Special Report: The fintech platform is taking a partnership approach to scale by leveraging the infrastructure of established bank partners.

Fintech company Douugh (ASX:DOU) has joined the ASX boards today after closing a $6m share placement that was heavily oversubscribed last month.

The company now plans to scale up its financial wellness platform in partnership with US-based Choice Bank. Douugh will use Choice’s banking license to launch its AI-driven app that helps users spend wisely, save more and become financially fit. CEO Andy Taylor said while financial apps have proliferated, Douugh offers something different.

“There are plenty of apps that offer banking, some that offer budgeting tools, but nothing and no one addresses a full, personal financial picture from inside a smart bank account,” he said. “We use AI to analyse your spending and constantly optimise your finances based on your personal earning and spending patterns. We look at the bills you need to pay and the goals you want to achieve, and then show you exactly what you need to do.”

 

Unique offering

The end-goal is to create a ‘financial control centre’ for customers via a subscription model, which combines transaction services with additional partnerships that provide access to simple investment products such as exchange traded funds (ETFs).

Central to that is the partner model, which will allow Douugh to take a capital-light approach to growth – a key differentiating factor from existing ‘neobanks’ in the market.

“Neobanks have to emulate traditional banking models – essentially, getting their customers into debt to turn a profit,” Taylor said. “We don’t believe in that model, and by using banking-as-a-service, we can offer a government-insured bank account and debit card but with technology around it that’s ten times better than anything a traditional bank would be able to do.”

At the same time, Douugh’s banking partners benefit by leveraging their operations to new markets based on improved tech offerings for financial wellness – a key growth market in the millennial and Gen Z demographics.

“It works well for everyone – our partners are able to ‘sweat’ their core offering which is their banking system; we get to build on banking infrastructure to help people from the source; and customers get to access very cool and innovative new tools without leaving the bank they’re already using,” Taylor said.

 

 “Future of banking”

Having secured a partnership with the US-based Choice Bank, Douugh is targeting the huge US market in its early phase of growth. Part of the strategic rationale for an early listing is to capitalise on the structural shifts in consumer behaviour taking place there.

“There has never been more need for financial tools to help people in the US with their finances,” Taylor said. “We’re in a position to really make a fundamental difference to people’s lives. We want the people who use Douugh to immediately realise they can’t live without it – that’s what we have heard in beta and we’re so excited to scale this up when we launch fully later this year.”

He added that one of the key advantages of the US market is that it has a well-advanced regulatory framework around data sharing.

At the same time, on the demand side there’s an outsized opportunity to help move consumers away from outdated transaction processes such as cheque-based payments.

Have established a global partnership with Mastercard, Douugh is finalising the product rollout for its transaction and card services in the coming weeks.

The crux of the company’s strategy is to get a first-mover advantage in the “future of banking”. That future will be based on layering AI-based platforms over of existing infrastructure, to leverage the flow of data under new Open Banking regimes.

“We are laser focused on helping people better manage their money, with our long-term goal to become a fully autonomous financial control centre for our customers, which will eventually see us expand into SME banking,” Taylor said.

This article was developed in collaboration with Douugh, a Stockhead advertiser at the time of publishing.

 This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

 

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