Microsoft will stop selling its Microsoft Money packaged personal finance management (PFM) software at the end of this month (FAQ here). Online services will expire Jan. 31, 2011, or earlier depending on when users activated their program.

The company will continue its online-only account management and bill pay services at MSN Money. Banks supporting direct downloads to the program, such as US Bank and Wells Fargo, will have to migrate users to other options, most likely Intuit's Quicken.

For me, it's an end of an era. The main reason I became involved in the online banking industry was to participate in a four-bank group that worked with Microsoft to add online banking and bill pay to Microsoft Money 3.0 (note 1), released in Feb. 1994 (see inset). It was an industry milestone and a major coup for the company at the time, bringing online banking to its PFM more than two years ahead of Quicken. 

So, after 15 years of using the program, I'll finally have to make the long overdue move to QuickBooks to manage our company finances. But to be safe, I'm going with QuickBooks online, which I'm guessing will not become obsolete in my lifetime.

Microsoft Money Plus page announces the end of the line (link, 9 June 2009)

Notes:
1. According to Wikipedia, Microsoft Money is currently on version 17.

Usually, it's the big ideas that get all the press. Last week alone, Microsoft launched a new search engine (Bing), Google announced a new way to communicate (Google Wave), and Facebook began rolling out an alt-payment service to its 200 million users. 

Those have intriguing long-term ramifications, but can they save you money today? 

Here's something a little more pragmatic: A tool that promises to make it easy to challenge your tax assessment, potentially saving hundreds or thousands of dollars annually. Enter LowerMyAssessment.com (LMA).

I saw a few screenshots of the service during the company's application to debut at FinovateStartup 2009 last month (demo video here). But I couldn't use the service until a few weeks ago.

How it works
Consumers visiting LMA can use the website's free tool to check their home's value against current market estimates. LMA taps public databases to determine tax-assessed values and calculates market value from various third-party sources such as Zillow.

The company then makes the simple math calculation and informs users if the value of their home is under the tax-assessed value. If it is, LMA provides forms and instructions to challenge tax assessments with the local assessor's office.

In our test case, using an address in Seattle, one of 10 states currently served by LMA, we were told that its assessed value was $300,000 more than the market value (note 2). LMA encouraged me to register and let them help me challenge that assessment.

Registered users complete an online form with info needed to challenge their assessment (see screenshot 3 below). After completing that form, users must pay $125 to complete the challenge process and receive their FairValue Report (shown above).  

Analysis
While the cost-saving potential is significant, the challenge for LMA is getting consumers to shell out $125 for something they can conceivably do themselves (note 3). It took us just a few minutes using Google to uncover the challenge forms and procedures at the King County website. And market value estimates can be pulled from Zillow and its competitors.   

To reduce sticker shock, the company recently removed the big $125 price tag from its homepage (see screenshot 1) and is now emphasizing the free lookup feature (screenshot 2). I can understand downplaying a three-figure fee, especially online. But now they've gone too far the other way. I cannot find the price of the service anywhere on the website. It wasn't disclosed until I completed my registration and filled out the challenge form (see screenshot 4 below).

There's also the small matter of getting the word out. The major market opportunity will largely be gone once home prices get back to their pre-recession levels, even though there will always be cases where consumers feel their assessment is unfair. But LMA needs to team with major financial or real estate firms as soon as possible to reach large groups of potential customers. 

Bank and credit union opportunities
As discussed in previous posts, direct fee income is scarce in online banking, at least in the United States. Aside from credit bureau monitoring, there are few up-front fees that consumers are willing to pay. Certainly, banks earn billions from the underlying checking, debit, and credit card accounts, but nothing from the value added online.

It's possible the service could be replicated by a bank or mortgage provider using available APIs from Zillow or others. But for most banks, it would be far simpler to outsource the service to LMA or other specialists.

If the service were sold for $100+, with revenue shared 50/50, a bank or credit union could earn a respectable profit while providing a unique and free service to customers; however, the folks at City Hall may not be so appreciative. If city government is a big customer, you might tread carefully here.

