![](\"https:\/\/tctechcrunch2011.files.wordpress.com\/2017\/04\/dave-advance.png?w=738\")
<\/p>\n<\/p>\n
Meet Dave<\/a>: an AI\u00a0dressed up in a bearsuit that\u2019s just launched to save you from the evils of expensive overdraft fees. Hand Dave access to your checking account and the app\u2019s machine learning algorithms\u00a0will get busy crunching your spending data so the bear\u00a0can warn you about pending transactions \u2014 like a monthly subscription for Netflix or your typical Saturday night Uber bill \u2014 which might\u00a0push you into the red and incur an expensive bank penalty.<\/p>\n The US-only app predicts a user\u2019s \u201c7\u00a0Day Low\u201d, aka the lowest it thinks your bank balance\u00a0will drop in the next seven days, in order to encourage and support\u00a0better money management. The\u00a0ultimate aim being\u00a0to help people avoid having to fall back\u00a0on their overdraft as \u201can expensive form of credit\u201d, says co-founder Jason Wilk, describing it as a sort of \u201cweather forecast\u201d for money management.<\/p>\n Dave\u00a0also includes\u00a0a payday loan facility \u2014 so users who face the inevitability of\u00a0having to dip into a negative balance can opt to borrow up to $250 ahead of their next\u00a0paycheck to see them through. But unlike payday loan companies (such as Wonga<\/a>), which\u00a0also offer a short term borrowing facility to mobile users but typically charge very high rates of interest, Dave\u2019s payday loans are 0% interest.<\/p>\n Wilk tells TechCrunch it will also merely be asking users to pay it\u00a0back when they can. \u201cWe\u2019re not even tying this to a timeframe. Unlike the payday loan. All we\u2019re saying is to users pay us back\u00a0whenever you have the estimated income come it,\u201d he says.<\/p>\n If all this is sounding too good to be true there may be\u00a0a reason for that: Dave hopes you\u2019ll be so thankful of the service its machine learning algorithms are\u00a0doing for your spending habits\u00a0that you\u2019ll give a donation when the bear asks for a tip \u2014 although this is also entirely voluntary. How much you choose to pay (if you pay) is also up to you.<\/p>\n To further incentivize\u00a0the\u00a0opt-in fee,\u00a0Dave has partnered with Trees for the Future<\/a>\u00a0\u2014 and says that for every percentage users tip it will plant the equivalent number of trees via its charity partner (so\u00a0a tip 2% will equal two trees planted).<\/p>\n An FAQ<\/a> on its website says this of\u00a0its partner\u00a0cause:<\/p>\n Trees for the Future provides families in Sub-Saharan Africa with sustainable food sources, livestock feed, products to sell, fuel wood and up to a 500% increase in their annual income. Since 1989, Trees has planted over 115 million trees in dozens of countries and revitalized hundreds of thousands of acres of soil while changing people\u2019s lives forever.<\/p>\n<\/blockquote>\n So, in essence, Dave\u00a0is about rebranding the roundly hated bank overdraft fees, which apparently do nothing except\u00a0enrich banking giants, and trying to replace them with feel good donations\u00a0attached to a worthy\u00a0cause. A\u00a0line on its\u00a0website claims: \u201cDave lives off of donations\u201d, although Wilk\u00a0says it does also charge a small subscription\u00a0for its app \u2014 $0.99 per month. Albeit, this\u00a0subscription\u00a0appears\u00a0radically reasonable beside\u00a0the typical cost of overdraft fees.<\/p>\n The team behind Dave has raised seed funding\u00a0from a string of high profile investors. Since being \u201cofficially\u201d founded in September last year, they\u2019ve pulled in\u00a0$3M from investors including Mark Cuban, SV Angel, The Chernin Group, Jonathan Kraft, Skip Paul, Diplo and others. So, safe to say, this is not Wilk\u2019s first startup; indeed, he says it\u2019s his \u201cfourth go around\u201d. (One of his prior startups \u2014 a video syndication platform called AllScreen TV \u2014 exited\u00a0to Zealot Networks for $20M, having raised just $330k in seed funding.)<\/p>\n The\u00a0idea for Dave came about because Wilks says he and a couple of his co-founders were \u201cchronic overdrafters\u201d in college. \u201cI would always be overdrafting my account. I had hundreds and hundreds of dollars overdraft use on my account. So this is a problem that I\u2019ve always had and I knew it needed to be solved. And I\u2019m also an active Redditer and I can see on a weekly basis that somebody is posting about being upset with bank fees.\u201d<\/p>\n He also points to the rising cost of overdraft fees\u00a0in the US, as another reason he wanted to do something here, noting they\u00a0amounted to $36BN last year alone, and couching\u00a0the problem as \u201cupsetting\u201d.