ZATM

Financial freedom in your pocket. ZATM is an AI-backed financial marketplace that helps Gen-Zs invest individually and collectively.

There is a huge debt crisis in our country which is perpetuated by a culture of bad financial habits. A study by a financial institution- Deloitte, has reported that 40.57% of South Africans are financially illiterate and 70% of South Africans spend all or most of their monthly income each month. A Burger and Calitz study reported that South Africa’s  debt-to-GDP ratio has increased by 37.5 percentage points in ten years, from 26% in 2008/2009 to 63.5% in 2019/2020. The scale of the debt crisis in underprivileged communities which make up the vast majority of the population, is rife. Consumers in South Africa need to spend around 63% of their take-home pay to service their debt, data from debt counselor DebtBusters, shows. Factors that contribute to the problem are inflation, interest rate increases , financial corruption and mismanagement institutions, wastage and lack of financial literacy.

 According to an article published by the Citizen on financial literacy report :  “Young people were found to have relatively high levels of knowledge and understanding. However, their level of financial literacy was low. The yearly Momentum/Unisa Science of Success Insights report has similar findings. It says that the youth are over-confident regarding their financial abilities but scored a very low average financial literacy of 36 out of 100. For the past 10 years, the report has aimed to give South Africans tools to help them understand and manage their financial health. According to the report, many South Africans are financially unwell because of poor decisions and/or financial illiteracy.” 

The consequences that result from these circumstances is people have a very low quality of life, they live in financial hardship, the lack of financial security also increases crime rates thus, as a result, people do not have freedom, peace and choice. 

ZATM is an application that is underpinned by artificial intelligence and behavioral psychology. It has the following features:

1. Users are able to open multiple savings and investment accounts. They have the option of saving and investing individually. 

2. Each user will have a Financial health calculator that signals whether the user is on a positive or negative trajectory according to their activity 

3. AI chatbot (Zbot) will help users by presenting them with ideal investment options to choose from based on their needs

4. Gamification: The main purpose of gamification is to encourage good financial habits in users through behavioral psychology. E.g. The use of Z-bucks for awarding good financial practices.

5. A bar that visually represents the user's financial practices in the form of pie charts and graphs and gives an annual summary of the user's activity on the platform like how Spotify gives a fun yearly music habits wrapped. 

Explanation of how the app works:

• A user will create an account. Users will be able to choose a language of their choice*. Then Z-bot, our AI chatbot and personal assistant will ask the user a few questions to determine the user's preferences and financial habits. Z-bot will then recommend investments opportunities for users based on the information the have provided.

• Users will choose the investment(s) best suited to their needs. 

• Users will deposit money into their ZATM account through an EFT payment. This money will be allocated to their account.

• Users will then invest in their chosen investment. Then a confirmation of transaction will be sent to them.

• The users investment will be executed at a favorable time during market operating hours.

*South Africa has 11 official languages. We will start with 3: English, isiZulu and SeSotho. Once we have additional capacity and capital, we will add more languages as we scale.

ZATM is geared towards Gen-Zs from underprivileged socio-economic backgrounds in South Africa. There are limited investment options for cash-strapped young people in South Africa. ZATM offers young South Africans investing opportunities that are in line with their budget and free of excess red-tape and complexity that is associated with investing. Instead of waiting to accrue R1000 rand to invest or spending hours on finding appropriate investments,  we do the work of finding and aggregating investment opportunities that do not require initial capital or have low capital requirements. In essence we build a marketplace of investment solutions and harness the power of artificial intelligence and behavioral psychology to build and maintain good financial habits in our user. 

What makes our team so closely connected to the problem that we have created a solution for is because we are confronted with its consequences in nearly every aspect of our lives. There are constant physical reminders of financial hardship and insecurity that persists in our communities and to an extent, some members of our respective families. In our families, financial insecurity has resulted in a lack of access to quality education, healthcare and among other factors, a low quality of life due to scarce financial resources being used to cater to large family members who also live in debt. There are many people our age who do not live in affluent communities and therefore do not receive quality education that would give them access to financial insight that they would need to successfully save and invest. Apart from this particular group, statistics have shown that even students from better educational institutions do not have a grasp of key financial concepts. Our core team currently consists of 3 young individuals who are in the age range of our target market - 18 to 25 therefore we understand and have experienced the need for a product which offers a solution to our problem in a manner that is technologically innovative (gamification) in order to appeal to our target group. Our group has the combined skills of entrepreneurship training, design software, cyber security, digital marketing, coding and legal compliance. Our quest to change the culture around money starts within our age range specifically because we know what stigmas and practices inform the culture around finances which persists.

Our team has conducted research with potential users in the form of surveys distributed on social media platforms such as google surveys, instagram polls, student forums and email platforms. We have also placed the concept of our app on public platforms where potential users have informed us of their need for our particular service, their likes, dislikes and suggestions. Conducting research with our target market has proven fruitful because we have been able to answer their questions as well as form a base community which supports our vision and mission. Due to the fact that we are in a pre-product stage, it has been really important to us to receive feedback on our concept from both our potential users and individuals who have been heavily involved in the financial technology sector and entrepreneurship. We have received positive feedback in this regard and have attached the feedback in the text below 

“The integration of a gamified financial literacy component is game changer and poses the

best of both worlds on the same platform. This has the potential, to foster a savings culture

in communities. The platform should also consider expanding the financial literacy element

to the trading design (assessment style) before users can actively start to invest. The

proposal should consider also including a brokerage team for the transactions and this needs

to be in the costs as well as check compliance with the FSCA.”

