In 2015, Thomas Smyth had a bit of an epiphany: So many of the personal finance apps out there do the same thing—but it was still hard to take the next actionable step. So he co-founded Trim, a personal financial assistant powered by AI that helps users cancel subscriptions, contest overdraft fees, negotiate bills, and stay on top of their financial lives. Plaid’s Carl Tremblay sat down with Smyth to talk about inertia in personal finance management, the power of starting small, the role of chatbots in fintech, and more.
This interview has been edited for brevity and clarity.
CT: So where did Trim’s beginning and its mission really start?
TS: I find that most folks do their best to avoid personal finance whenever possible and are reluctant to engage deeply with their own transaction data because they’re scared of what they might find. The easiest way to avoid breaking your budget is just not to know about it, right?
But my friend and co-founder Dan Petkevich and I thought it would be interesting if we could avoid the problem of having the user do all of the work, and instead build an assistant that would actually engage in some action on your behalf. When we started looking through our credit card statements, we noticed that we each had subscriptions that we had been paying for but not using, which we had meant to cancel for some time. In my case it was a Hulu subscription I’d signed up for as a free trial and forgot to cancel, of course, after watching one TV show.
This seemed like a very small but very concrete way that we could help people organize their finances. Rather than just telling people, hey, here are your subscriptions, we would actually cancel something for them. We tested this on our friends, who found it very gratifying, so we dug in and launched in November of 2015. And to be honest with you, on our first day of operations we were not fully automated and worked frantically over the next 72 hours, and then we were ready to scale.
We also realized that this pattern—user comes in and shares financial transaction data, assistant analyzes this data, assistant performs some action on the user’s behalf—is generalizable across a whole litany of use cases beyond just subscriptions.
CT: Over the past year or two, fintech has given consumers better visibility into their finances. Subscription management is something that seems to be on the rise and a very hot topic at the moment. How do you view the larger competitive landscape, and how will you continue to differentiate Trim in the market?
TS: You are seeing a massive shift from personal financial management 1.0—with static apps like Mint.com, Credit Karma, and NerdWallet, which do amazing things for millions of people but require you to log in or visit their website—to personal financial management 2.0, which is about dynamic assistance.
Most consumers don’t want to think about their personal finances. Most consumers don’t want to log in. And so if we can take a lot of that cognitive burden and shift it onto this AI-powered assistant, we see that as this huge, huge, huge opportunity. We have a significant head start, but there are many, many startups trying to tackle this.
CT: You guys have analyzed tens of thousands of people’s accounts. What have been some of the things around subscriptions and services that people are really surprised to find are there or have had a really hard time grasping?
TS: The way people spend or misspend money and get hit with fees—whether it’s overdraft fees, or late fees, or interest charges—is incredibly daunting. What we’ve seen basically is that consumers are just getting fleeced in a whole variety of ways. And it makes sense, when you think about it, because any mildly tech-enabled company has a whole team of data scientists working to maximize revenue or bringing in consultants that can perform that same service. So as a consumer, while the other side is optimizing, you are not optimizing. An assistant like this can act as a kind of consumer advocate and help to identify ways that you’re getting ripped off and then fight back.
CT: What have you found to be some of the trickiest challenges, whether technical or product-wise, to help build the service out over the past year?
TS: To be honest, it’s user comfort and familiarity with connecting their financial accounts to our service.
CT: And what have you found to be good ways to ease that burden with the consumers?
TS: I think having a trusted brand vouch for you helps a lot. When we were mentioned in The New York Times in a lengthy column, people had much less of a problem connecting their accounts because Ron Lieber had gone through the process himself and said, hey, I’ve done this, this is OK.
CT: And so much of the difference comes from the how the user interacts with the service in the first place.
TS: Yes, we think about what’s easiest for the user and what offers that lowest-friction opportunity for a user to get the information they really need. When we started, it seemed like there was this great opportunity in messaging that people hadn’t really understood or taken advantage of. And indeed something that our users love is that they get their daily updates via SMS or Facebook Messenger in a very frictionless way. And I think that’s been critical to our growth and our consumer retention so far, because people prefer that to a traditional app model or a desktop site.
CT: But you have now released a desktop site. How do you see engagement across the two different platforms now?
TS: Basically we only ask people to log in if there’s something important or if they need to see a lot of information all at once. So you can think of it like the day-to-day happens through messaging and the week-to-week through a mobile-optimized website.
CT: Interesting. And how do you think about the emergence of chatbots as a core piece of what you’re doing? What is Trim’s role in continuing to build on and fuel that movement?
TS: Facebook Messenger’s launch of its developer platform last April was really critical in developing the whole ecosystem because the platform is so robust and user-friendly. They’ve spent a ton of time and a ton of resources making it into this really phenomenal experience. Since April, the onus has been on developers to build cool stuff on top of that. We’re lucky to have gotten in early and spent a lot of time thinking about it, and we all use Messenger daily for our own Trim consumption. It’s our number-one focus.
You’re starting to see more and more developers who treat Messenger as their primary focus for development, and those apps are getting better and better and better every day.
CT: I’ve seen that you have an auto insurance service now that helps people identify better opportunities compared to what they already have. How do you see your relationship evolving with billers and subscribers themselves?
TS: We hear from users all the time that they appreciate that we found all of their subscriptions and recurring payments and canceled the ones they don’t want anymore. Then they want our help lowering the ones they can’t get rid of. So we’ve been working on building out a couple of features to help lower the cost of recurring payments that you can’t just cancel.
So our recent launch of the bot that negotiates with Comcast for you is a really good example of that. Most people cannot just get up and cancel their Internet one day, but I think we can all agree that we would love to pay less for Internet and cable. So the more that we can build features that help people save money on an ongoing basis, that’s really exciting to us, and that’s definitely what our customers are clamoring for.