Tag Archives: Flexscore

Fitness apps are great model to help consumers talk about money

Eric DunstanThis past weekend I attended a beach wedding in Santa Cruz, CA. I played the role of husband to the matron of honor and father to the ring bearer. I spent a lot of time with the groom and groomsmen as we waded through the schedule from taking pictures to the bride walking down the sandy aisle. Having never met 90% of these people, most of the idle conversation topics focused on how long we’ve know the groom/bride, where we’re from, the weather, sports and physical fitness.  The wedding party was a very physically fit group and a lot of time was spent discussing work out routines, fitness goals, injuries, metrics for measuruing those goals and what mobile fitness applications were used. One groomsman was a tri-athlete, another a cyclist and several runners…me included. Even though we all did different sports, we all shared a common language around how we set goals and measured success; how many reps/sets, timed distances, time splits, calories burned. Of course, as the day wore on and the drinks flowed, these reported metrics achieved super human status. “I ran a marathon in under two hours, backwards…uphill both ways. In the snow. Waiter, can I have another Grey Goose?” The common interest and shared vocabulary of fitness enabled 8 guys to have a great time at a wedding.

There continues to be a lot of media coverage about our lack luster economy and the fear that many people have about their financial fitness. The fear has grown to a level where many books, websites and personal finance management services have emerged to meet the demand. Clearly, money and sound financial management is top of mind for most people. Unfortunately, talking about ones financial health is a taboo that it is never discussed openly even with close friends or a spouse. I openly discussed my physical health at the wedding last weekend…but it would be WEIRD and AWKWARD if I discussed my financial goals and health with the other groomsman. Why? Isn’t financial health just as important as physical health? We ask others for suggestions on improving our physical fitness.  Why not our financial fitness?

Alexa von Tobel, CEO of LearnVest, addresses the taboo of talking about personal finance in her book, “Financially Fearless“. “We openly talk about everything else, from sex to diets to politics, yet when was the last time you spoke with your friends about money?” I think Alexa is spot on. We as a US society DON’T talk about money and how to manage it well. Most Americans prefer to put their heads in the sand and not think about financial planning for it’s too scary or confusing. One of the biggest reasons we don’t talk about money is that we don’t know how and we don’t have a common vocabulary or framework to pull from.

Eric Dunstan

Flexscore is working to provide that financial framework to enable the conversation. They have developed a methodology that helps consumers assess their financial health through a score and provides support for how to improve. The score measures factors including assets, debt, savings, cost of living, retirement savings…and weights them against a goal. Goals include by what age to retire, buying a vacation home, or sending a kid to college. Flexscore users can compare their goals, expenses, and scores against others within their peer group.

What Flexscore is developing sounds a lot like a fitness app! I am an avid user of the Nike+ iPhone app where I set goals, track fitness activity, achieve milestones…and compare against others. The Nike application also let’s me challenge others to a race or to ask others for coaching advice. Wow, this is a fun way to track fitness activity and engage with friends. Can the same level of engagement be achieved with a financial fitness application? Through the right approach, I think a financial fitness application can be very powerful in helping others discuss money, goals and questions they may have about improving compared to their peers. A scoring system, such as Flexscore, will be a key engagement element that makes measurement informative, fun and something that can be easily discussed with others.

I don’t think it’s a stretch to envision similar personal finance discussions happening with the right measurement tools and applications developed on mobile devices. Going back to the wedding I attended, the wedding party was quick to whip out their phones and show off their fitness data on Nike+ or RunKeeper. The application UI makes the data visually fun to show off and discuss. I can easily envision the same conversation happening around finance applications. The conversation could start with a groomsman saying, “We are really trying to pay down our credit card debt, but it’s not happening fast enough.”  Another groomsman could respond, “I’ve been using this great finance app that scores my financial health. It’s helped me A LOT.”  The conversation goes on from there.

Driving adoption of these finance apps by going direct to consumer will be quite expensive and the marketplace is crowded. However, I think the right strategy for Flexscore is to white label their solution to financial institutions and advisors. A similar platform, Set for Life,  takes another approach by white labeling financial education and money management tools to corporations as a benefits program to get employees to start talking about their money. Flexscore and Set for Life hope to pull through a solid customer base through these white labeled partnerships …while receiving a monthly per user fee. Smart…and this strategy does not require aggressive and expensive direct to consumer acquisition programs. The right clients and partnerships will build a large and highly engaged consumer base for both companies.

