Making finance ‘for customers’: Interview with Ephraim Zuriel from EZsave

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EZsave is an Israel-based startup that helps its clients save money by negotiating the best deals on their utilities and other recurring expenses.. Just eighteen months after their kick-off as a consultancy firm, they had already saved $250,000 for their close to 200 clients.

Following their launch as an online platform early this year, we interviewed founder and CEO Ephraim Zuriel to hear more about their inspiring journey until now, and where they’re headed in the next few years.

Could you tell us how it all started? What gave you the idea to start EZsave?

I actually started my first business in 2004 in a completely different field. I still have a partner running that business full-time. I left and spent three years in the Israeli army and then went travelling with my wife to South America and New Zealand. When we got back, I was looking for my next venture. I started volunteering with an organisation that helps families with their personal finances, making sure they’re not overspending and making sound financial decisions. Around this time, I sat down with my grandmother to go through her bills, and I realised I was able to save her 6,000 shekels (around $1,500) just by renegotiating her contracts with her providers and shifting things around. Then, a few other people heard about it, and it just kind of snowballed into a consulting business, which within 18 months had close to 200 clients, and saved close to a million shekels ($ 250,000) for them.

I realised that, obviously, there’s a business case here, and I started thinking about how to get this to the masses and scale it up to something that can be more substantial. We ended up designing a platform that would allow people to upload their bills and access the service from any smartphone or PC, from anywhere they want. We launched at the beginning of 2016, just 4 months ago, so we’ve been live for a few months now.

For how long did you run EZsave as an offline consultancy?

Just under two years. I kept having new customers who heard about the service through word of mouth. I didn’t really do any advertising. People just recommended it. It was a profitable business with a good business model, but you get a lot of overhead of offline tasks like meeting the clients and individually managing and negotiating with their suppliers.

Now, with the platform, we’re eventually planning to automate most of the processes, so that there’s very little human interaction on the back end. In this way, we can handle a large amount of bills without having to sit down with each client and make every single deal individually. So that’s part of our vision. We’re working on it now. We’re automating parts of the process. And, eventually, we’ll be able to give people an ongoing monitoring service. Basically, once they plug into our platform, we can then be on top of all their services, giving people peace of mind with the knowledge that all their bills and expenses are being taken care of.

What else are you working on now?

Right now we’re figuring out what exactly is the right product-market fit for us. There are a few challenges, obviously. We’re a B2C company and that has its own challenges on how you acquire customers and also how you give a service that is ongoing, that people are engaged with. But I think it’s definitely a real and global issue we’re dealing with. Wages are stagnating, people in many places are struggling to make ends meet or they feel like they could have more disposable income. We’re giving them a practical tool that can save money for them and that fits with our modern lifestyle of “I don’t have the time to deal with this, but here’s an app that can do it for me.”

You mentioned building your customer base as a challenge. Do you also need to strike deals with utility companies?

At the moment we don’t want to be dependent on anyone else for our success. We could have gone with the strategy of linking into the providers, but it would have been very difficult to get their cooperation from day 1. So it makes a lot of sense to first focus on growing our client base and then going to companies when we have more power. And also we don’t really need their cooperation at this stage. In fact, it’s a bit to our advantage that we’re under the radar as far as they’re concerned.

I think, as we develop, we’re probably going to do things that are not only saving people money, but also potentially offering them new services that create a win-win situation for everyone. We could give our customers off-market deals, the companies could qualify hot leads, and we could profit on the connection. So that’s potentially part of our growth strategy; and, in that case, we will involve the companies more.

Could you tell us more about the story of transition from an offline to online service? Did you have challenges moving your existing customers to this new platform?

It’s definitely a learning curve. Online and offline are very different, both in terms of the type of clients and their attitudes, for better or for worse. What we found with online, at least in Israel, is that people seem to be a lot more willing to share information, a lot more trusting. They’re not so worried about uploading their details or sensitive information. We have now started a pilot offering banking savings and people have been uploading all their banking information, which some might consider sensitive.

And then, of course, online allows you to reach masses. And then there’s the age issue. My grandma is not going to be using an app unless I’m doing it for her. This is actually an approach we’re taking: getting younger generations to help the older generations access our platform. I think, down the line, we’ll potentially try to get people onboard our platform once and then they won’t even need to upload their bills to the platform each month as we will be able to continuously get their bills from their service providers electronically. . In any case, technology will be key in monitoring large amounts of clients and bills.

Could you talk a bit more about the pilot you’re running on banks savings?

At the beginning of this year, the Central Bank of Israel introduced a regulation to all the banks that forces them to send a document to every one of their clients detailing all of their information, once a year. This should show what their banking status is, what their loans and deposits are or, basically, all their banking information in one PDF document. With this document, we have access to information like your interest rates on loans, your bank fees, your deposit rates; and we can actually compare these for different clients, and see that maybe two clients of the same bank are paying different rates. And then we can actually help clients use this crowd-sourced knowledge to negotiate better deals with their bank. To put it simply, we’re starting to do with banking what we’re already doing with other services.

