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MoneyLion brings traditional banking ever closer to obsolescence

Category: Banking
Published: Thursday, 07 July 2016 03:24
Written by Super User
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The lingo of personal finance is rapidly changing. Mint has replaced our nagging parents and significant others who think our spending is out of control. Wealthfront and Betterment took away our personal wealth managers. Heck, we don't even have to go to a bank anymore to get a loan with SoFi or Lending Club.

Since 2013, CEO Diwakar Choubey and his team have been developing MoneyLion to combine personal loans with credit monitoring and personalized financial nudges.

The way something is presented is often more important than what is being presented. MoneyLion wants to get people spending better by presenting information differently.

Users can simulate their future credit score in MoneyLion. Having a window into the future can help people counteract forces like hyperbolic discounting. For non-CogSci folks, this is how researchers explain why people can easily see the value in setting their alarm for 6am at night but find it hard in the morning to see the same inherent value and wind up smashing the snooze button 3 times.

In a financial context, people are really bad at anticipating future frustration. If I buy an Apple Watch with my credit card now, my brain doesn't want me to be able to imagine the bill in my mailbox.

Customers check their credit score on MoneyLion an average of 3.9 times a month. This degree of transparency makes people sweat in the short-run but reduces the likelihood of bad decision making that induces long-term elevated stress.

The platform also leverages data to recommend loans when they are most needed. If spending patterns appear incongruent with prior months, MoneyLion can suggest a small loan to smooth things over. A user can receive overdraft warnings within the app and take a $200 advance in about 15 minutes.

Tim Hong, one of the key behavioral architects of the platform, wants MoneyLion to dream big. Many of the tedious financial tasks we all dread can be streamlined with readily available technology.

How can we prevent fraud? Facial recognition of course. Need a verification photo for a loan application? Just take a selfie.