As Gen X , Gen Y and Millennials age, the greater the momentum around having financial oriented conversations. The key play for companies like Flexscore or Set For Life is to be the platform that these users engage on to discuss and engage with their finance. Consumers will benefit and so will financial institutions and advisors who are looking for opportunities to engage customers. Consumers will be drawn to the banks and providers who do this best.  Those who don’t engage at this level will watch  their consumer base walk out the door.


Flexscore makes it easy for consumers to evaluate financial health

Earlier this month I got an email from Credit Sesame enticing me to return to their site and see how my credit score has changed. I created an account over three years ago when my wife and I were in the hunt to buy a home and needed a sense of our credit score to get pre-qualified for the loan. However, after we got approved, we’ve had little need to check our score again…until I got the email from Credit Sesame with the subject line “see how your credit score has changed.” The competitive side of me was immediately activated and I logged into Credit Sesame. Fortunately, my score went up….however I do not know why. Beyond the home purchase, my credit activity has been the same as it ever was (Talking Heads anyone?). If anything, the cash component of our financial health has become softer AFTER the purchase. Credit scores don’t measure financial health…only credit worthiness…using a process NO ONE UNDERSTANDS! Beyond affecting the ability to borrow, the credit score has a limited use.

We are all engrained in the United States to care about our credit score. We all know our own score (roughly) and understand the influence it has for us to borrow money. However, the score fails to measure other important factors that influence how much money we can borrow: cash on hand, savings accounts, equities, retirement funds, etc. These are all factors that define our financial health. However, there is no similar scoring tool to help us measure our financial health. I think a financial health score would be much more relevant for consumers as it is a data point that helps discern where they stand in relation to life’s big financial pressures including qualifying for a loan or understanding how much money they need to retire.

Screen Shot 2014-05-21 at 1.51.15 PMFlexscore is a innovative FinTech company that is trying to do just that; provide a service that gives consumers insight into their financial health through one score. Their consumer site is now live and they are touting a base of 30K users.Aside from the challenges, Flexscore has even greater opportunities ahead.

The potential big win for Flexscore is their unique ability to build a technology that produces a “score” relevant for consumers, financial planners AND financial institutions. Flexscore recently presented a new solution at FinovateSpring that helps financial planners provide this score to their clients. This is interesting for it gives the advisor and client a unit of measure that they can BOTH understand.Yes, it may be a challenge to get enough advisors to adopt the Flexscore and trust the methodology behind it. I think there is opportunity here for Flexscore to gain traction if financial advisors at banks and lending institutions adopt the scoring.   By engaging customers in conversations about their financial health, banks are able to build deeper customer relationships and their pool of potential clients to lend to. Remember banks make their money off mortgage lending. This deeper consumer relationship will also ease the torrid lending process for the bank will have record of the consumers’ financial health and documents on file. Banks will be lending to a known and assessed borrower….insuring a much faster approval process. A faster approval process means a happier customer!

Screen Shot 2014-05-21 at 1.48.23 PMI’m envisioning a financial advisor saying, “Mr. Dunstan, if you achieve a Flexscore of 780, you will be qualified for a great mortgage or refi rate of X%. Let’s see what we can do to get there.” Boom. The reason for having a Flexscore is directly relevant for me as a consumer….and I’m now engaged in a relevant conversation with my banker. This conversation becomes a collaboration in which the bank is “selling” me another loan. Another conversation could focus on my retirement planning with my bank’s financial advisor. “Mr. Dunstan, to retire at 65, you need a Flexscore of 950. You are a ways off from 780. Let’s see how we can get you to your goals.” The Flexscore is now the centerpiece of all future financial planning discussions and compass to the banking products needed to achieve the goals.

By enabling banks to make more money off their customers, Flexscore can quickly drive adoption of its more complete financial health scoring method. Banks will pull consumers through the scoring process for it’s relevant for conversations already happening. Consumers are well primed to understand the relevance of this score and may even take action to improve with the right incentives. Hmmm….I can feel another blog post brewing about gamification of this process. However, if Flexscore decides to push this score directly through the consumer channel, building adoption and relevance may prove more costly. As we know, driving consumer awareness and adoption in this noisy world will be expensive for them. Additionally, convincing a typically very tepid consumer to care about their financial health “score” will be challenging too. Remember, consumer adoption rates for personal finance management solutions are typically very low (sub 5%)…which means getting consumers to engage with their money is REALLY HARD.

Keep an eye on Flexscore. I think with the right partners and clients Flexscore could redefine how we as consumers evaluate, measure, improve and discuss our financial health…and with so few Americans adequately prepared to retire, these conversations need to be had earlier in life.


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