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#AI Debt Coach

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Noom for Debt

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  • News 8
  • Updates 74
  • Comments 18
 Progress

AI Debt Coach is in Stage 2: Research

info_outline In Stage 2, we are fleshing-out potential solutions, researching competitors, building clickable mock-ups, interviewing potential customers, and testing audiences.

 The Unmet Need

Large numbers of people have considerable credit card debt that they feel unable to get out from under.

The financial industry provides debt consolidation and credit counseling but these are not good solutions for many people.

Debt consolidation - whereby the borrower consolidates all of their credit card debt into a single loan, with a lower API - seems smart in principle but, in reality, borrowers do not consider the monthly cashflow required to make the payments on the new loan, and end up running-up balances on their credit cards again. In other words, consumers have been told that the way to get out of debt is to get more credit, which is clearly not a good solution.

Credit counseling is presented as a mechanism for borrowers to lower their APR but is often provided by the credit card companies themselves to keep borrowers paying interest rather than consolidating into loans or filing for bankruptcy.

There is a lot of shame, anxiety, stress, and depression caused by indebtedness. Providing financial management tools to help borrowers manage track expenses, build and manage a budget, etc might help some proportion of borrowers get on top of the problem. However, many people just stick their head in the sand and hope the problem will go away. People know they should create a budget and stick to it but don't.

This is no different to tackling weight loss - just having a bathroom scale doesn't solve the problem for most people. You have to have the courage to step on the scale every day and the tools to change your eating habits.

What is needed is a solution that gives borrowers the courage to tackle the problem, build healthier habits around financial management, and helps drive long-term behavioral change.

groups People

group_work Contributors:  Brett WischowJS Jack Stacey

follow_the_signs Followers:  Jeremy Burton Lissette AriasMP Michael PatockHG Herb GibsonVA Victoria ArchDM Daniel MuletCP Cristin PacificoLD Lara DruyanJM Jim McLeanAH Andy HunnNK Nic KrugerRK Rachel KlinkatsisAS Artem SkripkaKM Kshitij MaheshwariCA Carol Alexander Merrick ClarkJM Jack McMackin Brett Wischow Patrick O'SheaJB Jean-Paul Bonjour Joe QueenanJV Jukka ValkonenPK Peter KellnerAG Amy GuarinoJM Jim MasonSJ Scott Jessuprr rkreager@nd.edu rkreager@nd.edu Andy WillNC Norm CampbellSF Suzanne FitzpatrickAL Alexa LodenquaiJG John GlasgowRC Ryan CodyDB David BoneparthGC Grace ConnorsAP Aurelio PérezSG Sukanta GangulyAM Abhishek MishraLG Luciano GianniniCA Chukwuemeka AmadiHD Hannah Dopico Augusto AlvesEo Elijah ogbonniaCM Chris MacOmberSC Sandra Cavanaugh Laura MurdockJS Jim SmithBW Brian Witlin Matthew CFACC Cristina CabreraSP Samidh Patel Raphael Etaredafe John FeesJQ Jane QiJS Jack StaceyRJ Rikesh Joshi Andrew Hofing Sarah McCafferty Claudius Mbemba Pankaj Srivastava Anthony Whitaker scott harrison Tanya Smith Michael Kane Ari Kepnes

 News
As Americans spend, credit card debt is ticking back up

Early in the pandemic, there were encouraging and surprising signs about the decline of credit card debt. In fact, 42% of those with credit card debt, or 59 million Americans, say they have added to their balances since the beginning of the pandemic, according to a new study by personal finance site Bankrate.com. "Things are better for some, but they are not better for everybody," explains Ted Rossman, Bankrate’s senior industry analyst.

The link between credit card debt and mental health amid COVID-19

More Americans are using credit card debt to cover everyday expenses, like rent. These studies explore the links between debt and stress.

Student loan borrowers 'shouldn't bank on forgiveness.' Here's how to get ready for repayment

Student loan borrowers have been hoping for news of forgiveness. Instead, they're getting reminders from their servicers that the bills will soon resume.

Zogo Finance – Reinventing financial education, one game at a time.

