Stretching the retail financial institution’s (FI) mission beyond checking account and debit card management is on that industry’s agenda. It’s what fires the imagination of fintech entrepreneurs too because retail financial services is an industry in need of creative, expansive approaches to accountholder services. Not every idea catches fire but fortunately there are those willing to light a match.
This Payments on Fire podcast looks at Sensibill, a digital receipting and data repository service for FIs. Join Glenbrook’s George Peabody and Sensibill’s CEO and co-founder Corey Gross in this discussion of how an FI can help its accountholders turn digital receipts into data far more useful than what’s on a statement or that piece of paper stuffed into a purse or wallet.
Transcript below the jump.
George: Welcome to a Payments on Fire podcast. I’m George Peabody, a partner with Glenbrook Partners, and one of the pleasures of producing Payments on Fire is the people I get to speak with. I’m particularly delighted when a listener gives me a shout to say “Hey, you know you’ve got to talk to this guy or that gal about what they’re up to.” Today is one of those days. I’ve got Corey Gross who’s the CEO and co-founder of Sensibill, a digital receiving service for financial institutions. Welcome, Corey. How are you?
Corey: Very good. Very excited to be here.
George: Thanks for joining me today; I’m glad you’re here too. My quick capture of what Sensibill is about and what you’re up to is you’re a service that helps bank customers capture their receipts and store all the associated data that might run with the transaction. It can be taken with the idea that I buy a new tool, and I can keep the warranty information with that transaction somewhere. I think that’s pretty interesting. I assume that’s available to me by my bank’s portal. Is that right? Is that how it works?
Corey: That’s right. It’s designed to be a service for mobile and online banking users that is a value added service built within the future of mobile and online banking to engage the digitally connected customer. So we’re another piece of that equation.
George: So this is kind of a new angle for me, and certainly a new proposition with the financial institution’s app or website being a portal for that level of service. Does this feed into a bank’s personal financial management (PFM) service? What’s the deployment look like? What does the customer experience end up looking like?
Corey: What we wanted to do right out of the gate is just provide the basic capability of I shop at a store, I have an important receipt that I want to keep track of for returns, maybe expenses, taxes, or warranties – those are all good use cases – and ordinarily I’d have to use a third party application, maybe I have a physical filing system that I use, but with banks having a lot of consumers’ financial data, it makes sense to us to really add that extra layer of information, that line item receipt detail with the rest of the spending data. It does act as a tool for giving you more granular information on how you’re spending your money, so in that way, yes. It is a tool for personal financial management, and the data that we collect does feed into other PFM tools using our APIs.
George: Great. How do you collect warranty and line item detail information? Is it all based on me using the camera in your app on my phone, or is there other magic that you’ve got going here?
Corey: A combination. The happy path, the utopian past is the one tap experience. You pay, or you tap your card or your mobile phone, and magically, all the receipt detail appears in your banking application. And actually, that does work using our service at a subset of merchants who have that level of integration at their stores. Home Depot is a good example of a store that supports the happy path. You can tap your card, your card is linked to an identifier, that identifier knows how to get that receipt to your bank account, and voila; you buy a power drill and that power drill with all the other receipt detail will end up in your bank account, possible matched up with your Visa statement and your MasterCard statement – whatever. Right now we’re also intercepting email receipt data. This can’t just work at brick and mortar locations, it has to work with online shopping, mobile shopping, you have to think about all the email receipts that you get.
Corey: That’s correct. Then the camera capture makes up the balance. You’re always going to probably need to capture physical receipts, because there’s no such thing as a sort of ubiquitously digital experience yet. You want to allow the customer to be able to capture everything, not just the subsident data.
George: It’s real interesting that the Home Depots of the world has this API that will actually share the SKU level data with you. Anything special that you have to do to make that happen? I imagine Home Depot has to build the API; what kind of promises do you have to make to Home Depot about sharing this data?
Corey: By the way our ecosystem works, we don’t have to work with any major merchants. What we do is we rely on the fact that they already issue email receipts. So Home Depot, obviously a lot of the major department stores like Bloomingdale’s of the world and Nordstrom’s of the world have been issuing e-receipts for some time, but what they’ve also started doing is tokenizing people’s cards, and linking those email addresses that they’re using to get receipts with those cards. So they basically, by virtue of the way their systems are set up, have provided a way for you to have that one tap experience. What Sensibill does is capture those receipts and make them available to you.
George: For you to inspect my Gmail stream, I’m giving you my credentials there?
Corey: It’s basically a sign-in with Google or Yahoo, the same way you allow a sign-in with Google on other third party applications; we work the same way. We also, through the FI’s (financial institutions) that we work with, provide the customer with a vanity email. So at a major bank, like Scotia Bank, you would get an email address, that’s really not a usable email address, but the domain might be coreygeorge@scotiabankreceipts or scotiareceipts.com, and you can use that as a way of routing your receipts to your account. For folks concerned about privacy and exposing your email address to a retailer that might just fan them, it’s a way of making sure you get the receipt, and either opt into the marketing messages or opt out.