1. New LowerMyAssessment homepage emphasizes free (2 June 2009)

2. Previous homepage disclosed the substantial fee up-front (12 May 2009)

3. Online appeal form for King County Washington (2 June 2009)

4. $125 (+tax) fee is not disclosed until checkout (2 June 2009)

Notes:
1. States currently covered: Arizona, Florida, Hawaii, Illinois, Indiana, New Jersey, Ohio, Oregon, Washington
2. That was on May 11. Now, three weeks later, LMA shows the house having declined another 20%. Home prices are certainly fluctuating, but not that much. It appears that LMA has switched to using Zillow's low estimate instead of the mid-range one. That may help sell more services, but it's a bit misleading. It would be much better to show the range of potential market values pulling data from all three third-party valuation sites, in much the way RedFin does. 
3. They also have some work to do in clarifying the buying process. It's not really clear exactly what you are buying at checkout. Are you submitting a property-tax challenge at that point? What about the FairValue Report? When do you see that? But we'll cut them slack on that since they just launched a few weeks ago.

Yesterday, Rudder suffered an embarrassing email glitch that affected 732 customers. In the pre-Internet days, no one other than those few hundred customers, and a few of their friends, would have heard about it. Even in the days before blogs became common, pre-2007, it's unlikely the story would have made it to the mainstream press.

And even last year, before Twitter, the story might have died without ever crossing over to the mass media. But when it comes to breaking news and company gaffes, it's a whole new ball game. Everyone wants 15 minutes of fame as an investigative reporter, and Twitter is the dream platform.

I'm going to recap the problem, and how the news broke, in excruciating detail, because it illustrates the power of Twitter- and blog-fueled grassroots reporting. If you are a financial services company, think about how you could use social media to help with damage control should something similar happen to you.  

What happened at Rudder
According to the detailed description first published in TechCrunch and then later published by the company on a new blog created specifically for this issue, an email upgrade the night of May 18 caused 732 users to receive dozens of email updates containing balance and transaction information of other users. Only Rudder users with email addresses that begin with "a" or "b" received the erroneous emails because the company stopped the email job at that point after realizing the "upgrade" had gone terribly wrong.

Besides seeing the info in the email updates, the bigger security/privacy problem was that unauthorized users were able to click through email links to access the full aggregated account at Rudder.com (see screenshot in the TechCrunch article). However, at no time could anyone actually log in to anyone's bank account or move money in any way.

Luckily, Rudder, like all account-aggregation companies, does not include account numbers or personal details in the updates. However, the email addresses of each user was displayed, so any of the 732 customers using an email address at Rudder that can be traced back to their real name, had their financial details exposed to hundreds of users. 

How the news broke
At 5:36 AM yesterday (19 May), Twitter user @adambassador tweeted this:

And @adambassador didn't stop at that. He took the time to search and communicate warnings directly to several other users who'd recently mentioned "Rudder.com" on Twitter. Adambassador would go on to tweet 21 times yesterday about the Rudder problem.

One of the people who heard from @adambassador was financial services consultant and blogger, Mike Linskey (@mikelinskey) who'd just Tweeted about several of the PFM companies he'd seen at our FinovateStartup conference, including Rudder.com. Mike then posted the problem to his Fincision blog at 8:04 AM, and at Mike's request, adambassador posted screenshots of the emails to document the problem, which were then published in Mike's blog entry.

At 10:05 AM, using Twitter, Mike alerted the blog Mashable about the Rudder problem. A half-hour later, Mashable, the fifth largest blog in the country (see note 1), posted the story citing adambassador's tweets and Mike's blog entry. From the Mashable blog entry (below), the problem was retweeted 115 times (see the retweet button below on left).

Then at noon, the second largest blog, TechCrunch, with more than 2 million subscribers, posted the story. And because of high comment activity, it stayed on the top of TechCrunch most of the day (see screenshot below), generating 58 comments.

How Rudder handled it
By almost any standard, Rudder did a good job responding. Although their reply took more than 10 hours since the error was first reported on Twitter, Rudder's CEO posted a detailed comment on the TechCrunch (scroll down to his comment at 4:38 PM here) and Mashable posts, apologizing for the error and explaining in great detail what had happened. 

