A fintech startup’s new banking platform is trying to capitalize on gaps in financial advisory services and take on traditional bank-technology vendors.
SigFig Atlas, which SigFig unveiled on Wednesday, is a platform banks can integrate into their existing core systems. It provides customers personalized digital financial advice, from checking account upgrade suggestions to wealth management and everything in between.
The goal of the platform is to help institutions provide more personalized digital advice.
“Atlas combines two problems that exist at the same time, one for the consumer and one for the bank or the banker,” said Mike Sha, SigFig’s CEO.
Atlas, the third platform suite to be offered by the San Francisco-based SigFig, represents the culmination of a long-stated goal of making inroads into the traditional core-systems market.
The startup, which began as a retail robo-adviser and has since transformed itself into a B-to-B digital financial services provider, has the backing of several large institutions, including UBS and Wells Fargo. It also offers a white-label platform for self-directed investors and for financial planners to offer clients.
The newest platform is built to help bankers maximize the efficiency of their physical locations, Sha said.
“Banks are trying to figure out what do you do with these branches,” he said. “How do we make these branches impactful to the bottom line and delightful for the customer at the same time?”
In an ideal scenario for banks using Atlas, a current customer would complete a digital survey powered by Atlas about their current financial health and future goals either in the branch or remotely. Atlas, which uses machine-learning algorithms to make recommendations, will then present the customer with the results.
In a branch situation, Sha said, a customer would likely complete the survey on a tablet. Customers have the option to act alone on the advice, but a face-to-face conversation with a bank specialist might have the biggest impact, he said.
Atlas can help smooth conversations between banker and customer, as the survey results would guide the interaction, Sha said.
“If the banker wants to give personalized advice, they need to know a lot about the customer,” he said. “It turns out the traditional retail banker finds that exercise quite challenging because the questions are personal.”
He likens the situation to when a patient has their first interaction with a new doctor. New patients are asked to fill out a litany of paperwork about past medical history to help pinpoint a problem.
A doctor can then ask the patient a defined set of questions that might not be as embarrassing to the patient. In turn, the patient can be more truthful with the doctor.
“A very similar thing can happen with finances,” Sha said. “You might feel pressure to not provide the most truthful answer, and for the customer, that’s doing them a disservice.”
A recent survey from J.D. Power found that 31% of customers who receive financial advice from the nation’s largest banks do so through a digital channel — whether mobile or online banking — and email. That was a 2-percentage-point increase from the prior year.
“These are clear signs that market adoption of digital advice is accelerating,” said Paul McAdam, the senior director of banking intelligence at J.D. Power. “Whenever there is concurrent growth in customer demand and satisfaction, it’s a good bet that growth rates are accelerating.”
The study also found a 2-percentage-point decline (43% to 41%) in consumers receiving financial guidance through face-to-face interactions at a branch.
Sha said it will be up to the bank how best to integrate Atlas, but there will be options for in-branch use, mobile and online, as well as call centers.
SigFig has signed up banks to use Atlas, but Sha declined to name his partners.
Community and regional banks stand to benefit the most from a platform such as Atlas, as the J.D. Power survey showed consumers were increasingly satisfied with financial advice from the nation’s top banks.
The study’s big-bank average score for customer satisfaction with financial advice was 826 out of 1,000. The regional bank average score was 800.
