A few life lessons and other fintech things

Hey everyone, happy Wednesday! Sending this newsletter a day later than usual because of the long weekend. Since I’m sure all of us are mired in lots of work and are still thinking about all the ice cream they enjoyed over the weekend (maybe this is just me), I’ll keep this week’s newsletter short and sweet.


Personal Reflection

I finally took a dedicated mini-vacation after a year and a half of being heads-down on Reconcile and went to the Catskills mountains in New York with some friends. The time away helped me realize a few life lessons:

  1. ALWAYS say yes to a group trip with your best friends. As Warren Buffet once said, “Basically, when you get to my age, you’ll really measure your success in life by how many of the people you want to have love you actually do love you.”

  2. You shouldn’t dread going back to work after a vacation. Instead, you should feel refreshed and reenergized for all the new ideas you’ll bring to the table. Finding a job or a role that you thoroughly enjoy being in is hugely important to happiness. This trip helped reaffirm my commitment to being the CEO of Reconcile!

  3. Embedding yourself within nature, especially in an area with no cell reception, is an amazing opportunity to get back to your first principles - the things that really matter most to you. With no social media to scroll through, messages to reply back to, or push notifications to open up, you simply have to be in the present with the people, animals, and environment around you. If you can find peace at that moment, then you’ll realize how little everything else matters.


Quick Reconcile Update

We wrapped up our latest design sprint after hearing some fantastic feedback from you on our MVP. We’re expecting to ship the next version later this month in about two weeks’ time! You can expect more seamless onboarding, future charge tracking, and charge tagging experiences!

Also, we kicked off the Afore Capital Zto1 program yesterday with a chat on building enterprise products led by Andrew Lee (Co-founder, Firebase), Ilya Volodarsky (Co-founder, Segment), and Merci Victoria Grace (Lightspeed; formerly Director of Product & Growth, Slack). Here are some nuggets of wisdom:


The Big Watercooler Fintech News

Jiko, an early-stage startup, became the first fintech to acquire a bank institution in order to acquire a banking charter. Most fintechs partner with an existing bank institution, like Chime and Stash have. Instead, Jiko bought Mid Central National Bank, a 63-year-old institution. For more information about the deal and what’s to come for Jiko, check out this read by American Banker.


Other News and Tidbits

69% of U.S. households own at least one smart home device! We’re not too far away from smart home devices being mainstays in almost every room in the same way that televisions have become.

The buy-now-pay-later trend now includes Mastercard and American Express as the two credit card giants have entered the mix. Technically, this trend has always existed as it’s the definition of buying on credit. However, in recent years, there’s been an emphasis on a more structured and consumer-first experience.

If you’re interested in learning some technical coding skills, General Assembly is offering a free class this Friday. I’ll be joining to brush up on my programming skills. We can share notes and form a study group if you want!


Thanks for reading!

Jaimin Desai - CEO & Co-Founder of Reconcile

www.getreconcile.com

P.S. If you appreciate these newsletters and want to help us develop more content, we’re looking to bring a marketing lead onto the team. Reach out if you’re interested! Otherwise, would love it if you could help spread the word and share your favorite newsletter!!!

Fintech finds and Reconcile updates

A light read for a great September day!

Hey everyone! Thanks for tuning into this week’s newsletter. We’re sharing a couple of Reconcile updates as well as some great fintech finds from this past week!

Quick Reconcile updates:

  • We got accepted into Afore Capital’s Zero to 1 Bootcamp! A huge thank you to all of you who’ve given us enough feedback and traction to get us into this program.

  • We’re putting together a power user tester community group. Our ask is for you to chat twice a month, and in return, we’ll let you try out our latest features, shape our product roadmap, and gift you a new book every month (selfishly doing this so we can also form a book club 🙃)! FYI, this week we’re testing our auto-bill monitoring and voice library designs. Like this post or reply to this email saying, “Sign me up” and I’ll add you to our list!

Great fintech find #1: Keys to a sustainable lending model

Ayo Omojola is hands-down, one of the best fintech writers. You should definitely check out his full list of essays from the year here. Most recently, he wrote about the keys to a sustainable lending model. I’ll highlight his main point below, but you should 100% read it in entirety (will take you about ten minutes).