In addition, Rudder created a special "Rudder Update" blog (see screenshot below) apologizing, explaining the mishap and exactly what info was mistakenly displayed, and detailing the steps they were taking to fix the problem and help affected customers:

• Turned off the email system entirely
• Contacted each affected user individually and offered them a complimentary subscription to an identity theft service
• Engaged an independent security auditor to survey its system and look for weaknesses
• Published a URL for users to go in and delete their accounts if desired

Analysis
Rudder did a good job considering the situation. It was smart to comment on TechCrunch and Mashable, and the new damage-control blog site was a savvy move. And the company did an exceptionally good job with the tone and wording of its mea culpa.

That said, the company could have used social media better. The company's Twitter page (@userudder) and that of its CEO (@nikhilroy) were silent all day. A short Twitter posting, even "we've stopped all emails and are working on it" would have reassured users and potentially made the Mashable post less alarming. Also, the company didn't have a blog, so there was no place where they could post periodic updates during the day. It was complete silence for 11 hours, other than the interview with TechCrunch's Erick Schonfeld mid-day.

Impact on third-party PFM credibility
While this was embarrassing and violated the privacy of several hundred users, there will likely be no financial loss to anyone. There was no data breach or stolen account numbers. Even a single bank account statement stolen from a mailbox could cause more potential financial damage.

And even though third-party PFM providers have had a relatively spotless record for security/privacy, this mistake, now well-documented in two of the largest online publications in the world, will be cited in the media for years, to cast doubt on the security of online personal finance.

It might cost the industry a point or two in short-term market share, but it would take something much worse to materially slow growth. Even Rudder should be fine. By addressing the issue in a highly professional way on the same day, most customers will be reassured, at least those that weren't directly impacted.

The bigger lesson here is the need for damage-control procedures that take into account the power and speed of new media (note 3). The entire episode could have--prior to Twitter and the blogosphere--been known to just a few hundred customers of a very small company, but instead traveled from a lone tweet to a large splash across the homepage of a major publication, all within a 6-hour period.     

TechCrunch featured the Rudder post on its main page most of the afternoon (19 May 2009)

Special damage control blog created by Rudder yesterday
(19 May 2009; link)

Note:
1. Ranking by Technorati authority (here)
2. Thanks to Mike Linskey for the tip yesterday morning.
3. Also, account aggregation users should use an email address that is not directly associated with their name.

Yesterday, Intuit launched its first native app for the iPhone, Quicken Online Mobile. It's already risen to number four in the Finance category (note 1), and will likely hit number one given the number of Intuit fans using the iPhone. Currently, E*Trade's new Mobile Pro claims the top spot.

Intuit has incorporated some interesting features including this user-friendly "what's left until payday" feature. Users can access a graphical map of their future balance level (below) and get a warning (right) if the account looks like it will run out before the next payday.

Intuit also uses the GPS/location-based capabilities of the iPhone with a built-in ATM finder (click on inset for larger view). And finally, users are able to input transactions on the fly to get a real-time look at the impact to their budgets on the latest expenses.

The two-minute YouTube video (link) is worth watching to see how to position your iPhone PFM as a mobile financial assistant (speaker is Intuit product manager, Barron Ernst):

There are a number of personal finance apps available on the iPhone platform including Mint, Wesabe (announced Tuesday at FinovateStartup), MoneyTrackin, iBearSoft Software, and dozens more. 

Notes:
1. Quicken's mobile app is number four in the free apps section of the iTunes Finance apps section as of 8:30 AM Pacific time, 2 May 2009. It has 73 user reviews with an average 4-star rating (excellent). In comparison, Mint which launched its iPhone app in December has nearly 13,000 reviews.
2. According to VentureBeat, Quicken Online passed the 1-million user mark in mid-April.

Apple must be one of the more lucrative advertisers these days at the Wall Street Journal. Apple has bought the back page more times than I can count to show off the iPhone and more-importantly, the diversity of applications available (see inset, note 1).

Lately, Apple has run "theme" ads showing applications related to a single category. Last week (Thurs, 9 April), the back of the A section showed personal finance apps (see left column below). Yesterday, the apps all supported small business and ran on the back of Marketplace (B) section (see right column below).

The only app to make both lists: personal finance superstar, Mint, which even scored top billing in the personal finance page, occupying the upper-left corner, where it's blurb would likely score the highest readership. 

