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Summer is here and the end of Q2 2017 is upon us. That means it’s time for the second installment of our Fintech Data Innovators series, in which we highlight businesses that are doing exciting things with data. This quarter we are taking a look at companies from online banking, credit risk analysis, and car insurance. Let’s dig right in:

Online B anking: Chime

Frustrated with banking fees? I know I’ve paid $36.50 for a Snickers bar because I overdrafted. And the data suggests I’m not alone: Traditional banks made an estimated $33 billion in overdraft fees in 2016. If we zoom out on banking fees in general, we’ll see that the average American household pays $290 in bank fees per year.

Enter Chime, a mobile first, FDIC-insured banking platform that aims to enable consumers to grow their savings by cutting out banking fees and automating savings in a number of ways. Chime offers a debit card, which can be used to withdraw cash for free at over 24,000 MoneyPass locations, and a fee-less spending account that does not allow overdrafting. In addition to cutting out fees, Chime automates saving by rounding up purchases to the nearest dollar and depositing the remainder into a saving account. You can also automatically save up to 10% of your paycheck.

Unsure how much in banking fees you’re paying? Take Chime’s Bank Fee Finder platform out for a spin. After you sync with your bank accounts, Chime parses through your account data to determine how much you spent on ATM, overdraft, monthly, and other fees such as transfers and foreign transaction fees. It then provides you with a report breaking down your fees and comparing them with the national average. This is an interesting example of how aggregated financial data can be used for marketing purposes. By actually displaying how much you’re paying in fees across your bank accounts, Chime can subsequently deploy a highly effective, data-driven call-to-action to use their products.

Credit Finance: Lantern Credit

Determining credit worthiness is the name of the game for lenders, and it’s becoming increasingly apparent that traditional credit scoring systems such as FICO can be enriched by analyzing alternative data. Lantern Credit, which aims to improve the inefficiencies of the credit industry for institutions and consumers alike, does just that with the use of machine learning.

On the consumer side, Lantern uses machine learning to parse financial data to give users a better understanding of their creditworthiness, prescribe ways they can improve their credit score, help them find better interest rates, and predict if they will be approved for a loan or credit card. They can also make payments to creditors directly through the Lantern platform.

For lenders and retail creditors, the Lantern platform can be white labelled and used to make more informed credit decisioning by better predicting risk and loan defaults. According to Lantern Credit Vice Chairman and former Apple CEO John Sculley, banks have massive amounts of consumer data at their disposal but they only use 1-2% of it to make credit decisions. Lantern aims to harness the other 98% of “data exhaust” to better inform underwriting.

Car Insurance: Root Car Insurance

The data-collecting power of the modern cell phone is incredible, with sensors such as gyroscopes and accelerometers creating all kinds of interesting data points. Root Car Insurance, an Ohio-based insurtech startup, is collecting telematic data from drivers’ cell phones to assess good driving behavior. Applicants deemed to be “good” drivers are then able to access insurance at low rates.

During the insurance application process, applicants drive with the Root app installed on their phone for two to three weeks, during which time Root is able to measure crucial driving behaviors such as acceleration, braking and tailgating patterns, swerving, lane changing tendencies, and distracted driving. (We live in a brave new world!)

By creating a more data-driven picture of an applicant’s driving behavior, Root is able to keep its rates low. Root claims that it is able to cut insurance rates in half for the top 30% of drivers, while offering the cheapest rates in the market for the top 70%, saving drivers an average 20% on the typical insurance policy.

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