Hi Gene, nice to meet you. Can you tell us about your background?
After 10 years in finance in New York, I moved to Canada, got my MBA and settled here in Montreal. I started several business in the US and Canada before working on Perfiqt. One of my key strengths is the ability to quickly grasp the conceptual framework of very complex systems to see what’s important. It’s been a great asset to analyse personal finance industry.
In Canada, we built powerful financial software for advisers. To my surprise, I learned that most advisers were just salespeople for mutual fund and insurance companies. Their advice always boiled down to the same blind recommendation to “save more, save early, don’t spend – invest”. That makes sense for them because that’s how they make money. But we saw thousands of people who got screwed because of that one-size-fits-all advice.
I had high hopes for robo-advisers, but they used new technology to streamline just the selling part of advisers’ jobs, doubling down on the same “save more, save early, invest” push. Big banks had even worse service.
I saw a sad picture. The finance industry is fine-tuned to make profits instead of helping you. Finance is complex, which makes it harder for you to realise when you’re being screwed. The stories of people who lost their savings were heartbreaking.
It was hard to stay uninvolved, so we came up with a simple idea of how to shield millions of people from financial abuse: instead of better advice, give them the information. Fast and free access to unbiased actionable information is powerful. When you know, you are less likely to be screwed. You can question your adviser, robo-adviser or banker. You can see if you’re off-track and start making corrections earlier, whether you need to save more or to spend more (yes, for some it’s a better option). We opened our powerful financial software to consumers and it became Perfiqt.
What is Perfiqt?
Perfiqt is artificial intelligence that uses gamification to simplify finance. After two years, we found a way to turn hours of advanced financial planning into just minutes of fun and engaging process, that’s easy enough for any user regardless of their financial knowledge.
Perfiqt can help millions of people answer any financial question, personally – no “it depends” answers, no general guidance or “rule of thumb” advice, no sales pitches. In fact, to avoid bias we don’t provide any advice at all. Just the information.
This turns traditional financial planning upside down. Instead of building better system for advisers to learn about you and your life, we built a system that simplifies finance for you. You already know your life better than anybody. Combine that intimate knowledge with clearly presented, unbiased financial information, and you have everything you need to start making smarter decisions yourself. Buy or rent? Pay off debt sooner? Invest? Travel more? Information is the best shield from financial abuse, and that’s what Perfiqt gives people.
What’s your current funding strategy?
We’ve been mostly self-funded, but we also took some investments from financial industry veterans who are serving as advisers to Perfiqt. We just started fundraising for a bigger financing round and see a very strong interest from investors. We’re looking for investors who align with our mission and can be good strategic partners.
What’s your opinion on financial education websites? How effective are they in this situation?
Essentially, they’re just a more convenient alternative to reading a book or taking a finance course. Though useful for some, they’re too broad, too impersonal and take more time and effort than most of us are realistically prepared to give. We want to optimise our finances to live more fulfilling lives, not spend hours reading countless blogs, trying to separate good information from the flood of sales pitches disguised as “expert advice”.
Do you want to take a course on car mechanics when you come to a car dealer? Most people don’t – they just want a car. It’s the same with finance: people want benefits of financial products. They want to travel more, buy a house, raise kids and retire sooner. Most don’t want to spend hours learning about “time value of money”, volatility, budgets, investing, and so on. But that’s what financial education websites ask them to do.
Even the very successful websites that bring financial education to a specific market niche, such as Amanda Steinber’s DailyWorth, Sallie Krawcheck’s Ellevest and Alexa von Tobel’s LearnVest – even they have a limit on how personal and relevant they can be with their generalised content, leaving millions of people with unanswered questions. So, financial education websites can be useful for some, but they’re not the best solution here.
You mentioned that you didn’t like the quality of the services offered today. Do you position yourself against banks, advisers and other incumbents?
No, we don’t fight against banks or advisers – we fight against the abuse in the system. Great advisers and banks who really care about their clients actually welcome the tools that provide more information and promote transparency. Our missions are aligned here and we will do whatever we can to support them in their efforts to serve people better, whether they are our partners or not. Have a look at Desjardins advice section, for example – I really like this amazing initiative by a big bank.
If you use fear, confusion and appeal to authority to sell products that benefit you at the expense of your clients, then Perfiqt may be a direct threat to you. We’re giving people free and easy access to unbiased information to empower them to stand up for themselves. An informed person is much harder to trick.
How far are you in the product development cycle at the moment? Have you set a beta release date?
The product is in beta. We test it in batches and may restrict the access for certain geographies for now.
Do you see other markets for Perfiqt outside of the B2C realm?
Our mission is to help as many people as possible, even if they’re not our clients. We’re open to working with other businesses who strive to serve their clients better. That would be a B2B2C model for us. We have a tremendous interest from many financial institutions that align with us on this mission. We’re testing this model with a few financial firms already.
Will financial advisers still exist 15 years from now?
Those who simply distribute financial products … no. They add little value at super-high costs, so they will be gone. Most advisers fall into this group. Financial advisers who provide advice – they will survive and prosper in small niches, as more advice can be automated. Their success will depend on how well they can evolve technologically to gain efficiency.
What’s your take on AI and the attention it gets from the media?
There’s a lot of buzz surrounding AI, and often people change the meaning of this term to fit a specific story. Unfortunately, we see many examples when ‘AI’ is added just to have a better appeal to investors and press. For Perfiqt, the core is our ultra-powerful financial algorithm. Think of this question: “Should I buy or rent?” What minimal set of variables would you need to answer it? Why? What exactly would you do with them? Perfiqt can easily answer this and hundreds more questions. Our financial algorithm can process thousands of variables, build new data sets and find relevant insights there for each user personally. We can do what no one else can do for now (you can read great influencers Michael Kitces, Bill Winterberg and Daily Fintech for more on this). This gives Perfiqt a huge advantage over other players.
What’s next for Perfiqt?
Well, it’s never been possible to scale advanced financial planning before – it’s just too complex and takes lots of time even for finance professionals. Now that we have the solution, it opens up lots of great opportunities. “Personal Virtual Banking Branch” that’s custom-built by you, for you, in minutes, is one such opportunity.
See, with Perfiqt, you can quickly build your own trusted online gateway to the world of money and finance: you can visualise your life and plan for life events; learn about finance; get unbiased information as the ammunition from predatory finance “experts”; see where you are financially, decide where you want to be and what actions or financial products could help you get there faster. All of this is super-easy, fun and takes just minutes. That’s the functionality we already have today. And the best part is that this personal ‘virtual banking branch’ can easily fit into your pocket!
Later, Perfiqt can do more to help you execute on your own strategy. It can help you buy products and find specialists, whose objective is to help you along the way, not to sell. You can read their reviews and ratings before picking one and if you ever have a problem – we’ll be there to help.
Millions of people need this. Eight out of 10 millennials have at least one urgent financial question. That’s 60 million people in North America. It’s the No 1 reason people visit a branch or consult an adviser. And soon they will have a much more convenient alternative: their personal fully-staffed virtual banking branch. That’s Perfiqt!
Still, our mission is to help users, so they will have a huge say in what services Perfiqt eventually offers. For now that’s what they ask for, so stay tuned for the Perfiqt Virtual Banking Branch!