September 08, 2022
A Q&A with Dominic Bennett, Co-founder & CTO at Klover, a cutting edge digital financial services app
If you’re in digital financial services, growing the lifetime value of your users is essential to your success. But how do you get access to the actionable insights you need to drive engagement and create seamless experiences that your users will love?
Klover, a fintech platform founded in 2019 and based in Chicago, has earned the loyalty of millions of customers by giving them access to their earned wages, savings tools, and rewards in seconds. But unlike most financial institutions that rely heavily on user fees, Klover’s business model relies on leveraging consumer-permissioned data and insights in concert with trusted partners. Here, Dominic Bennet, Co-founder and CTO at Klover, shares how they leverage Plaid Assets, Auth, and Transactions to create a 360° customer view that allows them to drive customer engagement, offer tailored financial solutions, and help more users find financial freedom.
Plaid: Can you tell us a little bit more about Klover's mission?
Dominic: Klover's mission is to democratize access to financial products. Today, the top 1-5% have access to benefits that simply aren’t available to the rest of us: free checking accounts, free saving accounts, credit products, credit cards, points on credit cards that translate to free airline tickets, or free hotel stays. These simply aren’t available to most people. Klover is leveling the playing field by making these benefits available to everyone. How do we do that? We believe the biggest asset our customers have is their data. That’s why we help our customers monetize that data by sharing their data for points, which translates to real cash.
Plaid: What are the products that Klover offers?
Dominic: We offer three products today. We started out offering cash advances, which is built on Plaid’s consumer-permissioned products. So when our customers use the Klover app to log in to their banking account, we can provide a no-recourse and no-credit check cash advance allowing users to access up to one hundred dollars. It's a very popular product. We do something like a million dollars daily in cash advances to our end users.
Plaid: Wait, one million dollars a day that you are infusing into the ecosystem for folks who need that money immediately?
Dominic: That's right. We also have a very high approval rating for this product. Something like 80%+ of our users are eligible. Our second product is the Klover+ product, which is a personal financial management (PFM) tool that allows users to monitor and measure how they spend. It provides credit monitoring services, spend optimization services, and tax optimization services. To put it simply, Klover+ puts cash back into our customer’s pockets. And what do users do with all that cash? Well, today, we’re excited to announce Klover banking.
Plaid: You heard it here first! So we’ve got a cash advance product, which gives $1M+ to users each day with an 80%+ approval rating. Klover+ allows users to monetize their financial data and then what do they do with that money? Boom. Klover banking. That's an incredible product evolution. Which product is your favorite?
Dominic: If you force my hand, I would say Klover+. Because it's a PFM tool, it’s very fulfilling to watch how we’re helping build financial health and deliver benefits directly to the user.
Plaid: Cash advance is more reactive–when someone needs it–while Klover+ is all about using those financial insights to change a user’s behavior. How did you first come up with the idea?
Dominic: With the advance product, we demonstrated that we could meet the need of cash liquidity for our end users and our customers. But like you said, we want to be proactive about this. How do we actually build on that? Well, we listened to our customers. Klover+ is the result of that.
Plaid: How does Klover+ use Plaid to deliver those insights?
Dominic: Plaid is the starting point for Klover+. It gives us accurate, timely, and reliable data while also cleansing and categorizing it–all of which form the ingredients for Klover+.
Plaid: How has Plaid influenced Klover’s product roadmap?
Dominic: Klover+ evolved with Plaid’s transactions offering. The first version of Klover+ was just a measurement tool. As Plaid began to offer more solutions with the transactions product, like merchant name and categorization, we were able to evolve Klover+ by building a more comprehensive view of our customer. This included anticipatory tools that helped us understand what the customer was going to do next and then eventually, providing those insights back to the customer. With the latest release and the new categorization that's available, we’ll be able to evolve it even further.
Plaid: How do you use Plaid Transactions to differentiate Klover+ from all the other PFM apps out there?
Dominic: The starting point is the data we get from Plaid but our users share a lot of data, too. Together, we’re able to stitch both data sets together into a cohesive, comprehensive user profile. It's not just about which merchants the user purchases from but what products they're buying down to the SKU level including how and when they’re buying it. That’s the basis of everything Klover+ does. We've also built powerful analytics, measurement and insight, machine learning, and artificial intelligence tools that can help us anticipate what the user is going to do next. That allows us to translate that data into better, actionable insights for the end user.
Plaid: What do your users value most about the Klover+ experience?
Dominic: The best way to talk about this is to probably just show you some of the results from our PFM product. We provide ~20% savings back to our end users just by letting them know that the store down the street is selling the same product they’re looking for, but for 20% less. Our credit monitoring product also results in a ~58 point increase in the credit scores for our customers. This compares very favorably with the industry average of ~25 points for users who use credit monitoring scores. The combination of measurement and monitoring, along with cash back from the savings and our cash advance product, allows them to manage their debt and get a much higher credit rating.
Plaid: What's next for Klover?
Dominic: We're excited about our new banking product. It takes all the benefits of your traditional brick and mortar bank—checking accounts, savings accounts, direct deposits, withdrawals, customer service—and combines them with all the benefits of digital banks, such as no fees and early access to your paycheck. We also provide cash back for every transaction made on our debit card. That’s not just for specific products, categories, or vendors–it’s for all purchases. So if a customer buys a thousand dollars worth of groceries and gas, we put $10 to $20 back into their bank account.
Plaid: How do you figure out what products to ship and when, given how precious engineering resources are?
Dominic: The first stage is qualitative research. We listen to our users maniacally. It's not just the function of the user research team either—it's everybody. Our customer service team listens to the input from our end users and everyone sits in on user interviews as a part of their job function. We’re also avid users of our product. So we get that qualitative information back and that gives us a very rich data set to form our necessary hypothesis on what to build and what the user pain points are.
Next, we take that feedback and come up with a new product or feature by building a minimum set of features that the users can adopt and love. We do that as quickly as we can so that we can get it into the market quickly. The third step is the quantitative measurement of how well the product is doing in the field–measurements such as AB testing, KPI metrics, how we’re moving that with the current product—we measure all of that. Then we make brutally honest calls about how well a product is doing and when we should sunset certain products or features in order to promote others that are doing well.
Plaid: What advice do you have for founders who are in the process of building and scaling their companies?
Dominic: First, set a goal on the horizon and then make daily progress towards reaching that goal. Someone told me this early on and I find it very valuable. The second is, be extraordinarily curious. Reinvent yourself. Challenge yourself, Disrupt yourself. Don't believe in your own assumptions. Always be learning. The third piece of advice is to pay attention to the weak signals. If you have a lingering idea that seems silly or harebrained, that could be destiny calling.