While COVID has impacted our economy greatly, an unintended consequence of going virtual is the surge of business and new programs in the tech world. Companies like Zoom, Slack, and monday are exploding with customers and businesses are scrambling to build their online presence and services. With technology experiencing a push for innovation, talk of AI and what it could accomplish has been floating around. Along with discussions on AI is the idea of what AI can and cannot currently do.
One of the entrepreneurs voicing his opinions on AI is Khellar Crawford, the founder of Otomo, a platform that enables people to customize and adapt their money management. In a recent episode of the Making Bank podcast, Crawford expresses the challenges with AI in money management and how he and his team have overcome these challenges.
Challenges With AI in Banking
First, Crawford outlines the challenges of applying AI to banking. He first points out: “One thing that’s really hard to predict with any AI, and is really hard to wrap your head around, is how unique we all are.” What Crawford is speaking to is how nuanced each person and their life is—while we can collect data from people, people can also be unpredictable. The different distinctions in everyone’s life and personality makes us difficult data points for AI to understand, as these data points could be accurate one month and completely incorrect the next month.
Crawford said this ever-shifting component is especially exaggerated in banking because the way people earn money now is not how they used to. He says, “People earn more differently today than they ever have,” as more people have multiple income streams. He expands: “especially with COVID, you have people with intermittent income, that’s unpredictable from multiple streams.”
This is partially due to the fact that technology has allowed people greater access to starting businesses, or side hustles, that earn them a little extra cash. While someone may have a part-time job at a company, they also may be selling art on Etsy, or generating an income through monetized YouTube videos. People tend to have a more flexible and inconsistent revenue. This change has resulted in “the fingerprint of how we earn is so different from person to person.” Earning a living has not only become more creative, but also more unique to each person. As a result, banks and investment apps have to “guess how much they can invest for you or guess how much they can save for you based on big data.” Crawford said that these apps or traditional banking “doesn’t take into account the nuance of you.”
The Team’s Solutions
Crawford set out to build a platform that customizes money management and allows for that plan to be as flexible as their income stream is—and he and his team have accomplished this with Otomo. In order to create an algorithm that can tailor a program to each individual, Crawford and his team focused on the input.
First, if you are considerate about the information you’re feeding the algorithm, it can better customize the plan to the person. Each customer who joins Otomo first experiences a more thorough questionnaire about their revenue stream, and what they’re comfortable with in terms of managing money. Crawford says. “We created a technology that asked those correct questions” and is “taking a lot of time to consider how individuals can differ in the way that they earn.”
Just by being aware of this diversity, Crawford can then strive towards creating a more inclusive system. He and his team prioritized having as many choices as possible for the customers and building that into the system. He believes that with an in-depth understanding, Otomo can “then serve tools that fit the entire spectrum of where people could be.” Instead of forcing people to fit their needs into a pre-made plan, Otomo is “a system that’s basically a rules–based allocation engine for your earnings to put money in the right buckets in the right circumstances.”
The Otomo Philosophy
Why did Crawford and his company want to spend hundreds of hours creating a new banking system? Customers are already used to complying to the plans that big banks set out for them, so why make the extra effort? It all comes down to the Otomo philosophy, which originated from a trauma that Crawford endured.
After a bad car accident, Crawford found himself suffering injury and total financial hardship. He says, “I had severe trauma, so I was both cleared financially, leveled financially, and then hurt.” He then decides to try to “reverse engineer good money habits” and build a company that is more forgiving when life pushes you off the tracks. He and his team created the customizable software of Otomo, with a philosophy of understanding. Crawford explains: “the whole spirit here is taking care of people so that you don’t feel like you’re overspending. You’re not subscribed to this thing beyond your means. Your money is moving in the right conditions.”
Those right conditions are generated by asking people what works for them and what they need Otomo to do. Crawford says, “we’re describing it internally is as a considerate technology. We’ve just taken the time to think of you and what you might be going through and your uniqueness.” They strive to be a “uniqueness core, a personalization core for banking and money management,” which is what separates them from their competitors in addition to the tech.
Crawford believes that the traditional, sometimes rigid way of looking at the world no longer applies to how people live today. Otomo hopes “to bring that heart, that empathy core into finance.” In this time, Otomo wants to “bring a little less anxiety to everyone everywhere and put people on that path to prosperity.” During the pandemic, it’s now more important than ever to be empathetic and considerate. Now that we have the ability, we should set up technology to reflect these values.