Mylo with Phil Barrar (CEO) | E101

Making saving easy.

Summary:

In this 101st episode of Fintech Impact, Jason Pereira, award-winning financial planner, university lecturer, writer, and host welcomes Phillip Barrar, founder of the Mylo savings and investment app, to talk about banking differences in Canada versus the EU, banking regulations, and more. 

Episode Highlights: 

● 00:33: – Mylo is an app that rounds up your purchases and invests the change to help you work towards your savings goals. 

● 03:18: – Phillip started Mylo after he was already teaching his friends and family savings techniques. 

● 04:24: – Canada has an under-banked population and aren’t saving or investing. 

● 04:40: – 53% of Canadians have under $1,000 in their bank account. 

● 04:54: – For Phillip, it’s about inclusion; how do you make products more accessible and affordable and remove friction points? 

● 09:06: – The roundup process in Mylo helps people go from saving nothing to saving their first $1,000 in a year. 

● 09:15: – Users can also set up recurring deposits in addition to the roundup. 

● 09:47: – Users typically save between $10-30 in roundups over the course of a week. 

● 10:16: – Mylo is not investment focused, it’s life goal-focused for users. 

● 10:46: – Each goal you set up in Mylo has its own risk profile and allows you to invest differently depending upon the goal time frame and your preferences. 

● 12:29: – Mylo isn’t monetized off of robo-investor fees, but from $1-3/month subscription fees. 

● 13:24: – Mylo also offers cash back offers with partner brands. 

● 16:01: – Phillip is expanding Mylo into the EU. 

● 16:50: – Banks regularly change their websites and APIs to break connections with third party aggregator apps. 

● 18:09: – Companies in most English-speaking countries are afraid to expand to the EU because it’s multilingual and multi-domicile, but for Mylo, which was founded in the bilingual Montreal, it felt natural. 

● 22:55: – Mylo partners with Canada Helps and allows you to connect a goal to a charity and directly give to them through the platform. 

● 23:28: – Mylo recently launched a beta version of Mylo Advisor, which allows you to ask a one-off question to a financial planner. 

● 24:58: – Most Mylo users are high-income users for the age group. 

● 28:45: – If Phillip could change one thing in the industry it would be to push people on the regulatory side to be more open to change more quickly in order to remove friction. 

● 30:10: – The biggest challenge has been that the bar to get funding is so much higher in fintech than in other industries due to the money needed to navigate regulatory bodies. 

● 31:59: – What most excites Phillip are the messages he gets from users. 

3 Key Points 

1. Canada is an underbanked population that does not save or invest its money. 

2. Mylo is focused on helping users achieve their financial goals. 

3. Banking security comes from regulation not from the size of the bank. 

Tweetable Quotes: 

● “We need to be able to start putting together the right practices in place. It’s something everyone wants to do. It’s more financial literacy through doing versus more financial literacy through learning or education.” –Phillip Barrar 

Resources Mentioned: 

● Facebook – Jason Pereira’s Facebook 

● LinkedIn – Jason Pereira’s LinkedIn 

● FintechImpact.co – Website for Fintech Impact 

● https://mylo.ai/

Transcript:

Jason Pereira: Hello and welcome to Fintech Impact. I'm your host, Jason Pereira. Today on the show, I have Philip Barrar. Philip is the founder of Mylo. Mylo is a savings and investment platform that uses roundups as a powerful nudge tool to help people become better savers. With that, here's my interview with Philip. Hello Philip. 

Phil Barrar: Hey, how's it going? 

Jason Pereira: Good, good. Thanks for taking the time. 

Phil Barrar: Oh my pleasure. Thanks for having me. 

Jason Pereira: Philip Barrar, CEO of Mylo. Tell us about Mylo. 

Phil Barrar: Mylo, we are the Canadian app that rounds up your purchases and invests the spare change to be able to help Canadians achieve their financial goals. Many Canadians today aren't saving/investing at all, and Mylo makes it as easy as spending on your existing credit and debit cards to be able to put money aside and work towards those goals. 

Jason Pereira: Okay, so we'll dive into that shortly, but tell me about the journey of what caused you to start Mylo. 

Phil Barrar: Absolutely, so I was actually born in the US. Raised in the US and actually came to Canada for university. 

Jason Pereira: You have a complicated tax situation is what you're telling me. 