To build a lending business that is differentiated and sustainable, you need at least 3 of 4 things: pre-income servicing: a way for the lender to get paid synchronously with, or before the borrower; proprietary data that others don’t have; lower cost of borrower acquisition than competitors lending to that same borrower; Lower cost of capital than competitors lending to that same borrower.

Ayo’s take hit on one of the key trends that we’ve spoken about in previous newsletters around embedded fintech (more on embedded fintech if you’re not familiar) regarding lowering the cost of borrower acquisition. If you work in the fintech lending space or want to move into it, you’ve got to read Ayo’s piece!

Great fintech find #2: What’s inside your (mobile) bank?

In this month’s Andreessen Horowitz newsletter, Angela Strange talks about the rise of mobile banking in the last few months. Interestingly, the megabanks overwhelming opened more new accounts than challenger banks did. You can see the 51% to 18% margin that megabanks won by.

Megabanks aren’t well-known for their mobile banking experiences, hence why Reconcile was started (*cough*). Angela makes the case that banks are generally reliant on third-party tech vendors whose products plug into mobile banking apps. However, she notes that banks should move away from relying on one vendor and instead choose from best-of-breed providers (aka Open Banking).

I agreed with mostly everything Angela said. She ended her post by saying, “even post-pandemic, we will be able to accomplish all of our banking needs by just using our thumbs.” It makes more sense to envision a future in which we accomplish all of our banking needs by just using our voice, at least to me.


Thanks for reading!

Jaimin Desai - CEO & Co-Founder of Reconcile

www.getreconcile.com

P.S. If you appreciate these newsletters and want to help us develop more content, we’re looking to bring a marketing lead onto the team. Reach out if you’re interested! Otherwise, would love it if you could help spread the word and share your favorite newsletter!!!

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The best thing you'll read all-day

Get ready to learn about fintech, Superhuman, and a curated set of top reads

Hey everyone! Thanks for tuning into this week’s newsletter. We’re talking fintech, Superhuman, and recommendations to other worthwhile reads (besides us of course)  😏.

Fintech thoughts to share:

Yesterday, Aaron Frank, formerly co-founder of Final, shared a series of tweets on the difference between what he calls soft and hard fintech. You can click on any of the tweets to view the entire thread. I’ll share highlights below:

Metaphorically, you can think of hard fintech as the piping and infrastructure of financial services whereas soft fintech is more the decorative design and operational component.

I found this particularly interesting as it potentially highlights a revenue plateau that soft fintech is doomed to face. To date, I haven’t seen an example of soft fintech that scaled to tens of billions in revenue. Even long-standing fintech companies and products like Personal Capital (founded in 2009) and Mint (launched in 2006) only have estimated annual revenues of $100M and $500M (rough back of envelope calculation since Intuit doesn’t breakout Mint’s actual revenue).

I totally agree with this. The winners in soft fintech must be category definers - products that create their own market. Soft fintech is like getting a group of settlers to establish a new colony together. Hard fintech is like upgrading buildings in an existing city.

Another great point here. The best soft fintech products I’ve seen either have an amazing end-user experience, like DoNotPay, or a kick-ass distribution advantage, like NerdWallet. Regarding hard fintech, I’ve seen lots of innovation in the banking space from startups after the Durbin Amendment in the Dodd-Frank bill effectively limited income big banks can derive from interchange fees.

For any fintech entrepreneurs, investors, or enthusiasts, I highly recommend skimming over the entire thread!

The best feedback from our design sprint:

We just wrapped up an incredible design sprint for our v2 update (coming late-September) and heard the sweetest compliment!

“I love the feel of the app! It gives me a Superhuman feel.”

As a massive Superhuman stan, I’m extremely flattered by the comparison. For those of you that don’t know, Superhuman is a new email client that’s eliminated much of the friction that comes with managing tons of email every day. It’s users really love it! Since my goal with Reconcile is to make managing our day-to-day expenses extremely frictionless, I’m happy to see us moving in the right direction!