The Apple website also has themed app guides. The managing money page (see screenshot below) features again features Mint, which gets the biggest graphic, Bank of America, who's app was featured in dozens of Apple ads in 2008 and earlier this year, Bloomberg, Gas Cubby, iXpenseIt, Save Benjis, and Home Finder.

Bottom line: Financial institutions should think about how to add similar money management functionality to their mobile and online offers. As Aite's Ron Shevlin pointed out in a comment here last week (emphasis added):

.....(the FinovateStartup participants) you talk about are helping people manage their financial lives, while the banks are [still] focused on helping people manage their financial accounts.

Big difference.

Table: iPhone apps listed in recent WSJ ads (clockwise from upper left)

Apple's Money Management page on its Website (link, 16 Apr 2009)

Notes:
1. My apologies for the image quality, taken via iPhone naturally.
2. For more info, see our latest Online Banking Report: Mobile Banking via iPhone.

Launched in Oct. 2007, Xpenser (see note 1) is a financial tool designed for tracking items for business expense reports. Monthly traffic is about 6,000 unique visitors according to Compete.

To understand Xpenser, visualize how Mint works, then think of the opposite.

• Mint is full automated; Xpenser is all one-off data entry.
• Mint has graphics that will blow you away; Xpenser has lists.
• Mint requires you to divulge your banking usernames and passwords; Xpenser just needs your email address.
• With Mint, you can track your bank accounts, investment accounts and net worth; Xpenser only helps you submit your next expense report.

Xpenser's mission from its website:

We were fed up with how painful expense reports and tracking were. After many experiments we found a workable solution: record expenses as soon as they happen and forget about them.

How it works
After a registration process that requires no more than your email address, you can begin immediately submitting expenses to the service via:

• Email by sending a message to e@xpenser.com with the free-form expense listed in the subject line
• iPhone optimized site (see inset); it's not in the App Store, but you can add an Xpenser button to your iPhone by navigating to the Xpenser website and pressing the + button
• SMS by sending a text message to 66937 (MOZES), using "exp" followed by the free-form expense description
• Voice via Jott or Dial2Do (both free services)
• Twitter via direct message from your registered Twitter account
• IM via Yahoo Messenger, AOL Messenger, MSN Messenger, or Google Talk
• Browser search box in Firefox or IE 7+ (see below)
• Secure website via standard input form

Once the expenses are collected, users go online and move each expense to the appropriate report. Transaction amounts and descriptions can be edited.

The company is building open APIs, so developers, including banks, can use the service to kick-start their own personal finance tools. The company says it will build premium fee-based versions with long-term archives along with other features.

Xpenser competes directly with Expensify (see note 2), a company that will be demo'ing at our upcoming FinovateStartup conference.

Data entry via the browser search box
Although, it's not a core piece of the program, I was perplexed when I saw that one of the methods of entering expense data into your Xpenser account was through the "search box." That was probably what convinced me to sign up for the account.

Here's how it works in Firefox (also works in IE 7+ and any browser that supports OpenSearch):

• Navigate to the Xpenser website
• Click on the drop-down area next to the browser search box
• Add Xpenser as a "search engine"
• Then simply type the expense amount and description in the search box making sure that Xpenser is the selected as search engine (see second screenshot below), and press enter; Xpenser recognizes your account through cookies and adds the "search term" to your data file

That feature is so clever, it's almost creepy. I'm not sure a bank would want to use this feature since it could capture any search term the user inadvertently input while the bank's "search engine" was selected in the browser search box. 

Xpenser main account page (30 March 2009)

Input via the browser search box (30 March 2009)

Notes:
1. Not to be confused with FinovateStartup alum, Expensr, now part of Strands.

2. Expensify has abandoned the decoupled debit business model it was using when we wrote about it's launch last fall (previous post).  It now offers the choice of a prepaid MasterCard or an American Express-issued card.

3. For more information, see our Online Banking Report on Personal Finance Features for Online Banking and our Online Banking Report on Social Personal Finance. 

Today, Wesabe (company blog post) joined Geezeo (press release) in officially pursuing a strategy of white-labeling its personal finance services for banks and credit unions (note 1). Wesabe CEO Marc Hedlund told me they have three deals in various stages of the contract process, but none have signed on the dotted line yet.