Phil Barrar: I have a very complicated tax situation, but luckily I'm a dual citizen so that worked out well, and I was actually able to go to school for a quite affordable, I got the [inaudible 00:01:18] rate, which was about $3,000 a year versus some of the US schools was looking at about $50,000 okay. 

Jason Pereira: I was going to say, our US listeners just had heart attacks. 

Phil Barrar: Exactly. So for me, I mean, it was a financially wise decision to come to Montreal, and besides that, it's a beautiful city. So besides being the right financial choice it ended up being the right life choice as well. Ended up staying here after I graduated and I was very involved in university. Started the entrepreneurship minor work in [inaudible 00:01:46]. Was the president of entrepreneurial and management association. So when it came time to actually graduating and set in what I wanted to do with my life, I decided to go and start a business express. So I bootstrapped my first business and I quickly learned the difference between self-employment and actually building a scalable business. So I built an awesome product. I outsourced the product development overseas. I was doing sales during the day and product development at night. Really working burning the candles on both ends, but I was in the B2B industry where it was a long sales cycle and not a revenue generator for the industry. So it was an awesome product, but it was not a scalable business. Limited target size as well. 

Phil Barrar: So I moved on into my second business, which was a consumer-facing business. Quickly grew that it was helping students get restaurant discounts during off- peak hours, students having crazy schedules and leaving class at three o'clock so they could get these awesome restaurant discounts and helping restaurants fill the non-peak hours as well. Quickly grew that to 250 restaurants with 25,000 users in Montreal. So [inaudible 00:02:49] marketing you could see within six months. So during that journey became really good with personal finance, became really good with making a dollar stretch. As a bootstrap entrepreneur, I wanted to live the same quality of life as my friends making six figures at tech companies. But I think every dollar- 

Jason Pereira: That's a tall ambition there. Okay? 

Phil Barrar: It is. It's a very tall ambition. I did manage to live the same quality of life and it's because I learned [inaudible 00:03:12]. I learned how to manage my money very well. Soon enough I was teaching my friends and family how to save on different kinds of products, different things that they could be doing where they're spending the money. One of the things that I had a leg up on was I was an American citizen. I had access to all this great fintech apps that Canadians didn't have access to back in 2010, 2015 so I said, "You know what? I want to take the best in class of what helped me be successful in my personal finance journey and be able to build the best in class product for Canadians." And that's how we started Mylo. 

Jason Pereira: Good. So, okay, let's go back to the core app. So basically what you did was you took the concept of roundups, which let's be fair, you didn't invent. That's the one that's been floating around. It's been implemented even by the likes of, well, when ING Direct was around. I remember they were doing stuff like that too. But nevertheless, what you did was you took that concept, packaged it into an app, and I guess essentially built it for a different user experience and you've been successful with that ever since. Is that about right? 

Phil Barrar: Yes and no. So what I would say is tactically the roundups been around for a while and that's been a big part of our success, but we didn't say, "Let's just take the Roundup and move forward with it." What we said is, "Canada has a largely under-banked population. We think they have a very stable banking infrastructure. We did really well during the last recession, but at the end of the day, Canadians are not saving, investing their money and there's a reason why that was happening." So we decided that we wanted to go and make an impact with that and found that, one, first 53% of millennials have less than a thousand dollars in their bank accounts. That was a shocking stat that keeps you up at night regardless of how much money you made. 

Phil Barrar: The second part, we have all these great products and services why aren't people doing this? So it comes down to financial inclusion. How do you make products more accessible and more affordable? And it was really about how do you remove the friction points? Right? And that's what we did. Opened up an investment counts without a phone call, be able to get started with no account minimums or any fractional trading, be able to make it as accessible as your dating apps and your traveling apps and be able to do so without- 

Jason Pereira: I don't know how successful you'll be compared to a dating app, but nevertheless. 

Phil Barrar: You'd be surprised. You get a lot of people who come back. 

Jason Pereira: Swipe left to save, swipe right to spend. 

Phil Barrar: Swipe your credit card to save, absolutely. Right? [crosstalk 00:05:25]. 

Jason Pereira: Yeah, that's true. You know what? There you go. That's your new tagline. I just gave it to you. Swipe to save. 

Phil Barrar: Swipe to save. But I mean this idea of very transparent pricing, affordable pricing, taking down all the barriers is what led us to do so and the roundup was a great way to start the relationship. 