Our team is currently in the process of potentially forming short term projects with an organization that tackles a similar problem through their financial literacy curriculums. This will give us an understanding of any challenges that we may not be aware of, the different forms of financial insights and products available for production as well as maximize our current potential to interact with the changing needs of our target market. 

We also aim to have a website that has aspects of financial literacy in order to educate target users that may not be on popular social media networks.

Our solution is formulated with the massive goal of transforming a culture of negative financial practice that persists inter-generationally in our communities. Therefore, we do expect our product to change the market or enable broader positive impact from others in this space. Our solution will be a disrupter because it employs behavioural psychology techniques to determine what our target market values in order to change how this group approaches money- thereby being a disruptor in the market and making strides to alleviate the debt crisis in our community. Our solution prioritises the results that we aim to see in our communities which is the attainment of freedom, security, peace and choice. Most of the fintech applications in our community are solely focused on the tech that supports their application while neglecting the bigger picture which makes for an inadequate solution. We use technological innovation as an instrument to create a pathway to financial freedom and insight. 

Our impact goals are to:

1. Provide Gen-Z South Africans with a mobile app that allows them to practice their financial insight provided by ZATM platforms, using our financial offerings, in a local language of their choice.

2. Digitize Stokvels ( a South African term for group investments) to make them more accessible and understandable to the youth.

3. Put our users in better financial position though a gamified, AI-assisted financial journey

4. Aid Gen-Z South Africans in transitioning to the world of cryptocurrency

All with the ultimate goal of bridging the gap between Gen-Z South Africans and Financial Health as they transition into the working world and drive the future economy.

Our solution will take the form of an app*. Artificial intelligence and data analytics form a pertinent aspect of our app. AI helps users identify the most suitable investment opportunities for their needs. Data analytics provides users with an overview of their  investments (including collective investments stockvels)  in a digestible format. Blockchain will power our cryptocurrency options, mainly Bitcoin, Ethereum and USD Coin. 

Our app is still in its ideation stage therefore we do not currently have a finalized product to launch on the market. However, through research, previous competitions and social media,  we have amassed a following of 61 people and over 2000 viewers of our content. In the next year, we would like to grow our following to over 500 people and once our app is running, ideally over 1000 paying users in the first year.

Our greatest barrier is our current financial position as we have yet to secure investors and the necessary funds to realize our dream. Subsequently, our small team has yet to acquire the technical expertise to realize our vision into a functioning app that is marketable to our target market. We would thus need to outsource financial and technical knowledge for which we would need capital - capital that we have yet to acquire - in order to enter the next phase of our development.  We are in the process of onboarding personnel with the core skills that we currently need. 

The team lead - Tumelo Noah is currently working with the Allan Gray Orbis Foundation as  candidate fellow and the Jim Leech Mastercard foundation on Entrepreneurship as their fellow. Both organizations train me,Tumelo Noah, on all the key insights of entrepreneurship (solution building, design thinking, pitching, market analytics, critical thinking etc) networking and leadership. 

Problem:

The gap between Gen-Z and Millennial South Africans and financial health with minimal risk.

The delocalized nature of the financial landscape.

The accessibility of comprehensive financial literacy to marginalized groups.

Solution:

A localized financial investment mobile app  give a holistic view of one’s financial health and provides

Beneficiary Segments: 

The beneficiaries of our solution are primarily young gen-z South Africans with limited access to financial literacy; as well as non-english speaking people of color. Our intervention provides smartphone users with an app that allows them to learn, practice and benefit from positive financial decisions, whether individually or as a group (stokvel), in the local language of their choice.

Our intervention thus injects traditional money practices into new technologies, facilitating a smoother transition into the future of currency.

While accessibility is our primary goal, paying users have the added benefit of a more curated experience with earlier access to in-app perks, information and professional insights.

Social and Customer Value Proposition:

Our platform permeates the language barrier and caters to non-english speaking South Africans. Beyond our saving and investment functions, financial literacy is ingrained into our app so our users make informed decisions. Learning and Practice are centralized to create a unique and comprehensive experience. Additionally, our founding team falls within our target market and is thus able to have an intricate understanding of our peers, their lived experience and their relationship with financial health and literacy.

Impact Measures:

Cost Structure:

Our biggest expense is an annual fee of 45 USD and an additional monthly fee of 3,5 USD for our website domain and email address. In the future - app development  will become a part of our cost structure. 

Revenue:

We intend to generate revenue through

1. Google Ads

2. Affiliate Marketing 

3. Premium User Subscriptions

Surplus:

Initially, we intend to invest our profits back into our platform and to diversify our offerings. 

Our path to financial sustainability involves a combination of raising investment capital and attaining government grants that are awarded to technologically innovative solutions in our country and internationally. Once we receive enough capital to create our app, we will generate income by earning a commission on each transaction made on the app, charging a management fee (regulatory structures) for group based savings and investments, deducting a certain percentage from investment profits only, minimal affiliate marketing, an investment feed with appropriate ads and a penalty fee deducted when a user withdraws from their wallet prematurely.