MoneyWorkz, a fintech, aims to be more than Sri Lanka’s first online banking aggregator; it will grow the market by making it easier for a large under-banked population to make sense of complicated, intimidating, and over-branched banks.

“Sri Lanka is overbanked and yet, under-banked,” says Jayamin Pelpola, Founding CEO of MoneyWorkz and a former fund manager at Goldman Sachs. According to Central Bank data, there are 30 bank branches per 100,000 people of the population—add the branches maintained by finance companies, the number increases to 37. Either way, the number of branches is higher than 24 in the OECD, a club of mostly rich countries. According to World Bank data for 2014, in high income countries, nearly 50% of the adult population saves money in a bank. In Sri Lanka it’s 30%. “Most people don’t even know the interest rate on their savings accounts, that’s the level of engagement people have with banks,” Pelpola says. “Low penetration of banking is fundamentally a matching problem. Banking is too complicated,” he says. Despite the wide range of banking products available, people are not discovering the financial products that best suit their needs. Many seek family or acquaintances’ advise on where and how to bank. Often, their employers decide for them. Information is also difficult to gather and compare.

“We’re not a bank aggregator,” Pelpola is quick to point out. “We are about enabling smart money decisions, using data analytics to pick out products that best suit their lifestyles and incomes”. MoneyWorkz has completed a seed funding round. Pelpola declined to divulge the investment. MoneyWorkz will go online in the fourth quarter of 2017, starting with credit cards—savings and lending products will be included in stages, followed by non-banking financial products such as mutual funds and real estate.

The online platform will allow people to compare credit card features, offers, and fees of different issuing banks. But people will not be able to compare every credit card product. A MoneyWorkz algorithm will analyse basic information provided by an applicant—where they work, salary range, and what they’re most likely to spend on—to show only those options that best fit their profile. “Too much information can be intimidating, and too many irrelevant information leads to bad choices,” Pelpola says. Once a customer selects a credit card from a bank of his/her choice, the respective bank takes over for verification and due diligence. Pelpola insists that profiling will reduce overall risk in the financial system through better matching.

Banks peddle credit cards with high limits or personal loans on people who don’t really need them. Around 80% of active credit card users in Sri Lanka either settle only the minimum payment each month or pay an amount less than their monthly credit card bill, piling up more interest on unpaid dues. Sometimes, people learn about financial products the hard way. MoneyWorkz has a feature that lets people convert their outstanding credit card balances to a low-interest bank loan. “We’re doing this so that people don’t lose sight of the usefulness of financial products like credit cards. Our research shows that the smart use of a credit card is equivalent to earning an additional two months’ salary. But does everyone make use of it that way?”

MoneyWorkz will also host a customized deal discovery platform, curated from all banks’ credit card offers. According to him, banks spend around Rs500 million annually to text-bomb customers their offers. “One of my guy friends kept getting messages saying ‘Hey Ladies, 50% off on lingerie!’. Not a smart way to bust Rs500 million. That’s when I decided to add this feature,” he says.

Pelpola’s first challenge was convincing banks to sign up. Globally, banks are losing business to fintechs. But, Moneyworkz is not competing with banks. “We will reduce banks’ acquisition costs per new customer by more than half, and reduce lending risk as well,” he says. “Banks have an opportunity to be more efficient in capital adequacy because they won’t have to allocate capital to attract customers”.

Banks were also concerned that the online aggregator would merely shift existing customers around. “Banks will only pay the platform fee for new accounts we generate. What we’re also trying to do is increase the size of the pie by increasing financial product penetration, so banks won’t be chasing those who are already banked,” Pelpola says.

Investors backing the platform have agreed not to expect any returns for the next two to three years by which time the fintech will breakeven, he says. Pelpola is launching a version of MoneyWorkz in the ASEAN region starting with Singapore.