Jason Pereira: So it's interesting, you hit on a couple of interesting trends, and notes, and studies that I've heard. So specifically we think to ourselves, there's this entire ecosystem exists out there. People want to do this, it exists. Why aren't they saving more? And there's financial literacy stuff just throwing up everywhere by every association known to man. And basically when tested on this, people who do even say use a conventional robo-advisor end up saving piddly amounts, right? Way under what they should be because a lot of what we've done is about, "Hey, open this account. Do this type of account." It's not like, "Based on what you're doing, you should be saving X." That's typically not been part of the value proposition to a lot of these robos and startups. Well, the other thing is that as much as we think there's a lot out there I've known of behavioral studies where they've sat down and educated people from other areas of the economy and said, "Okay, basically, your job is to figure out how to invest your money. You're a young professional, go ahead." And the first thing they would do is open up Google and they would freeze because they wouldn't know what to type in the box. Right? 

Jason Pereira: And it's like you know, they type in how to invest and then they'd ignore all the paid stuff at the top. Then the next thing you know is the next link would be how to set up your own discount brokerage account. And it's like, "No, this is not ..." A lot of the do it yourself, you know, the stuff that's out there is do it yourselfer based and these are people who want it to take advantage of basically having someone, well, handle their investments versus people who don't want that. They want help. Right? So I commend you on doing what you can to reduce friction because that's important. So tell me about the roundup process. So you know what control over how much gets done? How high are you rounding up? Tell me about this entire value chain experience for the consumer from beginning to end I guess. 

Phil Barrar: Absolutely. So you just get started by most likely seeing one of our Facebook ads, and a lot of people have seen them and that's what drives them into the funnel. So typically is not someone actively looking to go out and say, "How do I open up my first investment account? But the message resonates with them. They've seen the ad, they see the [inaudible 00:07:46] and clip and said, "This is something that's clever. I should be doing this." They have a little voice in the back of their head that says, "You should be saving and investing your money." 

Jason Pereira: We should all be dieting too. We all know these are things we need to do, but it's habit, right? 

Phil Barrar: So they see this an easy way to get started. So they typically go to our either landing page or a Google Play or Apple app store, download the app. They go through about a three to five minute signup process. It goes through basic information, name, address, employer, income. You link your bank by logging in with your online banking credentials directly to the Mylo application and then you go through and answer a series of five KYC questions. With all of those things and you can then shut down the application, go about living your daily life. Every time you make a purchase, Mylo tracks that Roundup and real-time and what we do is we accumulate all of those roundups for you throughout the course of the week. Then that's on any credit and debit cards that you may have linked directly to the Mylo application. 

Phil Barrar: Then once a week we take an aggregate of all those roundups as a pre authorized debit from a checking account. We move that money into your Mylo investment account. So it's a clever way of doing a recurring deposit that's variable based off spending typically in the ballpark of 10 to $30 per week depending on your spending and your multiplier that you may have turned on. And it helps people go from not saving anything at all to putting away their first thousand dollars in the course of the year, and that's the Roundup. Beyond that, they have the ability to put in one time deposits and recurring deposits and a whole bunch of other funding rules they'd be able to have full control over. So once they get comfortable with the idea and get started, then they expand that relationship beyond just roundup. 

Jason Pereira: Excellent. So you're taking tiny sums that they're not going to miss and frankly saying, "You spent 3.75 on this coffee at Starbucks, can we get the other quarter?" It's not a very difficult value proposition for someone to say, "Yeah, yeah. It's a quarter." But it's interesting. So your stats are telling you ... How much is the average savings after say the first month on a weekly basis? What's that look like?

Phil Barrar: So typically between 10 to $30 in roundups and then from there people go on, about 75% of our user base actually enables recurring deposits on the transfers as well. So they'll put in a bit more. Both Roundup [inaudible 00:10:01] comfortable with the concept. 

Jason Pereira: So what's the trigger for that? Are they receiving an email saying, "Hey, you've done $30 this week." And they say, "You know what? I can do more." What are you doing to nudge them in that direction? 

