects to capitalize on the move by younger adults away from traditional banks to mobile banking platforms.
For now, Sophie is in training-mode, learning how to gather and analyze information so she can become more proactive in providing guidance and initiating transactions. The app is currently available for free on iOS, but a fully operational version should be available for all mobile users next year.