You can get an idea of how this will play out by visiting Wesabe's first co-branded site at the UK's Daily Telegraph (see screenshot below). However, in the banking rollout, the service can truly be white labeled with no mention of the Wesabe name. Wesabe provided a mockup of its white-label product for the fictitious Springboard Bank (see second screenshot below).

As much as I love online PFM sites, the future for most financial management activity is within the confines of online banking sites (note 2). Why? Most people do NOT enjoy tagging purchases, tracking their budget, monitoring their net worth in real-time, or debating the latte factor.

Banking, like most chores, needs to be accomplished as efficiently as possible. And the easiest way to track financial activity is at the place the customer already knows, trusts, and uses, their online banking site (note 3). 

That doesn't mean there isn't a place for Mint, Quicken and other PFM sites. Millions of consumers and small businesses pay close attention to every transaction. And they'll invest time, and money, into standalone sites that offer state-of-the art tools and independent perspectives.    

But by partnering with full-featured PFMs like Wesabe, banks and credit unions give customers little reason to look elsewhere. Wesabe is particularly well-suited for the role of financial institution service provider (note 4):

• Technology: It owns the aggregation engine, so they have more flexibility in pricing and contract negotiations
• API: Wesabe has featured a public API since 2007, so it's easier for bank developers to hook into its rich dataset
• Features: Has state-of-the-art user interface including a Twitter interface, widgets for Mac and Windows Vista, an iPhone-optimized site, and soon an iPhone app
• Brand: It has taken the high road....positioning the Wesabe brand as an unbiased financial guide; in fact, they've never taken advertising or commissions from financial providers
• Experience: Launching in 2006, they have been around longer than most other players, giving them credibility and a better longitudinal database
• Traffic: Of independent PFM sites (see Jan. traffic here), Wesabe trails only Mint and Geezeo in monthly traffic (120,000 unique visitors in Feb according to Compete), so it brings an established community and financial database to their financial institution clients

Make vs. buy
For a financial institution, the advantage of working with Wesabe vs. building PFM capabilities in-house include:

• Speed to market: Outsourcing allows FIs to get the PFM features in to the market much faster; depending on level of integration, could launch in a few months
• Integration: Although young, Wesabe is an experienced aggregator and technology company; this expertise can be tapped to provide integrate bill payment and funds transfer capabilities
• Existing community: FIs can leverage the vibrant Wesabe community to instantly provide interesting content and community
• Cost savings: Gives the financial institution state-of-the-art features much faster, and usually at a lower cost, than building them in-house

Wesabe's co-branded site at UK's Daily Telegraph (link) (18 March 2009)

Wesabe mock-up of white-labeled PFM interface (18 March 2009)

Notes:
1. Wesabe's new service is called Springboard and Geezeo's is Spectrum.
2. Assuming banks and credit unions offer a reasonable set of personal finance management tools.
3. For more info, see our Online Banking Report on Personal Finance Features for Online Banking and Online Banking Report on Social Personal Finance.
4. Geezeo also boasts similar benefits; while it's a year younger and doesn't own the aggregation engine, its provider, CashEdge is already used and trusted by many large financial institutions, and Geezeo boasts higher traffic than Wesabe. 
5. Come talk to Wesabe's execs at our FinovateStartup 2009 conference, April 28 in San Francisco.

I love personal financial management websites. Not so much for the reality, actually I hate tracking expenses, but for the promise. The illusion of having everything under control, never overdrafting, never missing a payment, and with perfectly-shaded multi-color pie charts just a click away (inset from Mint). 

But I've always thought that once banks and credit unions added basic PFM functions to their online banking services (see note 1), it's game-over for most independent PFM sites. They would have to either license their platform to financial institutions, sell out, or close their doors.

Now I'm not so sure.

Mint did something recently that made me reconsider. It was really pretty simple when you think about it. Yet as far as I know, no bank, card issuer, or even credit union has ever taken this on. 

The Mountain View, CA-based startup scanned their members' credit card statements to identify bogus charges from a known scam. And the company plans to make the resulting fraud alert service a standard part of its offering.  