Phil Barrar: Absolutely. So I mean the way that we've set up the product is really not investment focus but more about life goal-focused, right? So rather than going and saying, "You have a financial account with Mylo and I have $200 in my investment account." It is, "I'm saving for a vacation, I'm saving for a down payment on a house, and maybe an emergency fund." So you set up three goals and each one of those goals have a funding accountant with timelines associated with it. So it's just a way to be able to accelerate towards the achievement of a goal. What happens is each one of those goals, you have your global risk profile that gets assigned to you based off the KYC questions you have but each one of those goals has its own risk profile. So your money may be invested differently for your vacation fund that you want to go to Spain in six months than your down payment on the house. So- 

Jason Pereira: Results-based investing. So exactly what we should all be doing. 

Phil Barrar: Yep. Exactly. 

Jason Pereira: That's great. So, you're basically, once you rounded this up you're sending it off to your investment platform, which I take it a robo advisor? 

Phil Barrar: It is a robo-advisor. Back in 2017, we acquired an asset management firm, [inaudible 00:11:12] Asset Management. We launched a few funds that hold underlying ETFs. These are all no-fee funds. There's no management fee on any of our products whatsoever. The only fees that our users pay are the underlying MER fees, typically in the basis points of 15 to 20 basis point MERs. We buy very vanilla index funds. Four funds or money market, equity, fixed income and that social responsible investing fund that would swap out with our equity fund and a blend of those each holding three to five ETFs would make up our overall investment strategy. 

Jason Pereira: Yeah. And frankly, we're not talking about people who are large accredited investors who want to start thinking about hedge fund stuff. These are people getting started, right? So let's not worry about what limited access stuff looks like or private debt and [inaudible 00:12:03] looks like. Let's get away from that and let's just focus on the fundamentals. So I commend you for that. So a couple of things to talk about there, points that you made. First off, I want to make a comment about your website, nice and clean but what I really find compelling about what you just said is the fact that nowhere on this site does it look like you're selling a robo-advisor, right? you're like the phantom robo-advisors. You lie behind the scenes there. So if you're not monetizing alpha robo-advisor fee, tell me about how you're monetizing. 

Phil Barrar: Absolutely. So we are a volume-based play where we charge a one dollar or three dollar a month subscription fee for two different plans that we have, and we will continue to be very transparent and charge subscription fees for products that we offer to our users and we try to make that price point very easy and accessible for everyone. So in our one dollar a month plan you have access to non-registered accounts, you have weekly withdrawals in your investment account and pretty much access to a portfolio manager anytime. With our advantage product you have access. So that was one dollar a month. For our three dollar a month product we have a [inaudible 00:13:11] and RSPs. We have actually shorten the settlement period down to one day to be able to get your money back within one business day back to you. We have the social responsible investing and then with both of those products we actually have cash back perks. So you're paying one or three dollars a month, but you're getting anywhere between five to $40 in cashback offers from some of the brands that we have on the platform. Everything from Uber to Amazon [inaudible 00:13:35] directly there. 

Jason Pereira: Excellent. I got to tell you, you really are staying true to what you said your mission is. You're trying to help people save more so I mean it's an interesting combination. You're using something that's well-known in behavioral finance, which is the roundup, not missing incremental sums. You're using another couple of nudges and other behavioral finance term, and the cash backs are fantastic because essentially you're just doing affinity marketing and giving back some of that. And you're just doing this on a fee-based platform. So that's well done. So you've established yourself initially in Canada. You've expanded to Europe though. So talk to me about what the decision was about where to expand to and as always comes up is when you are you going to the States and are you going to the other States? So let's talk about that. 

Phil Barrar: And being from the States originally everyone shuns me a little bit for not going back. 

Jason Pereira: Your family's like, "Why aren't you here?" 

Phil Barrar: Why aren't you coming back? When can I have your product? Everyone I grew up with is like, "I want to use Mylo." 

Jason Pereira: You need more friends down there to the scale it. 

Phil Barrar: Yeah, that's right. 

Jason Pereira: Not saying you don't have friends down there, you need a pretty large group ofpeople. 

Phil Barrar: So yeah. It was actually a really tough decision. We haven't officially launched yet, but we're in the process of doing so after our most recent fundraising announcement and we did a worldwide analysis of where to look. We looked at Asia, Africa, India, South America and some of the things that we're looking at is one, can we build a product that's close enough to our core product? We don't have to completely reinvent ourselves. So we wanted to keep something very similar. Africa is very difficult because they went straight from cash directly to mobile, right? Then they're missing that core banking infrastructure over there. 

Jason Pereira: And blockchain some cases. It's quite incredible. 