Other blogs/newsletters to follow:

In the spirit of helping bring more value to your lives, I want to share a few other newsletters that you should follow for more business and tech analysis. Here are links to some of my favorite reads that I came across recently!

  • Built for Mars: Monthly posts breaking down fintech user experiences and design

  • Consumer Startups: Weekly posts analyzing noteworthy, new consumer startups

  • Monetary Musings: Weekly posts on all things product management, technology, and finance. Rohit is a phenomenal writer so this is a definite subscribe.

P.S. If you appreciate these newsletters and want to help us develop more content, we’re looking to bring a marketing lead onto the team. Reach out if you’re interested! Otherwise, would love it if you could help spread the word and share your favorite newsletter!!!

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Thanks for reading!

Jaimin Desai - CEO & Co-Founder of Reconcile

www.getreconcile.com

*P.S. If you have any thoughts on our content, please leave a comment or email me at jaimindesai@reconcilemoney.com!

What will 2030 look like?

The implications of voice assistants in our lives

Hey everyone, happy Tuesday!

In today’s newsletter, I touch on the implications of voice assistants, including my bold prediction that …


Is voice really the future or are we just blowing smoke?

My bold prediction is that the smartphone will no longer be the primary interface for apps and services by 2030. For all Reconcile stans and anyone who’s chatted with me in the last year probably knows how passionate I am about a voice-first future. What excites me about voice as a primary interface is that it’s extremely accessible, versatile, and empowering.

  • Accessibility: Voice levels the tech-playing field, especially for older generations that aren’t well equipped to run their lives on tiny screens and complicated app interfaces. I showed my parents the Mint app and their first question was, “okay, so what is going on here?” I like to think that most apps, especially the personal finance ones, are like the TI-84 calculators we used in high school in that they’re extremely feature-packed and designed for expert users. Side note, But for tech-novices, these tools are actually counterproductive and limit access - turning the simple into complicated experiences.

  • Versatility: I’ll preface this section by saying only a few voice assistants are multi-dimensional (e.g. Alexa). For example, Reconcile’s voice engine is strictly focused on financial services. However, as we continue building use cases around voice platforms, we enable a single point of interaction that can handle hundreds of problems for us. Therefore instead of needing to download and engage with dozens of apps every day, I can simply interact with my Alexa instead. Also, as voice assistants integrate into more of our smart devices, I can control just about every technology product and service from anywhere. Unlike smartphones, voice enables access across devices AND applications.

  • Empowering: There’s something magical about technology making our lives easier. When websites open in a millisecond, high-definition videos stream flawlessly, or taxis can be ordered from miles away right to our doorstep in three clicks, we feel amazing! I saw first-hand how empowered my parents felt after using an Alexa for the first time. For years before that moment, I knew they felt discouraged about their comfort and familiarity with tech. But now, I can see a noticeable difference in their confidence levels using technology. In fact, my parents are now trying to teach their friends how to use Alexa in different ways (what could go wrong … )! Voice assistants enabled the Bruce Almighty experience - feeling back in control of technology instead of the other way around.

My first hunch about the demise on the smartphone came from reading an interview with Jony Ive in a January 2018 edition of Hodinkee Magazine (which I highly recommend for watch aficionados). Asked about the problem the Apple Watch is solving, Ive responded,

“Many of us have our phones with us all the time, but they aren’t connected to you. Imagine having something this powerful with you at all times, and what opportunities that might present to the user. The opportunity is phenomenal. Particularly when [you] don’t understand just where we are today in terms of technology and capability, but where we are headed.”

Following this nugget, Tim Cook, in an interview with CBS, mentioned how frustrated he was with his excessive levels of screen time,

“For me, my simple rule is if I'm looking at the device more than I'm looking into someone's eyes, I'm doing the wrong thing." 