George: I’m certainly seeing more and more tablet based systems who invited me to enter my email address. That makes sense to me. Let’s just get some of the basics out of the way. Can I have credit cards that are from other issuers registered within the bank portal and your service?
Corey: So, our service is totally tender type agnostic. You could pay with cash and capture a receipt with that. Our mission, and really our view on this was, as a customer of a bank, even though you have a card or two cards from that bank, you’re going to use that bank for more than just payment. You may use it to pay bills, to check in and export your transactions for taxes, you really rely on your bank as a source of information. We want to allow our user, and not restrict our user to data to data that is only coming from cards that are linked to that bank. So you can have receipts across any payment type; you don’t have to register the other payment types, it’s just a function of whatever receipts you capture with that bank offering receipts, you’ll be able to view those receipts from that bank. There is a centralized portal within the bank for just receipts, and you’ll be able to filter your receipts by payment type or search for receipts in respective of how you paid.
George: Got it. I’ve just signed up with Expensify, and they, of course, were asking for my log-in credentials to one of my card issuers, and they pulled the last two or three statements to get me started. Is that something you could pull into this as well, or am I really working from the receipt only side?
Corey: We figure a lot of that data is already at the issuer, so we don’t really need to pull that data.
George: What about from another issuer? I guess that’s what I’m trying to poke at.
Corey: The concept of data aggregation is one that I know certain banks have anxiety about.
Corey: I think we all know which one; it has been written up recently. I think the way we see it is there will be a day where banks will want to provide services that make the customer want to experience better and solve customer pain points. As long as they don’t, people are going to use third party services, like Expensify, like Yodlee, like Mint to accomplish those goals for them. Because we’re API based, we can support whatever feature set our partners want to expose to customers. If they want to bring in data from other banks, and expose it in their portal, we’ll support that and we’ll match the receipts to the appropriate statement. Right now what we do, is if you’re a Scotia Bank user, and you’re paying with Scotia Bank cards, we’ll link those receipts up to your card transactions straight from Scotia Bank. So if you bring another transaction statements and other transaction histories, we’ll be able to match receipts up to those cards statements appropriately as well.
George: What’s in it for the bank?
Corey: This was actually not a solution in search of a problem. The way Sensibill was founded, was our initial partner banks were looking for ways to add feature functionality to mobile wallets and mobile payments, so that it wasn’t just a replacement of the card substrate, it actually added additional value or loyalty, through receipts and gift cards and so forth. Engagement with digital channels was the primary motivator here, and as we’ve seen through multiple pieces and business cases that have been written by banks recently in digital engagement, there is a massive business case around engagement and retention for digital and increasing the digital experience. Those customer have a much lower attrition rate, they’re more likely to use multiple products from a financial institution, and using the data that Sensibill provides to these financial institutions, you can contextualize and personalize those financial products to the right people; you’re not just spraying and praying. You might be able to see that I shop a lot at Home Depot buying power drills, buying drywall, buying wall studs, and I might be going through some sort of home renovation project. You have access to all of my balance information, now you might be able to offer me a line of credit to reduce the financial pain of going through these expensive projects. So we provide a lot of tools for banks, not just to engage the customer through receipts, but on the other side, use that data and create actual campaigns off of it. So that’s one of the largest business cases for the FI, and other business case is around call center cost reduction. So if you think about me as a consumer or as a banking user, business or personal, going into my statement and seeing a transaction I don’t recognize, now I’ve got to call the bank, and the bank doesn’t have data about what I actually purchased, so what they’re doing is, they’re either calling the retailer, doing a fraud investigation, which costs the bank a lot of money, and they ultimately have to cancel my card, the consumer has to jog their memory by finding a stray receipt and saying “Oh yeah, that time at Home Depot when I spent $2,000, I was actually buying a John Deere piece of equipment.”
George: I actually did it.
Corey: What this does for the bank, is it provides a self-support tool, and whenever you can automate, and whenever you can reduce that friction, you’re creating value.
George: So, where are you now? I know physically you’re in Toronto, because that’s where the firm is based, but I meant to ask, who have you deployed with and what’s the experience of those FI’s?