<\/p>\n To figure out how they could help, the team set about doing\u00a0market research to find out why people were overdrafting, and said their survey turned up\u00a0two main reasons: people not being aware of upcoming expenses, and people being short before their next paycheck.<\/p>\n Another factor\u00a0they unearthed was that people were often going to ask a friend or family for a short term loan to cover the shortfall and see them through \u2014 which was the inspiration for giving the app a human name. As for bears, well, everyone loves bears right?<\/p>\n \u201cWe wanted Dave to be this alternative to your friends and family who can help save you from unnecessary bank fees and lets you know about all your upcoming expenses,\u201d says\u00a0Wilk.<\/p>\n Discussing the loan element of the product, he says the average user only needs to borrow about $130 at this point, so the team hasn\u2019t\u00a0decided yet whether to offer larger loans that do charge\u00a0an interest fee in future. \u201c$250 seems like a safe limit\u2026 But as we look to other things we might raise that, we\u2019re just not quite sure yet,\u201d he adds.<\/p>\n Wilk\u00a0describes Dave\u00a0as an \u201chonor system product\u201d, and reckons its\u00a0friendly approach will help buttress it against the risk of users\u2019 taking advantage of the loan facility \u2014 i.e. by borrowing money and not paying it back\u00a0(although he says if a user continues to default their account will be\u00a0suspended, ergo\u00a0Dave\u2019s patience is not infinite).<\/p>\n Users are not credit checked for the loan facility. Although they are required to have an active checking account \u2014 so essentially to be employed with a regular wage coming in. And of course Dave knows whether you\u2019re employed because you\u2019re sharing access to your bank account with the app so it can see everything coming in and going out of your account.<\/p>\n Users log into the app with their checking account, with Wilk noting the app\u00a0currently supports \u201cabout 3,000 institutions\u201d. \u201cAs opposed to us offering banking services ourselves we figured a much better way to start was by helping people enhance their own account that they already have,\u201d he adds.<\/p>\n On the\u00a0prediction front, he\u00a0concedes Dave obviously can\u2019t predict unexpected and\/or random spending \u2014 but says the idea is to\u00a0structure a series of notifications (warning of pending overdraft, warning of\u00a0pending transactions etc) so that users are given enough advanced notice to be able to\u00a0take action to better manage their money \u2014 and\u00a0either avoid going into overdraft in the first place or else take a short term loan to cover the shortfall.<\/p>\n The app initially sends an advance notification of the seven day low balance to make users aware when they might need to cut back on their spending. It also warns about any pending transactions which may also\u00a0push an\u00a0account into a negative balance \u2014 giving a user\u00a0time to act before money is actually taken from their account. A final warning gives the chance\u00a0to borrow\u00a0to cover an inevitable overdraft.<\/p>\n \u201cWe\u2019ll send you a final notification that you have an extremely high risk of overdrafting,\u201d notes Wilk. \u201cIf your current balance is negative, we still have some time to help you by the end of the day. So the predictions don\u2019t need to be perfect for us to help you out \u2014 we\u2019d like to be as useful as possible. But we have three times that we can intervene to help you out.\u201d<\/p>\n Why do people\u00a0need an algorithm\u00a0to help them avoid overspending? Why aren\u2019t they\u00a0able to\u00a0manage their own spending? Wilk reckons technology is a pretty big part of the problem here.\u00a0\u201cPeople use their debit card or credit card so often now it\u2019s sort of hard to keep track,\u201d he argues,\u00a0noting\u00a0that pending transactions can be especially tricky to keep on track of as\u00a0it\u2019s not clear exactly when the money will be taken.<\/p>\n \u201cHow could somebody be on top of that and know that they have another bill that\u2019s going to be processed at some point during the week,\u201d he adds.\u00a0\u201cPlus we\u2019ve got all these digital services, they\u2019re billing you on every thirty day period so who knows [which day it\u2019s going to be]. If you\u2019re down to $5 or $10 in your account it\u2019s kind of frustrating to have to log into your bank account, go back into your statement, figure out when that last bill hit\u2026 \u00a0It\u2019s confusing.