The new way of delivering Financial Education to young adults. Credit unions and banks partner with Zogo to engage, educate and earn the trust of young adults.

Breaking Down the Black-White Homeownership Gap

A recent report quantifies how major factors are linked to the racial homeownership gap.

Wells Fargo tells customers it’s shuttering all personal lines of credit

Wells Fargo CEO Charles Scharf has been forced to make hard decisions during the pandemic, offloading assets and deposits and stepping back from some products.

It's just a happy place 😁

Embedded Lending

This post is the first in a series of SciFi Theses. In this series, we will share ideas for companies that we at SciFi think should be built.

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{"ops":[{"insert":"Sharing an example of a company that does really well with cutting back on drinking via an AI bot: "},{"attributes":{"link":"https://cutbackcoach.com/"},"insert":"https://cutbackcoach.com/"},{"insert":"\nI think a good solution to helping people with debt is to come up with recommended plans or to help encourage small incremental change, ex: try skipping starbuck's today and put $4 towards your savings goal for the week.\nAlso maybe there is a play for personal financial advisors to offer up their services and coaching... I wonder what their appetite for CAC is...\n"}]}
{"ops":[{"insert":"Might be interesting to loop in student loan debt as well to make 'Debt' more encompassing. The psychology/relationship with it could be similar and could expand customer base...will look into confirming\n"}]}
{"ops":[{"attributes":{"link":"https://www.julep.app/"},"insert":"https://www.julep.app/"},{"insert":" - is a ND-related startup competitor pursuing the \"Noom for personal finance\" idea by integrating a psychology-based approach with an emphasis on financial wellness.\n"}]}
{"ops":[{"attributes":{"link":"https://www.meettally.com/"},"insert":"https://www.meettally.com/"},{"insert":" is another competitor which is focusing on credit card debt but is really just a snazzy consolidator interface.... doesn't look like any coaching at all.\n"}]}
{"ops":[{"attributes":{"link":"https://www.helloresolve.com/"},"insert":"https://www.helloresolve.com/"},{"insert":" is another startup here. They seem a bit more \"Mint for Debt\" vs \"Noom for Debt\" but the coaching and supporting aspect is there.\n"}]}
{"ops":[{"insert":"Two key concepts on personal finance I've found to really hold up over the years:\n"},{"attributes":{"underline":true},"insert":"Debt cycle vs asset cycle"},{"insert":"\n"},{"attributes":{"link":"http://mydatewithbooks.blogspot.com/2018/02/Rich-Dad-Poor-Dad-Robert-T-Kiyosaki-Book-Review.html"},"insert":"http://mydatewithbooks.blogspot.com/2018/02/Rich-Dad-Poor-Dad-Robert-T-Kiyosaki-Book-Review.html"},{"insert":"\n"},{"attributes":{"underline":true},"insert":"Not all spending decisions are made equal"},{"insert":"\n"},{"attributes":{"link":"https://www.amazon.com/Poor-Economics-Radical-Rethinking-Poverty/dp/1610390938"},"insert":"https://www.amazon.com/Poor-Economics-Radical-Rethinking-Poverty/dp/1610390938"},{"insert":"\n"}]}
{"ops":[{"insert":{"mention":{"index":"1","denotationChar":"@","id":"1219","value":"Daniel Jimenez"}}},{"insert":", this afternoon I spoke to "},{"insert":{"mention":{"index":"2","denotationChar":"@","id":"56045","value":"Augusto Alves"}}},{"insert":". He worked on a related idea 10 years ago. He had a great quote which I think you'll like:\n"},{"attributes":{"italic":true},"insert":"\"Giving someone living on $200 a week Mint, is like giving someone who can't drive a Ferrari.\""},{"insert":"\nHe also has some great ideas around real-time budgeting. Hopefully, he'll be in here soon too to share more thoughts.\n"}]}
{"ops":[{"insert":"One of the biggest considerations here is CAC. \nIf we bid for users against debt consolidation loan providers, we will end up being outbid or paying hundreds of dollars for each user. The value of each customer to a loan provider is quite high but our ability to monetize each user is lower.\nTherefore, we are searching for alternative acquisition strategies and plan to run some experiments here.\n"}]}