Phil Barrar: It's amazing fintech innovation and there's a lot of stuff happening. It just wasn't the right fit for our product specifically. Some places in Asia, it would be very difficult there. There's a culture of saving, but also if we weren't fully headquartered there and then fully dedicated directly to that market with all of our resources it's impossible to compete. 

Jason Pereira: Yeah. I'm a believer that you ... It's amazing how many companies, I typically find they're more so American and UK based ones that think they can port what they're doing over to any other English speaking country with little or no understanding of the culture and Canada is a wasteland of those companies that thought they could come here and basically succeed. My sister actually worked for Target and so that tells you everything you need to know there. 

Phil Barrar: [inaudible 00:15:54]. 

Jason Pereira: Yeah. So yeah, it's so smart. You did the smart thing. You did the study and you basically found what the key area you wanted to go to. So which where [inaudible 00:16:04] 

Phil Barrar: [inaudible 00:16:03] or looking at the [inaudible 00:16:04]. So we're looking to deploy in the EU and the things that we love about the EU one, the open banking structure and how can we deliver an awesome [inaudible 00:16:12] experience. 

Jason Pereira: Oh, God if only. Open banking infrastructure. Sorry, what's it like to work with that? I'm sorry. Open picking infrastructure. 

Phil Barrar: That's a touchy topic, but the nice thing about it is this consumer awareness. Everyone knows this happening. There's a level of trust and openness to be able to go through and use models like this. Right? So that's the nice part about it. Technically it's a mess [inaudible 00:16:37]. 

Jason Pereira: Yeah. I know. Those standards and protocols aren't in place. They just said do it but no one actually said how.

Phil Barrar: And the things that we see with screen scraping or data aggregation services in 

Canada and the US are banks will change their websites. The connections will break. In Europe, banks are changing their APIs on a regular basis just to be able to make all the connections [inaudible 00:16:58]. 

Jason Pereira: Oh, I'm so tired of this game of whack-a-mole. It is the consumer's data. Stop being works about it. In Canada more recently, one of the larger ones who shall go unnamed, but there's only five so you can pick which one it was. I think it was last year or earlier this year they finally launched two-factor authentication saying, "Oh yeah, this is a great security thing. This is why we're doing it." And meanwhile it's like you ask them, it's like, "You're doing this to block the aggregators." And they're like, "Damn right we're doing this to block the aggregators." And it's like, "Ah." 

Phil Barrar: And they play favorites. They go through and say, "These are the fintechs we want to work with and these fintechs we don't. So we launched this and the fintechs will like, we'll give you a back door. 

Jason Pereira: If anyone's listening from the government of Canada, please put me on a committee to penalize these people for noncompliance because you need to drop the hammer on them so hard. 

Phil Barrar: But back to Europe, the concept of [inaudible 00:17:46] definitely works. The regulatory infrastructure, the fact that you can passport between countries very easily is the blessing. The fact that there's one single currency for all of EU is also incredible as well. They're very banked population using a debit and credit card pretty often. No credit card, mostly debit card. No credit card over there. So for us- 

Jason Pereira: [Ipsen 00:18:05] and fries. Yeah, I know. 

Phil Barrar: Everyone looks ... Expand to the US, Australia, UK, New Zealand, all the English speaking countries and everyone's scared to go to the EU because of the multicultural, multilingual aspect of that. And you know what? We're from Montreal, we've been bilingual day one, it's in our DNA, it is what we do. So it's a barrier to entry, but when one we're willing to tackle. 

Jason Pereira: You know what's it's funny? Is speaking to many Canadian fintechs, I find talking to the American ones like, "But I got to go ... Then there's the language issue" And we're all just like, "What do you mean? Of course you've got to develop things to be multi-domicile, multi-language." Right? It's just we are so inbred into that and I won't say just the US. I will say I get the same thing from Australia and New Zealand based companies too. It's like they're just not used to that world. So they're used to multi-domicile. They're not used to multi-lingual. So yeah, that makes sense. That makes a lot of sense. Oh God. Open banking. That must be nice. Even if it's a mess, I'd rather it be a mess than not exist because eventually it'll get resolved. Good. So let's go back to the core product. Talk to me about what's basically worked best with this. What have you done? You've talked about a couple of key nudges, I'm sure you've experimented with other things. What worked, what didn't work? What are you doing to really drive motivation around changing behavior around savings? 

