Fintech wants to make you feel better about where you spend your money

There’s a new crop of companies using data to give woke millennials the information they need to be the good, upstanding people they want to be. The values based banking and investment startup Aspiration launched an impact measurement tool this week that scores how they're spending money based on what businesses they're paying from their checking account: Are they ethical, sustainable and overall, "good" businesses? “It’s been very clear for a long time that consumers, especially younger ones, have been searching for a way to realize how they can put their values into action and line up their money with their own beliefs,” said CEO Andrei Cherny. Obviously, that alone is not a sustainable business model, but the company said it has big plans for scaling and using customer data for more. Cherny said it’ll continue innovating the product as it gets access to more of that data and companies feel more pressure to align with customer values, but he can’t say how yet. When asked about the possibilities for pushing ads and offers he maintained that in its earliest stages, the company will be focused on using customer data to learn what they want and what they value. Aspiration studies more than 75,000 data points to measure human and environmental rights, including the amount of pay employees receive, the ratio of employee to CEO pay, healthcare benefits, quality of those benefits, representation of women on staff, percentage of female leadership, greenhouse gas emissions, renewable energy use, carbon footprint and waste reduction. It then produces a score of one to 100 that shows users the impact of their spending and allows them to track their improvement. That may be its differentiator and the thing that keeps its users active. People consciously trying to break old habits and create better ones tend to be motivated by self improvement and become addicted to the work when they see positive results. In that sense, technology and data can do for personal finance what it did for fitness -- just look at how FitBit and the Peloton bike have contributed to the fitness boom of the last couple years. That aspect could be the one competitive advantage this particular fintech startup has on big banks, who have no real reason for customers to keep coming back. “The main financial companies in America started focusing more on wealthier and wealthier clients -- they make more money that way -- so the way they serve ordinary people has been refocused,” Cherny said. “It’s not that they aren’t serving people, they're just not serving people very well. The product they bring to ordinary people has been substandard. Our approach is to focus on great products whether they're low income status or multimillionaires.” Aspiration has been working on the AIM product for more than a year, Cherny said, but the overall response by people to the outcome of the Presidential election has pushed questions about personal brand and value to fore, making the company’s work “even more relevant,” he said. In some ways, the election and its aftermath has breathed new life into so-called values based banking. It also represented an opportunity to be more aware as a nation, said Megan Hryndza, CEO of Mighty Deposits, a platform built to highlight mission-driven banks for people who want to know how their money is lent. “Collectively, money can get things done. There will be more than ever a receptive audience for understanding they know where they spend their money matters but where they keep their money matters too,” she said. “Mighty is further looking to see where we can deliver on opportunities without people having to wait for the next vote, by bringing a platform for action and influence everyday.”