Finally, after looking at the massive investment into next-gen devices like smartwatches, smart glasses, and smart speakers, one can deduce that the future does not include smartphones. Rather, we’ll transfer the capabilities of a phone into other devices that we can co-exist with way better than a miniature, digital screen (although the smart glasses may disprove this assumption). If Apple, the most prolific smartphone maker in the world, is hinting at moving away from the iPhone in favor of wearables like the Apple Watch, then I’m pretty confident the world will follow and abandon our current gadgets. Although, Amazon may be more likely to pull ahead of Apple in the voice-first game. I’ll touch upon this in a future newsletter …


Hope you’ve been enjoying these newsletters! Would appreciate it if you could help spread the word to other finance or technology enthusiasts like yourself 🙌🏽

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Thanks for reading!

Jaimin Desai - CEO & Co-Founder of Reconcile

www.getreconcile.com

*P.S. If you have any thoughts on our content, please leave a comment or email me at jaimindesai@reconcilemoney.com!

Google has entered the fintech chatroom

Get ready to see Amazon, Apple, and now Google rule our financial lives soon

Good morning everyone! Happy Tuesday!

I’m saving Reconcile updates for later this month as we’re going heads-down on building our v2 over the next two weeks. Also, I want to get more of you onboarded as soon as possible and to include your feedback in our v2. If you’re available this week, slot time on my calendar using this link and we can chat product!

That being said, here’s some big fintech news that’s been on my mind!


Fintech News of the Week

Last Monday, Google announced plans to expand its Google Pay platform with digital banking services like digital checking and savings accounts through partnerships with eight financial institutions (a mix of global banks, community banks, and credit unions). It seems like Google will deploy front-end features like budgeting tools and financial insights, while the banks will do the heavily-lifting on the back-end with ACH, deposit collection, payment processing, etc.

Benefit for Google

Google can deliver even-more personalized deals (ads) to end-users by analyzing their shopping preferences. Get ready to see more “25% of Dominoes tonight” ads across your Gmail, Maps, and Wallet. Consumer spend data is extremely valuable for Google, and I’m sure is the primary reason for it to enter this space.

Other reasons include deepening user relationships and driving more engagement for Google Pay, which derives a small fee every time it’s used to transact. I’m sure Google also wanted to go tit-for-tat with Apple and Amazon as they both enter the financial services market as well.

Benefit for Banks

Banks get the PR benefit of being associated with innovative tech firms. This is particularly valuable for community banks and credit unions that are not known for its tech-forward products and services.

“They're looking to get the brand recognition of being aligned with Google,” - Emmett Higdon, director of digital banking at Javelin Strategy & Research

Banks are also hoping to access a slice of Google’s one billion monthly active customers. As more of us shift towards digital banks and fintech apps to manage our money, legacy banks and credit unions were the most likely to be left behind. Now they can serve tech-savvy customers, who would probably never have opened an account with them, without paying a huge acquisition cost.

Additionally, community banks and credit unions with small product teams can now integrate into one of the biggest mobile wallets with Google doing most of the implementation.

Final Thoughts

This is another example of the “banking-as-a-service” model that financial institutions have deployed over the last few years. It feels like a definite win for banks as they get a top tier tech company to revitalize its end-user experience and attract the already emergent tech-savvy population.

For Google, I’m still unsure of this partnership as it may expose them to additional regulatory oversight around its data collection and privacy practices. Furthermore, who would even feel comfortable banking with Google and giving up even more data to them? Cornerstone Advisors launched a study last month that showed more than half of US consumers wouldn’t ever open a Google-backed checking account.

Overall, as a fintech-geek, I think this is an interesting partnership that follows the Apple-Goldman Sachs model from a few years ago. Even Amazon continues to creep into the financial services market via a similar tech-bank partnership (which I wrote about a few weeks ago). Big tech firms want to get closer to their end-users and want to introduce their product teams to a new, juicy financial services market that’s ripe for better user experiences. As a startup that’s looking to revamp the reconciliation experience, I’m all for more partnerships like this!

P.S. if you work at a financial services institution and would like to partner with us, ping me on LinkedIn!


Thanks for reading!

Jaimin Desai - CEO & Co-Founder of Reconcile

www.getreconcile.com

*P.S. If you have any thoughts on our content, please leave a comment or email me at jaimindesai@reconcilemoney.com!

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