Personal finance app gini welcomes competition from bank giants

February 08, 2019 14:47
Victor Lang, co-founder and COO of gini, said the startup has just completed a $1.6 million funding round, allowing it to expand overseas. Photo: HKEJ

Hong Kong-based startup gini piloted last year a spending tracker app that allows users to bring together all their accounts and credit cards in one spot, enabling them to keep track of their finances conveniently. Recently, the firm announced the completion of a seed funding round raising US$1.6 million.

In a recent interview with EJ Insight, Victor Lang, co-founder and chief operating officer of gini, gave insights into the global trend of Open APIs (Application Programming Interface) in the banking and financial industry. 

With a mission to empower people to take control over their finances, the company launched the gini app, which connects with users’ banks and credit cards, and automatically picks up, sorts and categorizes expenses to provide an overview to users. Since the launch of a trial version last March, the mobile app is said to have amassed about 20,000 users.

In late January, the startup announced it has raised US$1.6 million from international institutions and Hong Kong-based early stage venture capital firm Vectr Ventures. It also unveiled a partnership with financial data aggregation provider Salt Edge, which, gini said, enables it to be compatible with over 3,000 financial institutions in 60 countries by the second half of 2019.

Lang told EJ Insight that the app has already connected with 38 institutions in the United Kingdom, including the Lloyds Bank and Barclays, and 11 institutions in France.

With new investors onboard, Lang admitted the two-year-old startup has yet to achieve profit at the moment. “Profitability is not an operational indicator for gini,” he said.

However, as many finance management applications have added the financial product recommendation feature, and collected fees from the banks as income, "gini is considering launching such services in the third, or the fourth quarter of this year" as a monetization strategy, Lang said.

In addition, the finance management app will enter the enterprise segment, adding services connecting with clients’ corporate banking accounts.

API is a software intermediary between software applications, both within an organization and between organizations, enabling secure, controlled, and cost-effective communication where one application calls upon the functionality of, or passes data to another application.

Open APIs refer to APIs that allow third-party access to systems belonging to an organization. For example, online travel agencies now interact with the airlines’ API, allowing the agencies to get the most updated information from the airline’s database to help customers book seats via the agencies’ software applications.

Open APIs have become an emerging trend in global tech and commercial sectors in recent years, and are now embraced by retail banking institutions.

In the absence of data-sharing agreements with banks, a number of financial technology (fintech) companies have emerged with business models that rely on so-called "screen-scraping" technology to access customers’ data from their banking accounts, offering services such as personal budgeting tools as well as better deals in shopping and household expenditure items.

The technology involves the customer providing the fintech companies, or an associated "data aggregator", with access credentials, which the fintech firms use to log into the bank’s online banking interface. It then extracts the customer’s data, such as account balance and transactions, to aggregate and present the information for users’ consumption.

A privacy risk emerges as the "screen-scraping" approach gives the third party full access to the user’s account, and it also exposes the customer to risk, as providing their login credentials to a third party is usually in breach of a bank’s terms of service.

Gini’s personal finance management app has stirred a privacy controversy when it launched a trial version in March 2018, prompting local banks to clarify to customers that they were not cooperating with gini

The Hong Kong Monetary Authority, the city's de facto central bank, also announced that this kind of app-based service, which connects with users’ bank accounts and credit cards, is not regulated by the HKMA.

Asked about the controversy, Lang told EJ Insight that the finance management app is still a new product for the Hong Kong market, which is why it is not easy for the public to accept it.

“For example, when Uber and Airbnb launched in the city, at first, they all attracted resounding criticism and questions concerning the security level. But over time, consumers will gradually accept and understand the benefits of the new product."

After the HKMA issues guidelines on the product, banks in the city are jumping on the bandwagon of open banking API. Last year, Citi announced new API partners, including household consumer brands EGL Tours, Fortress and Watsons, in its push in API usage and cross-industry collaboration, to enable partners to launch new products and services.

The Joint Electronic Teller Services (JETCO), which has over 30 member banks in Hong Kong and Macau, launched Hong Kong’s first API exchange platform JETCO APIX, which will provide over 200 APIs from 13 banks, covering product and service information including deposits, foreign currency exchange, loans, investment, and many more.

It is not difficult to imagine that if large-sized banks launch their own personal finance tools through open API collaboration, users are likely to become more confident in the applications developed by large banks.

As to competitors, Lang said: "We are pleased to see more competitors in the market, which will help the market to promote the convenience and benefits of fintech."

The company will roll out marketing campaigns and continue to optimize the gini app for a better user experience.

Lang also stressed that for new financial products, word of mouth is very important. "Through word of mouth and peer recommendation, it will be easier for the general public to adopt our app," he said.

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EJ Insight writer