Data Science Investment Counter —Funding raised by UK data science companies in 2018.
£ 5.640 Million

AI-powered Saving App Chip Raises £1.1M on Crowdcube

chip

Saving chatbot Chip wants to get a banking license

Fintech app Chip, a chatbot that helps users automatically save money from their bank accounts, has secured £1.078 million on crowdfunding platform Crowdcube.

Chip is plugged into users’ bank accounts, and leverages an AI system to calculate an ideal amount of money to put aside every day. Customers can also interact with the service through a chatbot app on iOS and Android. (Chip’s model is similar to other UK-spawned ventures such as Cleo and SHACK15 resident Plum.)

Founded in August 2016 by Nick Ustinov and Simon Rabin, Chip claims to already cater to 30,000 active users , who are “collectively saving millions a month.”

The new infusion of cash—raised as part of a £2.4 million round—will allow London-based Chip to request a banking license, which will give it the opportunity to provide a wider range of financial services.

That does not mean that Chip is aiming at becoming a paid-up bank itself, though. Even after the advent of the Open Banking reform in the UK next year, the startup will still piggyback on users’ existing bank accounts.

“In order to offer the customer a 10x better product experience, you can’t just resell them the existing market. All that makes you is a slightly better money supermarket!” Chip CEO Simon Rabin explained to TechCrunch. “We learnt this summer that customers love the smart credit functionality but we can’t make it viable within the existing wholesale funding market”.

But for instance, a banking license would  allow Chip to lend out a part of its customers’ deposits, in order to offer investment opportunities, or some form of overdraft at convenient interest rates.

(In fact, Chip has already kick-started a beta version of an overdraft feature, which is fuelled by reselling financial products— a much less streamlined system than using customers’ savings would be.)

Rabin added that, once Chip gets the license, it will be able to create the “best savings account in the world… that helps you save, lets you earn best rates in the market, reduces costs on borrowing”.

 

Image via Chip/Facebook

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