Corey: We started with our partner banks that we announced back in 2015 were Royal Bank, Scotia Bank, TD, their wallet, which is called Ugo in Canada – it’s a joint venture between TD and PC Financial – and also, we announced Bank of Montreal, Tangerine Bank – which is an ING bank which was acquired by Scotia Bank here in Canada. We’re also working with several unannounced FI’s in the United States and in the UK, and those are going to be launching throughout 2016. Since our launches with some of those partners’ banks that I announced, the response from the users has far exceeded the expectations and projections that we had. I can say that what we expected was after the first 12 months or so post launch, we would see adoption in the neighborhood of 10%; which was on the aggressive end, and is was based on the uptake of users for personal financial management applications – Yodlee like products, and that’s usually what it comes out to around the first year. We saw 10% engagement and adoption after the first 15 days of launch. We obliterated our target, and now the FI that has the largest engagement is at about 40% of their users have engaged with their receipts. For FI’s, CIO’s, those digital channels folks that’s not just a big win, that’s unheard of, it’s other worldly, it’s almost an unbelievable number, but it’s true. In terms of the distribution of receipts that we’re getting, we’ve collected receipts from over 4,000 merchants, we’ve seen receipts from the top five merchants from merchant volume, by transaction volume represented in our transaction receipts that we captured. We’re actually getting a fairly represented cross-section of consumers spend, but down to the item level. 45% of our receipts come from transactions under $30, which tells us these are day to day individual transactions, from grocery stores, gas stations, pharmacies, super stores, that sort of thing. 30% of our receipts are marked as business expenses, because once you capture a receipt, you’re prompted to identify whether this is a personal or business expense. 30% of those receipts, and this is coming from the retail channel, have been marked as business. So an opportunity to possibly transition some of these customers to becoming business customers, they’re using their retail banking application for business activities.
George: Whose data is it?
Corey: The banks data is the banks data, and so the way we design the system is that all the client data resides with the bank. What Sensibill stores is the item level receipt data, which is totally anonymized and really there for a bank to pull in an offer that sends a service to their customers. All the receipts that we capture, the way that we define them in our agreements are in ownership of the bank.
George: From an integration point of view, did they do a pretty thorough job integrating this service into their mobile and online bank portals? How does that work?
Corey: One of our big value propositions we believe is that this can be a really quick win for banks. The other thing that’s in it for the bank is that is takes a long time to innovate for large financial institutions and small ones, quite frankly.
George: In other words, everybody is interacting with your service, your own app.
Corey: Right. The way this works, is we have an STK, and we have a way to significantly accelerate, and it is their own app. It’s well integrated with their app, and they can drop this in in hours, literally. Tier 1 banks are dropping our STK into their banking experience in hours, and then spending the time to configure look and feel to match the rest of their experience. They can use as much or as little of our experience as they want; we just wanted to make it very simple for them to get up and running. It’s a pretty deep integration without the costs and timelines of those integrations.
George: Just to be clear, I know that their development cycles are all set up to be able to push and do versions of their mobile apps out. How about integration into the website, the good old online banking website? What’s your experience with that?
Corey: We’ve done less online than we have mobile, only because most of the FI’s we’ve worked with have wanted to start mobile first. We’ve mostly been dealing with retail business banking, obviously it’s used much heavier online than it is on mobile, so that’s coming next for a lot of the banks. We’ve started the work, it’s really the same integration, it’s the same set of API’s, which is minimal as it is, so it’s really about designing an experience that matches the style of online banking. It’s much more of a user experience exercise than it is a deep technical integration.
George: So, with that kind of fast take off once you deployed it with your partner banks in Canada, what kind of infrastructure do you have? With a scale moving that quickly, you can get eaten alive or run out of steam pretty quickly. What are you built on?
Corey: We’re using IBM software, which provides us an ability irrespective of the geography we’re working in, the data can be local to that geography. So in Canada, you’re going to need to host your data in Canada, the UK, so forth. So, we’re able to, it’s a multi-tenant environment, we’ve stress-tested to a very many amount of users. I think we were talking before about the level of preparation you need to go through, not just from a compliance and a security perspective, but from a testing perspective to make sure you can handle the kind of scale that a bank can throw at you. We’re very well equipped to handle the type of scale, the millions of users you see at the Canadian Tier 1 banks, and certainly the US ones and in the UK. We’ve primarily worked with large banks, but they’ve put us through the ringer to make sure that we’re well equipped to handle that scale, and we have to provide all of our reports in advance of any launches to make sure that we can handle the type of scale that we’re projecting, and we do.
George: Can you work with processors who are functioning as a distributor in a way, and they have hundreds of thousands of their own customers? They might be core processors or card processors.
Corey: Absolutely. These are, for us, partners. We are a young company, we don’t have the sales force of 10,000 that works with thousands of financial institutions across the United States and for some of the major core banking providers of the world. We absolutely work with them as partners to package our service with business and retail banking solutions. It is a very straightforward integration, that’s no fooling, it’s not marketing speak. We found that our relationship with resellers has been fruitful in that way. You can test it really quickly, you can get a few close customers to pilot the solution and see if it’s one that has real legs within the customer base that you have, and then you can start to roll it out in a very short period of time. We’re very open to working with folks, and it’s something we’re already doing.
George: Great. Well, Corey, it’s been really interesting. I really can imagine the benefits for consumers, and you mentioned small business people, as a way of consolidating all of their transactions in one place, and that happens to be their bank which a change can be a really nice relationship building tool and a cost avoidance one as well. Thanks for spending some time talking with us. Best of luck. I look forward to seeing your progress.
Corey: Very much appreciated. I’ll just say this, receipts suck. Everyone knows they’re annoying. So we’re just trying to make it as easy as possible for folks not to worry about it again. Happy to be a part of the conversation.
George: Great. Well I am all for digital receipts, they’re a big improvement.
Corey: Thanks again.
George: Yeah; thank you.