Three Money Disruptors Making Your Financial Nightmares Less Scary

Samantha Sharf

Forbes Staff

Many people looked around the post-recession financial landscape and saw something was not right. Even basic financial interactions were often confusing and laborious. At the same time other (often less critical) aspects of our lives were becoming seamless. The money-minded and entrepreneurial among us set out to change this, starting companies that, if successful, could be giant slayers (or at least take a bit of market share and force the industry forward). Most quickly realized a single jabs wouldn’t prove fatal. Instead they would need to slowly chip away at the problem with strategic and methodical hits.

What’s emerged are hundreds of financial tech startups each approaching the behemoth from a different angle. Generally when you speak to most of these entrepreneurs their passion is not for the intricacies of stock trading, insurance sales or bill pay — it’s making peoples’ money lives easier.

In a recent FORBES cover story Janet Novack and I profiled startups changing the way Americans invest. We wrote about digital asset managers (aka robo-advisors) such as Betterment, Wealthfront, Sig Fig and Future Advisor which use algorithms to place client assets in diversified portfolios often made up of index funds. Readers met companies like Motif Investing which let’s do-it-yourself minded folks buy and build personalized ETFs and Kapitall which uses game mechanics to make stock trading more approachable. Many of the entrepreneurs behind these startups see investing as just the start with founders envisioning improving myriad aspects of clients’ financial lives by bringing new tools to the platforms they’ve built.

These companies have each attracted millions of venture capital dollars and have received attention not just from media but also from their more traditional competitors, meaning change is coming to investment management even if none of the new players ultimately succeed. Other entrepreneurs see more need — or opportunity — to change our money lives by taking on perhaps the most unpleasant (but also most essential) aspects of our financial life: buying insurance and paying bills.

Look, for example, at PolicyGenius. This brand new startup — their site launched this summer — was founded by former McKinsey insurance consultants Jennifer Fitzgerald and Francois de Lame because they couldn’t understand why buying insurance was invariably a frustrating experience.

“Insurance is too often a forgotten aspect of people’s financial lives,” says Fitzgerald. “We like to think of insurance as ‘instant savings.’ For example, it would take a while to build up the savings needed to replace all of your belongings if your apartment were destroyed in a fire. But for around $15 a month, you can get renters insurance that would do just that.”

Anyone who has procrastinated for months (or years) before buying renters insurance (even though you know it often costs $20 a month or less and that it could save you a lot more money in the future) understands what Fitzgerald is talking about. Comparison insurance shopping has long required visiting multiple insurer sites, reentering details about your living arrangements each time with slight variations in questions just to keep you on your toes. Often you couldn’t even sign up on the spot, instead having to finalize the deal on the phone.

PolicyGenius wants to change all that by centralizing the insurances buying process. Sure insurance brokers have been around for decades, but few offer robust online research and buying options, and none offer education tools as robust as PolicyGenius’ (or pet insurance aka Pawbamacare). To explain life insurance they created a clever video called “The Three Sickly Pigs,” but follow up with a three part curriculum for people who want to delve deeper. Currently PolicyGenius offers instant quotes for life, renters and pet insurance and email quotes for accident, long term disability and critical illness insurance. Long term care and dental insurance are coming soon.

All PolicyGenius users start with an insurance checkup which includes basic questions about income and existing coverage, as well as gems like: “ How would you describe your tendency to worry about things?” With answers on scale ranging from “I worry about most stuff” to “I don’t sweat the small stuff” to “What, me worry?”

The whole thing takes less than five minutes (and understands that you may no know if you have vision insurance, checking will be a task for later). The site then gives you an assessment of your financial and insurance state compared to your peers, plus a to-do list so you can tackle your insurance needs one at a time.

The saving grace of insurance is that — barring an emergency — you don’t have to think about it much once you’ve purchased your plan. Some renters insurance plans, for example, give you the option to pay your annual costs upfront which means you only feel the cost once. Bills on the other hand are a constant (your landlord may be thrilled to get all your rent payments at once but that probably wouldn’t be good for your cash flow or hopes of getting that leaky shower head fixed).

Beyond bills being a mere annoyance, two-thirds of Americans live paycheck-to-paycheck making the balance of money in and money out critical for avoiding fees.  “You see lots of consumers either using online biller websites or people making choices like: ‘I got my paycheck today. I am going to go to a pay day loan place to get cash because I need to drive to the gas company and pay my gas bill so I don’t get a late fee,’” says Barry Saik, senior vice president of Intuit’s Consumer Ecosystem Group which includes popular personal financial management tools Quicken, Mint and now Check, an app that helps users manage their bills. (Intuit agreed to buy Check for $360 million in May.)

Check users (more than 10 million of them) link accounts for their various bills, banks and credit cards and the free app sends you reminders that bills are due, allowing you to pay in place.

“What we have seen is that for a lot of people in America Mint and Quicken aren’t that relevant because they are struggling with this monthly household finances problem and paying bills,” says Saik. “One of the exciting things about Check is now having a way to help people with what seems like a very basic problem of paying your bills every month but once you are engaged with the customer you can help them think about the fact of the monthly bills which of those are fixed expenses? Which are discretionary things? How do you start thinking about planning for the future and making a budget?”

Offering a similar service is Prism Money (recently renamed from Mobilligy) which shows you how much of your income you will have left to spend after paying all your bills and will warn if you don’t have the necessary funds in your account to pay a particular bill.

“For most Americans, paying bills is managing their finances,” says Prism CEO Tyler Griffin. “This stress is being enhanced rather than reduced by banks and billers, and we recognized that it was a problem that we could solve with technology.”