Mastercard and Citi Ventures were among those that invested $35 million in a contextual data company called Flybits this week. Westpac Banking Corporation also invested in Flybits through Reinventure, and TD Bank had already invested in previous rounds. This round of financing takes the total funding to date to $50 million.
The investment by banks and credit card companies is of interest as Flybits leverages data science to gain information on consumers. Digital transformation and personalization is a hot topic among financial institution and consumer watch dogs. At its best, it helps improve customer experience, but regulators also raise concerns over how data is used by banks when it comes to consumer’s spending trends that they have access to through bank accounts and credit cards.
Flybits transforms data into an ecosystem that provides real-time insights. It assemble’s the bank’s proprietary customer data that includes bank account activity, but seeks to uphold privacy protection. The company is also looking to develop a marketplace that will help large banks and fintechs form partnerships.
“Banks are looking for ways to maximize their use of data and better engage with customers, but are having a hard time executing and scaling this on their own or by leveraging passive PFM (Personal Finance Management) services,” said Dr. Hossein Rahnama, Founder and CEO of Flybits. “Flybits enables banks to use real-time data and contextual intelligence to shift to those new models and go to market with them faster without over reliance on their IT department. We were looking for investors who share this vision with us and could become a catalyst in our global growth, and that is what we have found.”
Government and consumer protection agencies are looking to get out ahead of the technology to make sure it is utilized properly. For instance, the European Union is developing guidelines for banks to follow that limit financial institutions from soliciting too many products based on market data.
But banks that are signing on to this technology insist that it is the best thing for their customers. “Personalization is mission-critical for all D2C businesses in the digital age. Flybits’ integrated platform allows financial services firms to offer contextualized experiences, driving product awareness and adding significant value to the lives of their customers,” said Ramneek Gupta, Managing Director and Co-Head of Venture Investing at Citi Ventures. “We look forward to partnering with Flybits in its next phase of growth as it continues to set the bar for hyper-personalized customer experiences.”