When I was at BlackRock, I spent a lot of time on tech that was designed to improve return on investment for people who already had a lot of money,” says Niall Bellabarba, co-founder of Ernest, the intelligent finance coach.
“So my starting point was that the man on the street doesn’t have access to sophisticated tech that helps him manage his money. I was at the biggest asset manager in the world, but what we were building was for the few. That didn’t seem right. And if something isn’t right, there’s always huge opportunity.”
After a stint building other businesses (more on that later), Bellabarba revisited the idea of personal financial technology with a couple of friends. “We met up at weekends for over a year asking what we could do. A few months later, Ernest was born. Still in beta, he is “quite simply, your free financial coach.”
Ernest, a bot, sits within your Facebook and connects with your bank accounts (an app will come later). He combines natural language processing technology with machine learning. Currently, the new technology has two modes of operation: answering questions and proactive notifications. Go on the website (Ernest.ai), and you can sign up for access to the beta.
When you start using Ernest, one of the first things you might get is a notification that you’ve been paid. Then, you might ask him “what were my last ten transactions?” or “what have I spent at Tesco or Easyjet this year?”. Ernest will run the numbers for you and answer your questions. “You can work these things out yourself, but asking them in natural language is obviously considerably easier.” You can think of Ernest as equivalent to a fitness instructor, says Bellabarba. “One will look at your build, weight, fitness level and give you appropriate tasks and targets. The other will do the same for your finances.”
As it stands, Ernest is “mildly more sophisticated than a banking app. But this is just the start of the journey, and we’ll be taking him to a level of superiority that doesn’t exist that the moment.” At the turn of the year, the three-strong team will be raising £2m, with the funds put towards making the engine behind Ernest more intelligent and able to answer more complicated questions. Things like: “I want to buy a house; how much do I need to save for what deposit over the next six months?” You’ll also be able to do things like add other accounts – like your partner’s, so you can save together.
Bellabarba is confident that now is the right time for technology like Ernest to enter the mainstream. “Machine learning technologies are progressing, language processing tech is a huge area of development and all the big companies are looking at the space. I strongly believe that there is a need, too. The mismanagement of personal finances is a problem, and I think we can help.”
The serial entrepreneur is also keen to overlay experiences from past ventures onto Ernest. While doing an MBA, Bellabarba started to look at eye tracking technology. “At the time, nobody believed in it. The idea of measuring what people felt when they watched videos just hadn’t taken off yet.” Roping in a couple of friends, they started a project – “as an academic exercise” – to see if there was any mileage in the idea.
In the end, one of the companies they were talking to offered to pay them if they continued, and Realeyes Data Services was born. Bellabarba ran the company from 2007 to 2010, then sold it. “The lesson there was the importance of having a great team and friends around you as you build a business. You’re going to have a lot of down times, so magnifying the upside is vital.”
It was after this that Bellabarba went into finance, joining iShares, which was then bought by BlackRock. “That taught be just how important fiduciary duty to your clients is. And from there, I set up WideRun.” WideRun was a VR training system for sports, but it came too early. “It is so vital to get the right timing on both tech and the market – that was the lesson there.” When it comes to Ernest, however, Bellabarba thinks he’s got “all three things just right”. Now, it’s just a case of seeing whether the public bite.