Common Sense Prophet

Growing up in a two-bedroom Bronx apartment shared by 12 family members, Wendy De La Rosa learned to make every dollar count. Now the Wharton and Goldman Sachs alum is helping fintech startups understand how real people relate to money.

- Kristin Stoller

ENDY DE LA ROSA, the 29-year-old cofounder of Common Cents Lab, proudly recounts an experiment she ran a few years back with Digit, an app that tracks users’ spending and moves free cash from their checking account into savings. One group of users was sent a text message in February before they got their federal tax refund, asking if they wanted to save part of it. Another got a similar text right after the refund hit their checking account. Those responding to the early message saved an average of 27%, versus 17% for those who were texted later. When you consider the average refund is $2,900, that’s an impressive chunk of extra savings. “Every dollar that leaves our checking account, we feel that loss over and above the economic loss of that dollar. It physically hurts us to lose money,” De La Rosa explains. In other words, it’s easier to save money that you never saw in your checking account.

The 5-foot-1, ponytailed De La Rosa is a guru of one of the hottest trends in fintech: Startups are increasingly designing (or tweaking) savings, investing, insurance and employee-benefit products based on the insights of behavioral science. For example, Lemonade, which sells renters’ and homeowners’ insurance, attempts to discourage phony claims by donating excess profits (over its agreed-upon share) to charity. Chime, an online bank with 2.6 million accounts, allows members to automatically transfer 10% of every paycheck directly into their savings accounts. Why 10%? People “think in round numbers” when asked how much they want to save, says De La Rosa, a member of the 2018 Forbes 30 Under 30 list for finance.