Phil Barrar: So interestingly enough, one of my funniest stories I tell people about this is when someone downloads the app and we see this trend, people go through, hear about the app through some sort of social media, not through word of mouth. Typically go in, start the roundups, have their first deposit, put it into their Mylo account, immediately go and withdraw the $20 from the Mylo account and then immediately put it back in. So there's a level of- 

Jason Pereira: Just a test to make sure that it exists. Is that what's going on? 

Phil Barrar: It's a level of Canadian trust that we're moving from a population that's only used financial products from banks and FIs to moving to a more technology- driven place. So through that's how their relationship and trust builds and we grow from there. 

Jason Pereira: Let me just get my Canadian banking rant. I am so tired of this populace having been ... We have the worst case of Stockholm syndrome when it comes to banking I've ever seen in my life. These companies convinced us they got to be large and because that's security. Meanwhile, securities actually provided through regulation, not through their size and scale but meanwhile the only thing they can to prevent competition, indoctrinate the public into believing that they need the security of a large bank and then we proceed to be one of the most hosed populations for fees in the history of mankind. And everybody turns to hate at least one bank love another one. But they all love investing them because they pay a dividend to which I say, "Great, you give me $100, I'll give you five back every year and you'll be happy." Anyway, that's my rant. 

Phil Barrar: Absolutely, absolutely. 

Jason Pereira: Let me continue on. As you can tell I like competition because it breeds options and lack of complacency and lack of exploitation. We don't have that in this country but go on. 

Phil Barrar: And fintech is pushing that forward and it's interesting you said that regulation is the one that protects the consumer, not the large banks, and you [inaudible 00:21:08] 2015, 2016 I would say fintechs in Canada where typically, "This regulatory landscape sucks. We have to go through the regulators and they take forever." 

Jason Pereira: It's like guys aren't used to rules. 

Phil Barrar: Exactly, but at the end of the day, I mean we love it because for the exact reason that people are seeing whether another $20 exists is the reason why our regulatory landscape exists. And we think it's extremely important because if one fintech or "FinTech." Was to come in and doing anything devious with the product offering it would ruin it for everyone, right? And that's not the message and it shouldn't in reality. So we actually love the regulatory landscape here and working with them it's actually been quite pleasant, quite flexible. You'd be surprised but I think the regulators here are great. 

Jason Pereira: Yeah, I've heard wonderful things about they've been far more forward- thinking, especially in recent years than they've been in the past. And frankly, you made the point about protection is what creates the trust and we need the trust, right? I look at my industry and every time some yahoo person calling themselves an advisor without any credentialing and barely any regulation ends up stealing money from people it's a black market anyone who's actually doing the right job, right? And I think to myself, "Imagine a recognized name robo turned out to be a massive scam." Right? How much would that hurt everyone else in the fintech space? Not just the robos, but everyone else. So, yeah. Anytime you start dealing with other people's money the bar for regulations should be incredibly high, but I will say it again. It's regulation and enforcement that does that. Not the size of a bank. If anything, there's a counterproductive argument there about how that actually prevents proper enforcement because they become too powerful. So one of the other things I really like that you've done here is that you've basically also teamed up with CanadaHelps in order to basically facilitate charitable giving. Can you talk to me about that? 

Phil Barrar: Absolutely. So using the Mylo platform you can set up a goal directly to donate to your favorite charity across Canada. Working with CanadaHelps we're plugged into 86,000 charities across the country and essentially you can put your spare change to work either for you or for your favorite cause. So we have people donate all their to the cause that they want and then directly within the mile application to get access to your charity receipts that you could use for tax purposes at the end of the year. 

Jason Pereira: So that's fantastic. So I also note here that you've talked about some concierge-type services. Can you explain to me what you're doing in that space? 

Phil Barrar: Absolutely. So we most recently launched a beta of Mylo Adviser. Mylo Advisor is a messaging-based platform where can ask one-off questions to a certified financial planner and be able to essentially get access to financial advice. Typically these are things where people could get access on Google with maybe minutes to hours' worth of research, but they won't be able to ask a reliable source that they trust things like, should I buy or lease a car? How much house can I afford? How do you negotiate a raise at work? Essentially having a financial buddy that's there to be able to help you with all aspects of financial life. The beautiful thing about Mylo is because you're plugged in directly to the Mylo platform, then your banks are directly connected, but you don't have to go through all of these series of budget and debt and all of these random questions that you need just to get some value. You can get some immediate value with this one-off touch. So we're really excited about that product and bringing that to market. 