From American Banker (23 Jan 2009):

Mint Software Inc. is planning to roll out a tool that will automatically scan its 800,000 users' accounts for potentially bogus charges....Aaron Patzer, Mint's founder and chief executive, said the idea for the new product came after his company heard of a scam involving Adele Services of Melville, N.Y., a bogus merchant that was making 25-cent charges to millions of consumer accounts. The news was widely reported, and Mint decided to check its users' accounts its to see if any had been affected; it found 800 that were.

Score 1 for the upstarts.

Bottom line: If the online PFM purveyors harness technology to take better care of banking customers than the banks themselves, especially with practical, money-saving ways such as Wesabe's Cutback Tool (below), the newcomers have a bright future indeed.

Note: For more info, see our Online Banking Report on Personal Finance Features for Online Banking.

We've regularly cited third-party estimates of website traffic to Mint and other PFMs. More often that not, we'll get a comment or email taking us to task for using such inexact and/or irrelevant data. But we believe that website traffic, even a rough approximation, is a leading indicator of success. 

Luckily, we now have better metrics for the two online leaders. In response to what appears to be a truth-in-advertising query from Intuit's general counsel (see note 1), Mint disclosed its registered-user count (note 2), which has been growing at an average of 17% per month in Q4 2008 and so far in this year. 

As of yesterday, Mint had 934,000 users, double third quarter's end-count. That's 3,400 new registered users per day (seven days a week), almost 25,000 per week. The company should pass one million before St. Patrick's day.

While this growth in registered users is impressive, what's truly astonishing is that 70% of the registered users, 680,000 so far, have entered at least one bank or credit card username/password in order to automatically download transactions into Mint.

In response to Mint's disclosure, Quicken Online reported its 650,000 registered users, currently growing at a 45,000-per-week clip. If that continues, they'll pass one million before the April tax deadline.

It looks like there's quite a battle shaping up between the two leading online personal finance specialists. And don't overlook the banks. Both Bank of America (2.5 mil as of April 2008) and Wells Fargo (1 mil as of Nov 2008) have more online personal finance users at this point.

What it means: Account aggregation, left for dead a few years ago, is making a fearsome comeback. The three biggest players, Bank of America, Mint, and Quicken Online, now have more than 4 million registered users, approximately 4% of all U.S. banking households (note 3).

Table: Mint Registered Users by Month

Source: Mint, Feb. 2009
*Registered users are anyone who has signed up with email address
** Through Jan 25 (per Mint letter, 28 Jan)
***Through Feb 19 (per TechCrunch post, 19 Feb)

Notes:
1. Intuit's letter to Mint here.
2. Mint's response here.
3. Yodlee provides the aggregation engine for both Bank of America and Mint.
4. For more info, see our Online Banking Report on Account Aggregation and Online Banking Report on Personal Finance Features

January is always a great month for personal finance. Consumers working off holiday spending binges and/or attempting to live up to New Years resolutions naturally find their way to personal financial management sites. It's especially pronounced this year as consumers try to better understand their spending and manage for the downturn.

So it's not surprising to see that traffic grew by 300,000 unique visitors in January (+20%) compared to December. Total traffic was up 4.5-fold at sites open for a year or more (see Table 1). Including the class of 2008, total traffic was 2.0 million, a five-fold increase from a year ago.

Highlights:

• Mint had another great month, increasing site visitors by about 200,000, a five-fold increase in the past year. Mint's gain in January was more than that total traffic of all nine 2008 newcomers combined. Mint had a 60% market share of the total of 1.8 million visitors in the category, about the same as December. 
• Geezeo continued its wicked pace, growing 30% during the month, and posting a 12-fold increase over a year ago.
• Quicken Online, which launched in January 2008, more than doubled visitors to 150,000 compared to December. However, traffic at Quicken is hard to compare to other sites due to the massive traffic at its parent site: for example, <quicken.intuit.com> received 1.2 million visitors and <intuit.com> website had more than 10 million. 
• Wesabe was the only site, of those open for a year or more, that turned in a traffic decline, falling more than 30% in the month. However, keep in mind the Compete estimates are derived from an online panel and are not always accurate, especially for sites in the low six-figures or less. The company said that it had record page views in January. That includes both U.S. traffic, measured by Compete, and international visitors.
• BudgetTracker also turned in amazing results, nearly doubling its traffic to an estimated 27,000 visitors.
• Of the 2008 startups (see Table 2), Thrive was the only one showing strong growth, increasing 50% over the previous month. On Friday the company was acquired by Lending Tree for an undisclosed amount.

