ALBERT Fintech Case Study

Overview and Origin

Albert is a financial services fintech Incorporated November 1st, 2015, by duo Andrzej Baraniak; Founder, and Yinon Ravid; Co-Founder and CEO. The pair met at Columbia University while studying Engineering and combined have over two decades of financial expertise. Baraniak with Boston Consulting Group advising banks and insurers and Ravid from open folio and Oak Hill advisors. Ravid is also a second-time founder in consumer fintech, and Baraniak is a Harvard Business School graduate.

The Product

Baraniak and Ravid founded Albert since friends and family habitually asked them Finance questions. In his interview with Mary Juetten of Forbes in 2019, Ravid describes Albert as a "smart friend" you can ask any money question. Albert acts as a financial advisor. Instead of meeting in person, Albert helps manage day-to-day finances remotely through the app with human experts in mobile banking, savings, and investing. Source

Investment

Albert has raised 72.9 million from 14 investors since 2015 in 7 rounds, including pre-seed, seed, series A, and most recently, series B on March 10th, 2020. The series B pulled in a 50 million investment from capital G, a growth capital fund financed by alphabet for growth-stage technology companies. Albert's largest investors are 500 startups, QED investors, capital G Finance, solution labs, and Portage 3 Ventures. Source

Business Activities

Albert capitalizes on the emerging need to maintain day-to-day finances remotely and digitally. According to the founders, people under 45 who make $100,000 a year are underserved by the financial services industry. Access to tools and services to manage their money is out of reach, educating themselves is time-consuming, and they don't know what advice to follow. Albert streamlines user's ability to track their finances and improve their Financial Health through practical, actionable recommendations. They can reduce interest rates on credit cards, have Albert negotiate with mobile phone and utility providers, and examine banking data to inform potential savings opportunities. The founders built Albert to be clear on how users can handle their money. Albert tries to make saving and budgeting as easy as possible and provides human experts called Geniuses to help Achieve Financial Wellness. Source

Users

Baraniak and Ravid declare to have all demographic users. Still, the largest group is between 18 and 34, living paycheck-to-paycheck, struggles with financial security, and is starting on their financial journey with a market of approximately 73 million users. Source

Unique Value

Yinon claims their business model is the most unique as they offer no-cost financial planning and instead charge providers. They report that their customer acquisition cost is $5.00, which gains $200.00 for every single action. Each time someone completes a transaction on an insight to improve their Financial Health, Albert gets paid. Source

Tech

Outside of mainstream programming languages such as Python, SQL, and C++, Albert uses various technologies. The most unique is their proprietary algorithms that make actionable recommendations to their users. They use PLAID to integrate banking data and simplify ACH payments, AWS for Cloud Computing Services to analyze the data, analytics such as Google Analytics, and tracking such as Facebook pixel to gather data around customer usage and interactions. They also use AI and chatbots to answer user questions and increase customer engagement. Source

Landscape

Online, Mobile Banking, and the development of API's have propelled fintech applications growth. Toptal reports a significant increase in the fintech sector to 305 Billion by 2025 from 128 Billion in 2018. Widely used Applications include digital wallets, online lending platforms, cryptocurrencies, micro-investing, and neobanks, to name a few. Source

Competitiors

Albert sits comfortably within the personal finance, online banking, and investment domains and competes directly with Fintech's offering similar features such as Digit, Acorns, and Qapital.

Acorns is Albert's largest competitor, with 3.5 million monthly active users investing $50-60 dollars a month. Acorns help users grow their money, and their app is an all-in-one offering investment, retirement, and checking accounts. It also shows ways to earn more money and increase your financial knowledge.

Digit helps users save, invest, pay off debt, prevent overdrafts, and guide their money daily to reach their goals faster. It analyzes income and spending then keeps what you can afford so you can progress to financial health.

Qapital helps users save faster with goals and rules, and users can team up with others to reach shared goals. Qapital also has pre-built portfolios that diversify users' funds and plan for retirement. Their checking account helps to balance funds between spending and saving, making sure users cover your commitments while funding their future.

Results

Albert is a leader within comparable growth stage fintechs in its sector. They went from idea to market in 6 months and had 15,000 signups pre-launch. They have many advantages over their competitor's platforms, including easy-to-implement and straightforward features, high engagement rates, and a highly profitable business model. Source

Metrics

Albert's core metrics would be their financial performance, customer satisfaction, learning and growth, and internal business processes. Financial metrics include but are not limited to Net Present Value (NPV), Customer Acquisition Cost (CAC), Operating Profit, Net Yield, and Monthly Growth. These metrics help identify if the company is generating enough revenue, are acquiring your customers at a low enough cost, and the relationship is profitable.

Within consumer metrics, you want insight into the consumer using your product. Examples would include Customer Acquisition Score (CSAT), Ratings on Third-party sites, Activation Rates, Voluntary Attrition Rates, and Monthly Active Users. These identify customer satisfaction and what people are saying about your product if they're using your product and staying engaged with your product.

Internal processes are crucial to understanding scale and sustainability over time. Some of the metrics include System Availability, Operational Costs, High Service Issues, and Complaints per 10,000 customers. The organization's health relies heavily on internal processes; this reporting will help identify quality, scale, resources and ensure that systems and processes are implemented and improved with a feedback loop.

Learning and growth help measure how an organization's people are doing; it covers Employee Engagement, Voluntary Attrition, Referrals, and Open Vacancies. Tracking these KPI's engages employees to stay happy within their roles and fill your talent pool quickly.Source

Recommendations

Albert's product offering has a healthy amount of room for improvement. It lacks some key features, namely essential banking services such as checking and savings accounts, and doesn't offer rewards from brands or retailers like other apps such as Acorns.

Albert also misses the mark with its target age group by only offering automatic savings when a user gets paid instead of a daily feature that would continually engage users. This feature is probably not enabled since Albert has yet to launch its debit card and corresponding checking account. Although, from their website, it appears that it is on the horizon very soon.

On the investment side, Albert would be wise to implement fractional share ownership products that would help individuals invest in companies and markets that were once only attainable at high price points. This feature could bring in a new set of users that don't have any investing experience or strategy. In conjunction, they could use Robo-advising to compliment their "human-geniuses" recommendations. Offering these additional services could edge Albert to becomming a complete all-in-one platform for budgeting, saving, investing, lending, and day to day banking. While other competitors have some of those features, very few have them all.

New Product Tech

Albert can utilize use AI to automate functions (i.e., Robo advising); and distributed ledgers and Blockchain technology to increase the speed of transactions, thus making it more profitable.