image by frankieleon. Creative Commons attribution CC2.0 Generic
What's more fun than a robot than earns you extra money in your savings? How about the chance to buy equity in the company that makes the robots? Two ways to win!
Plum calls itself "the little savings butler you’ve been waiting for." Like Jeeves, it's smater than you are and loyal. So it watches what you spend, makes sure money is there, and helps you save, stress-free.
Plum uses a "smart algorithm, driven by AI" to analyse what's happening in your bank account. The algorithm spots opportunities to save small amounts of money, and moves them into your Plum savings account.
Did we mention it lives inside Facebook? That's a good thing, we are told.
Today, Fintech Finance woke us up with the news that Plum is your AI-enabled Financial Butler making sure you are saving, investing, & not overpaying bills. The company's pitch on Seedrs says:
"We’re building a better, effortless experience using world-class technology, data and behavioural science."
Fintech Finance explains how the company intends to do that. The purpose of their equity raise is " to fund aggressive growth and expansion plans. The disruptive startup says Fintech’s increasing penetration hasn’t yet reached the mass market but Plum is set to change that. Plum has undertaken the ambitious task of helping millennials save money in a way they barely notice. (emphasis added by Another Crowd.)
Plum is being marketed to millenials as a passive savings product.You don't need to think about it; it's just chugging away in the background. But we know, because we read about it in February, that the Plum Savings Account puts its customers money on Ratesetter. It's also covered in the Plum FAQ: "How will my savings be invested?"
So Plum customers are getting the higher returns of peer-to-peer lending, Nd are exposed to the risks, except that they might not be aware that's what they are doing.
We at Another Crowd are very positive about peer-to-peer lending, but we care very much about the risks involved, and we want investors to understand risk, take it on board, and go into it their eyes open. So we'd like to know a bit more about what this robot does, and whether it protects Plum account holders from the downside risks.
We've also noticed in today's news that Ratesetter has plans to boost its direct marketing methods to diversify its sources of new business borrowers. Peer2Peer Finance News has the details. It's a sensible and innovative move, and we'd like to see it succeed, but again, we want to ask some prudent questions about investors going in with their eyes open.
Peer2Peer Finance News tells us that Ratesetter "currently originates the bulk of its business loans via intermediaries, such as accountants or commercial brokers." But the company's expansion plan involves tapping a different group of borrowers.
“Our business lending is going up quite dramatically now,” Paul Marston told Peer2Peer Finance News. "We strengthened our team last year and improved our technology this February, so now we’re ready to go out and find business borrowers as part of our next strategy.”
This could involve more PR, marketing on Google or approaching potential borrowers within trade parks, Marston said.
It sounds good, and we want to see it succeed it, but our advice is to go in with your eyes open, wherther you're a Ratesetter lender, a Plum saver, or a Plum equity investor.