How much do apps know about your money?

“You are losing ₹3,638 every year by keeping your money idle in your savings account. Click to know more!” came an automated email to the Gmail inbox of a user of INDmoney, an advisory fintech. “Loss of ₹12,50,460 Identified. Switch to XXX fund,” was another automated advice from the same company with a mutual fund switch suggestion.

FinTech apps know a lot about your money and it is not limited to the transactions done through that app alone. Upon installation, these apps seek permission to read your emails. Once granted, your dashboard reflects a neat consolidation of all your investments in one place. Then begins the analysis of all your email-linked savings and investments.

As a user of such apps, is your sensitive data at risk?

“One way to automatically offer advisory is to connect your Gmail account with the application. But that is really restricted to a very small white-listed emails and not to all your emails. Typically all of this is anonymized and no one is reading. Even for the machine it is all anonymized but the output and the magic is usually disproportionate benefit to the users,” said Ashish Kashyap, Founder & CEO, INDmoney.

Aditya Agarwal, founder of Wealthy.in, another app-based financial management tool concurs. “We follow a 20-point Google audit process on which we spend $25,000 every year to get us re-verified by Google-appointed security agencies…Data is encrypted end to end,” he said.

Not all tech-enabled financial products offer advisory. Groww, another FinTech app only offers information on financial products and a platform to transact. “We give zero advice on the platform. We clearly say that if you need financial advice, there are very good financial advisors in the country. We give all the information in a transparent way to our customers so they can make their own investment decisions,” Lalit Keshre, co-founder & CEO, Groww said.

Keshre also gave his reasons for not offering advisory. “People are different. A mutual fund that’s good for you may not be good for me. People have different risk profiles, different time durations and risk tolerance is very different. Personalised advice is very difficult for internet platforms,” he added.

Kashyap disagrees. He said machine algorithms can create magic that humans cannot. “What actions should you take without any biases and even without any emotional biases is something best done with machines and best done with (machine) rationale and logic. I strongly believe that a human being cannot solve this problem.”

Wealthy offers a hybrid model. Part machine, part human. “We have a human interface too, if customers need it. Human wealth managers explain why an investment solution is right for you instead of helping you find a solution. The application will automatically offer an output to you but a human will help you understand why that solution may be right for you,” Agarwal said.

FinTech apps are leading the unicorn boon today. As per a study by Orios Venture Partners, 11 out of 44 of India’s present and past tech startups valued at over a billion dollars are from the FinTech space. Rehan Yar Khan, the managing partner of the venture capital firm believes there will be more startups in the FinTech space. “Indians were largely unbanked for a long time. Lending, payments, wealth management services were not big. Fintech is filling that gap. It is an ocean and more startups will emerge to fill that space,” he said.