If you have a tough time managing your personal finances, you might be interested in Penny, an app that examines behavior around your bank accounts and credit cards to alert you of any issues, such as data breaches. The company looks to rival Mint.com in terms of functionality, but is going after the average person who feels bored or stressed when dealing with their finances.
Spun out of a hackathon, this Y Combinator-backed company provides a bot-like interface that will provide insights around your income and spending. You can link your credit cards, bank accounts (more than 10,000 institutions are supported), or even Venmo or PayPal into this app, which is available on iOS and Android. Afterwards, Penny will tell you how much money you spent eating out, recent fees you were charged, a summary of your spending in the past week or month, and upcoming bill payments.
“Most personal finance apps are built by technical people, for technical people. They have tons of graphs and tables and budgets, which can be overwhelming to people who are just starting out or don’t care to get a degree in finance,” explained Penny cofounder Mitchell Lee. “Through conversation, we can explain complicated financial topics in easy to understand, friendly terms. Plus, Penny’s personality is lighthearted and encouraging, which makes engaging with your finances more palatable.”
The choice to have a bot within a standalone app was deliberate, instead of going with Kik, WeChat, Slack, or Facebook. Lee believes that it offers a better experience. He said, “The benefit to a chatbot platform is that you meet people where they already are, and ‘signup’ generally has lower overhead.”
He explained that there are other disadvantages, namely some messaging apps not permitting the secure submission of username and passwords; having a poor interface to browse your transaction history, changing the category of a transaction, and viewing your balance; not having an ability to lock individual chatbot threads behind passcodes to protect privacy; and pre-populated responses not being “first-class citizens in most chatbot platforms.”
Penny is free to use, but the company has also launched a subscription plan that provides additional features, such as new categories and the ability to edit transaction names. The company also has partnered with affiliates to provide opportunities to up-sell products.
Everything that Penny examines is done so with your permission, and you can close your account at any time and your data will be permanently erased. The company said it uses bank-grade security, including SSL 256-bit encryption, to protect your financial information and claims that no login information is stored. Penny doesn’t allow money to be transferred within its app. Lee said that Penny uses aggregator service Plaid to connect to bank accounts and boasts that it offers better reliability and security than what big banks are offering.
“Most millennials don’t trust the major banks, and for good reason. The top four banks are all among the top ten least loved brands in the U.S. Somebody needs to fill that trust shortfall, and we think Penny is uniquely positioned to do it,” Lee remarked. “People genuinely enjoy chatting with Penny. Over time, as Penny continues to provide helpful insights and watch over people’s account, trust in Penny climbs. It’s a personal, intimate way to tackle an otherwise complex area.”
More than 200,000 people are using Penny, and the company plans to eventually make Penny the single point of contact for your finances. Lee said that, beyond tracking finances and dispelling advice, it’ll be able to also help you save and invest your money — perhaps similar to Digit, which lets you pay your bills, transfer funds, and perform more around any financial decision you make.
“In the future, all you need to do is figure out where you want to go, and Penny will get you there,” Lee said.
The company has raised $1.2 million in seed funding.