Jason Pereira: Excellent. So one of the interesting things you said when we were chatting before the podcast started was that I talked about how I've been at conferences and advisors have just responded to fintechs on stage with just hatred because they see them as a threat. And one of the things that you said, and I commend you on because I see this as completely true, is you're not really in competition with advisors. You're trying to turn people who aren't savers and investors into savers and investors. 

Phil Barrar: Absolutely. And one of the really interesting stats that we don't really talk too much about with Mylo. So this is a little sneak peek here. Most Mylo users are high-income users for the age group. Meaning that if you're 24 years old and you're making $65,000, making more than an [inaudible 00:25:09] income. So these people do not have difficulty earning money. They have difficulty saving and investing their money. Right? And I think that's true for a lot of the Canadian population. We need to be able to start putting together the right practices in place and it's something everyone wants to do, but it's more financial literacy through doing versus financial literacy through learning or education. 

Phil Barrar: So for us, Mylo's helping you build those skills through action and get started and put money aside and you know what? We hope that opens up the door to a more financially savvy consumer and seeking out the best product and service on the market. So that's really our objective at the end of the day is helping as many people as we can put together the right practices and you know what? Sometimes they'll graduate from the Mylo platform to a more sophisticated platform, which is totally great. Mylo can also scale directly with the user as well in terms of all their financial needs. There's no difference in investment strategy for us between one dollar, or $100,000, or a million dollars, but that's what we want to do at the end of the day is just try to raise the overall bar in the Canadian space. 

Jason Pereira: And it makes sense. I mean you're absolutely right. You're not in competition with the average adviser because there was a really good article that Michael Kitces published on basically sub-segments of the industry there's the obvious of do it yourselfers, the delegators, and validators. The ones who just want you to tell you ... Consult with you for a little bit, tell you you're doing the right thing and move on. But then there was the asset segments, right? So everybody's in competition for the, well, of course the ultra-high net worth down to, we'll call it to the mass affluent market, right? That's where the traditional market is basically segmented in or basically targeted. Then you have this other segment of the market that has good earnings but not good assets, right? And you have this third segment of the market, which basically is tight on both, right? 

Jason Pereira: And frankly, I look at your product as being able to basically service the latter two very effectively and this is probably the majority of the market as opposed to the minority. So yeah, good on you for basically turning into savers. So by all means, I hope you succeed because you're right. If guys like you succeed, there's more business for guys like me if that happens. So before we wrap up, three questions that I ask everybody. The first one is if you had one wish for something you could change in the industry or company, what would it be? Open banking? 

Phil Barrar: So I'll tell you why that's not my wish. Open banking, it's a blessing because it has more secure connections that are more reliable and stable and offer a better user experience in the perfect world but it's not a perfect world. So at the end of the day, if open banking comes, when open banking comes to Canada they'll probably give the bare minimum of transactional information, bare minimum of data that you need. You can get account numbers. So users might have to go back to taking photos of void checks to put it back on the app, right? So creating more friction rather than less friction, which would be absolutely a nightmare for the user. Right? So open banking could actually help. It could also really hurt depending on how it's implemented. 

Jason Pereira: And I will say one thing, if you are ... Before you answer your question. If you are a technology person at a bank with some level of authority, let me just repeat what I've said in the past. Friction is not a way to keep your client. Friction is a way to piss them off. And I'll tell you right now, if one of you big five enterprises decides to ever be the one to say, "You know what? We're not going to be a pain in the ass. We're going to do everything we can to enable open banking." It's a winner take all, unless everybody else does the same move. So you can either be the person who steers into the disruption and gets the business for it or you can be a jerk, your call. Let's move on. Your answer. 

Phil Barrar: The one thing I'd have a wish for in the industry. There are friction points with regulatory that I think they're new and technologies that have been around to be able to help enable this and make it more accessible to everyone. So I think a little bit of an easier process to be able to navigate those waters and be able to do so. I praised the regulators earlier about how I think they're protecting the consumer and that they're very open, but I'm not sure they're open enough yet and photo ID, for example, something that just came into effect recently. You can verify your account, your identity using photo ID now. So that's one thing I think we've been a little bit behind on is how do we get people up and running? 

Phil Barrar: The other thing we're behind on is our payment rails. For a country that has some of the best banking infrastructure we have some of the worst payment rails here. That causes poor user experiences. We send the money immediately when a user withdraws their money, but it only gets to their bank account the next day and that's on their bank. It's not on us. Right? 