\u201d<\/p>\n While the app is ostensibly being targeted at Millennials, Wilk says early positive feedback from testers has not been limited to this age-group\u00a0\u2014 and\u00a0reckons there could be something useful here for \u201call ages\u201d. \u201cIf we could have one million installs after 12 months we\u2019d be really happy,\u201d he adds.<\/p>\n He also confirms that\u00a0overdrafts are just the first target for Dave \u2014 with the idea being to use the same approach to,\u00a0potentially, address other types of bank fees or even move to tackle unpopular fees in other industries. \u201cWe\u2019re not sure yet we just know that people are mad about lots of different things \u2014 so this is just the first one,\u201d he says.<\/p>\n Privacy<\/strong><\/p>\n One factor\u00a0that concerned me when I looked over Dave\u2019s\u00a0privacy policy<\/a>\u00a0is that it included an apparent ability for the app\u00a0to share user information with third parties for marketing purposes. And considering\u00a0how much\u00a0personal and sensitive data is contained in a person\u2019s bank account \u2014 e.g.\u00a0spending patterns, salary info, subscription data\u00a0etc etc \u2014 this seemed pretty alarming. And made its low\u00a0fee claim look more like a cynical grab for user data.<\/p>\n Here\u2019s what\u00a0a table on its Privacy Policy page contained\u00a0for \u2018reasons we can share your data\u2019 when I first looked at it \u2014 note that it said Dave shares personal data for joint marketing with other financial companies and for nonaffiliates to market to you:<\/p>\n Asked whether Dave would indeed be sharing user data with third parties for marketing purposes, Wilk said it would not and that he was unaware of the clauses TechCrunch had flagged up. \u201cWe have no interest in selling anyone\u2019s data,\u201d he told us, pledging to look at the privacy policy and get it changed.<\/p>\n Sure enough, the new privacy policy has been changed to state Dave\u00a0will not share personal data for joint marketing with other financial companies nor\u00a0for nonaffiliates to market to you:<\/p>\n \u201cAdvertising to users based off their data is not a business we\u2019re interested in,\u201d added Wilk. \u201cThat\u2019s not something that we\u2019re looking to do \u2014 this service is really something we\u2019re trying to build to better everyone\u2019s banking experience in the US, because we don\u2019t think it\u2019s a good one. And we certainly wouldn\u2019t want to do anything to make someone feel uncomfortable or harm them in any way.\u201d<\/p>\n So, as ever, it pays to read the small print \u2014 including, and perhaps especially, if you\u2019re a founder and the print in question is\u00a0your own privacy policy.<\/p>\n","protected":false},"excerpt":{"rendered":"\n
![\"\"](\"https:\/\/tctechcrunch2011.files.wordpress.com\/2017\/04\/screen-shot-2017-04-25-at-12-54-51-pm.png?w=759&h=329\")
<\/a><\/p>\n![\"\"](\"https:\/\/tctechcrunch2011.files.wordpress.com\/2017\/04\/screen-shot-2017-04-25-at-1-04-32-pm.png?w=757&h=326\")
<\/a><\/p>\n![\"\"](\"https:\/\/tctechcrunch2011.files.wordpress.com\/2017\/04\/dave-advance.png?w=680\")
Meet Dave: an AI dressed up in a bearsuit that’s just launched to save you from the evils of expensive overdraft fees. Hand Dave access to your checking account and the app’s machine learning algorithms will get busy crunching your spending data so the bear can warn you about pending transactions which might push you into the red and incur an expensive bank penalty. Read More<\/a><\/p>\n\n<\/img><\/a>
<\/img><\/a>
<\/img><\/a>
<\/img><\/a>
<\/img><\/a>
<\/img><\/a>\n<\/div>\n
<\/p>\n","protected":false},"author":5817,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[25],"tags":[59,66,26],"class_list":["post-339238","post","type-post","status-publish","format-standard","hentry","category-technology","tag-media","tag-techcrunch","tag-technology"],"_links":{"self":[{"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/posts\/339238","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/users\/5817"}],"replies":[{"embeddable":true,"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/comments?post=339238"}],"version-history":[{"count":0,"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/posts\/339238\/revisions"}],"wp:attachment":[{"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/media?parent=339238"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/categories?post=339238"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/people.utm.my\/asmawisham\/wp-json\/wp\/v2\/tags?post=339238"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}