But banking is a lot trickier because the calculations are a lot more complex and there’s the whole issue of credit scoring, which is not so clear in this country. There’s no central credit system, so it’s very hard to compare one client’s data to another’s. Nonetheless, there’s definitely a need for our service as clients feel they don’t have any way of dealing with these financial institutions, and therefore they’re more than happy to find someone to help them make it clearer.

So if we can actually take the banking information and break it down for them, and instead of showing them all those percentages, and plusses and minuses, and concepts that no one has any idea what they mean, if we could actually say ‘we can save you 1,000 on your banking,’ that’s something that no one else does at the moment. That’s what we’re trying to do.

And down the line I think there’s a lot of opportunity there as far as offering better rates on deposits, better interest rates, better fees, creating an allegiance system for other banks, moving people between services and potentially opening up to other markets.

Once we have all the information – and we already started to aggregate a lot of information – we can then bring in other service providers that aren’t in the banking system, such as peer-to-peer lending, deposits, and potentially adding others such as insurance companies or other institutions. So it really gives us a way of looking at people’s financial lives holistically. That’s really a big added value, which no one else gives. Maybe a bank knows all about you, but they don’t have any interest in sharing that information with anyone. We can do that because we’re on the customer’s side, which is kind of a game-changer in this field. 

You seem to be set on disrupting the existing model. Have you had any push back from the incumbents?

It’s really interesting. The biggest banks and insurance companies in Israel have actually been talking to us. They definitely want to know what we’re up to because I think they understand the way the world is going. FinTech is here already. It’s either us or some other startup that comes and threatens them. So they’re actually very keen to collaborate and keep a close eye on what’s happening.

Building on that, can you talk a bit more about your vision of financial services in the future?

There are a lot of innovative ideas that are changing and disrupting what would be traditional banking roles. They may be simple ideas, but if you think about it, they eventually make it possible to circumvent the bank.

I think people are also becoming much more knowledgeable and interested in their financial situation. If you look at the way the world is going, our parents’ or grandparents’ generations could depend on retiring at age 67 with a decent pension. If our generation doesn’t save up their money and invest it wisely, we’re not going to be able to ever retire, and we’re not going to have any safety net. People are stressed about this, and they want to find ways to protect their money. And they don’t trust banks as much as they did before, so I think we’ll see both investment and cost-saving apps coming from grassroots.

If we take insurance companies – and we sat with insurance companies and tried to point out that there is a big issue – they are motivated by selling as expensive a policy as they can sell because it makes more money. They’re in a complete conflict of interest with their clients. They’re going to need to figure out new models, and they know it. I think insurance is very, very scared about what’s going to happen in the next few years because insurance agents are going to be a dying breed. People are actually saying I don’t need an insurance agent anymore. Why should I be paying 15, 20 or 30% more for a middleman?

Also the big tech companies like Facebook or Google are just starting to spread their wings in this field. In fact, Google could be the biggest bank in the world tomorrow if they wanted to. So in five or ten years time, we will be in a completely different place than where we are now. We’re in very interesting times, and we want to be part of it, step ahead and push the boundaries as much as we can.

You mentioned that people don’t trust financial institutions as much as before. Does this pose any challenges when you think about the partnerships you’ll make?

Despite the loss of trust, I think banks are still considered as highly trustworthy brands in most countries. So that’s why for us it is an interesting way to get to clients. Also, what’s really interesting about banks, which is why we approached them originally, was that they have all the information we need to perform our service without having to ask the customer. With the bank’s data, I’d know what customer is paying for the services. I’d have all the personal information. The customer would just need to press one button and then we can get all the information from the bank directly. This makes a partnership with a bank interesting for us.

Also, I don’t think we’re necessarily a direct threat to banks or insurance companies. They need to figure out their model, in any case. I don’t think we’re the issue here. In fact, I think to a large extent we can actually be beneficial to them. We can serve as a retention department for banks, insurance companies and service providers. They will have to cut the costs for the customer, but they’ll get to keep the customer, and keeping the customer is paramount. They need to keep the customer at any cost.

I heard you’re planning to move into the US as a next market. Could you talk a bit about that?

It’s simple. Israel has a population of eight million people . The US is a 330 million population. So you actually have the potential of breaking through at a much larger scale. It’s not necessarily easier but you don’t have a glass ceiling.

We actually started a pilot with real customers in the US. We did market research in several different English-speaking markets. We looked into the US, UK, Australia and South Africa. The US is promising, as it is similar to Israel in the way that services are structured, and there are no providers that are doing exactly what we do. We also have some partnerships in the States, which will help extend our reach to clients. So we’re aiming to launch in the US at the end of the year if all goes well with the pilot, fundraising and a few other elements.

This post was originally published on Claro Partners’ blog, Disruptive Shifts.

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