Jason Pereira: It's a feature, not a bug.

Phil Barrar: Yes. 

Jason Pereira: Meaning that they want it to be that way, anyway because otherwise, I mean, because if you can transfer money seamlessly to a neo bank online then they'd have more competition. They wouldn't have a pain in the bug friction point. Anyway. So no surprise this is turning into a bank bashing session for me because anytime we interview someone doing something good in your space, the biggest problem is always the existing infrastructure. So your wish may also relate to your second question. What's been the biggest challenge in getting to where you are today? 

Phil Barrar: So it's interesting, I'll tell you a little bit about our seed fundraising experience. Pitched a lot of VC's and during the seed round of funding a lot of VCs made it pretty clear that it's more exciting to invest in technology company that's not in the financial regulated space than a company like in fintech where you have to spend millions of dollars building the right regulatory infrastructure and security infrastructure before you even onboard your first client. Right? So the bar to get started in fintech is so much higher than the bar to get started in almost any other industry. So I think setting that bar so high with a bootstrap limited resources to be able to go and do so really made other companies that were not in the space a more attractive investment opportunity than Mylo. Right? Once you get to that growth stage, the tables turn a bit, but that was the real difficult part in the early stages. You just have to get everything up and running before you can go and validate, which goes against the lean startup methodology. 

Jason Pereira: Yeah, I mean it's interesting. I've had a couple of people come to me and say, "I want to go get funded on this idea." It's like, "Okay, that's great. What have you built?" "Well, I have a pitch deck." I'm like, "Good luck to you." Maybe you build something first and maybe you sit down with the regulators and make sure he can do it first because otherwise, no one wants to pay for your regulatory relations until you actually get it going. 

Phil Barrar: Also it's a million dollars get the first customer on the board. That's the cost that takes to be up and running in fintech. 

Jason Pereira: It really is. But I mean and talking about infinitely scalable systems, right? So it's like the old saying about developing for the US military. The first one costs $10 billion. The second one costs 10 cents. Right? Same thing in pharmaceuticals. All right, so the last question is what excites you the most about what you're working on and gets you up every morning to keep doing what you're doing? 

Phil Barrar: I would say the messages we get from our users. It is a volume business model for Mylo, but the stories that people tell us, saving up to propose to their husband, or taking their first trip that they've taken, an emergency fund to help them feed their kids when they were in crisis, or most recently a set of dogs that were adopted and they're now the new Mylo dogs. We get updates all the time. They're fantastic. Just hearing these stories and the impact you have on people's lives is truly incredible. So at the end of the day, if you can build a company that has a social mission and can also be sustainable in terms of economics, that's what I would strive for everyone to go and do. 

Jason Pereira: Yeah, the most wonderful part of my day job is when you get to do ... you get to really impact effective change on people's lives and by their lives. How many industries can you really do that? Really have that impact? Not many. Right? And unfortunately, the tragedy is that all too often the people who need the most fundamental basic advice are the ones that we never see. Either because they never come to us or because we can't afford to take them on because they're not scalable. So I'm thankful that guys like you are doing some of this work and for those of you who feel the same way as I do and are in Canada, the newly minted Financial Planning Association of Canada, we're organizing a pro bono effort altogether. So if you're interested in that visit our website. 

Jason Pereira: But anyways, so thank you very much, Philip, for basically taking the time. This was great. I encourage everybody as always to check out the guest's apps and their sites. I think what you're doing is great. It's clean, it's very fundamentally needed and you are targeting and underappreciated and under-serviced part of the market that desperately needs support. So [crosstalk 00:33:39]. 

Phil Barrar: Appreciate it. 

Jason Pereira: Yep. 

Phil Barrar: And thank you for having me. 

Jason Pereira: My pleasure. So that was my interview with Philip from Mylo. Hope you enjoyed that. And as always, if you enjoyed this podcast, please review on Apple Podcast, Stitcher, Google Play, or wherever it is that you get your podcast. Until next time, take care. 

Speaker 3: This podcast was brought to you by Woodgate Financial, an award-winning financial planning firm catering to high net worth individuals and their families. To learn more, go to woodgate.com. You can subscribe to this podcast on iTunes, Stitcher, and Google Play, or find more episodes at fintechimpact.co.