Table 1: Traffic at online PFMs launched more than one year ago

Table 2: Traffic at the online PFM class of 2008

Source: Compete, 7 Feb. 2009; estimates of monthly unique visitors from the United States

*The percent changes were calculated from the underlying data set and due to rounding of the monthly traffic figures; the percentages may look slightly off

Note: For more information on the market, see our Online Banking Report on Personal Finance Features and Online Banking Report on Social Personal Finance.

As I was publishing my earlier post on the Thanksgiving message on the Zions Bank homepage, I noticed a small Holiday Gift Planner banner in the lower left corner (see inset below). Expecting to find a pitch for Visa or MasterCard gift cards, I clicked on it and was surprised to find a very cool holiday microsite called at MyHolidayGiftPlanners.com (see screenshot 1 below and note 1).

The gift planner is a personal financial management tool for planning, budgeting, and tracking holiday gift expenditures. Users create a gift list for each person by entering a budget amount per person, an estimated cost for each planned gift, and then later the actual amount spent.

The tool does all the math, tracking progress against each recipients' gift list and how the total holiday budget is faring (see screenshot 2). It even includes a space for capturing gift-buying notes (see below). This year's list will be archived to provide a handy reference for next year. Hopefully, the bank will use email to draw users back next year.

Consumers could do the same thing on a spreadsheet or within most personal finance programs. However, Zions has built an elegant solution that is faster and more convenient. I've always done this for my kids on a piece of paper which I inevitably lose and/or leave out on the table where anyone can read it. I look forward to keeping this list bookmarked and password-protected on my computer this year. 

Anyone can use the program, you needn't be a Zions customers. It takes seconds to sign up inputting name, email address and password (see screenshot 3). The site gently cross sells credit cards to pay for itself. There's a banner that runs across the top of the planning page (screenshot 2) and a link to special cardholder discounts on the main page (screenshot 4).

Zions should turn the planner into an iPhone/Android app to help users track gift purchases on the go and avoid the need to print the list prior to the trip to the mall.

Bottom line: The Zions gift planner is a great example of how to creatively use branded financial management tools to both help customers and create synergy with banking products. We're giving Zions our sixth OBR Best of the Web 2008 award for creating a simple solution to help customers avoid holiday overspending, a pesky personal finance issue that is top-of-mind this year. 

1. Homepage of Zions Bank's gift planner (28 Nov 2008)

2. A credit card cross sell runs across the top of my personalized gift planner

3. Email address is captured for future marketing purposes

4. Credit card discounts are displayed along with an credit card application

Note:

1. Evidently the planner was available in early December last year. The first blog mention was 7 Dec 2007.

In April, we reported on the robust adoption of Bank of America's online personal finance manager, My Portfolio (see note 1), used by 10% of the bank's 25 million online bankers. The results are especially impressive given that it's a full-featured module accessible via online banking, but not particularly well integrated.

In comparison, Wells Fargo offers a completely integrated PFM tool, My Spending Report, that's extremely simple to use, but offers limited functionality. On Oct. 29, the bank made an important improvement, adding a basic budgeting tool, Budget Watch, to what had been essentially a list of transactions divided by category.

The bank told me last week they have 1 million monthly users, making it the second online PFM provider to break the 1-million mark (after BofA). Wells has about 15% of its online banking base (note 2) using the tool, a slightly higher penetration than BofA. Again, not surprising considering how well it is integrated. The budget tools should boost penetration.

Who'll be the next one to join the 1-million club? Mint, with about 500,000 users in its first 15 months in business, is headed that way, possibly as early as late next year.  Chase/WaMu could get there in a few weeks, if they added online personal finance to their feature set. Quicken Online, now that it's free, should get there relatively quickly as well.

Note:
1. BofA's My Portfolio is powered by Yodlee.

2. Excluding Wachovia accounts.

As I was drilling into the latest Compete traffic numbers for the annual Online Banking Report planning issue, I noticed a significant uptick in traffic to online personal finance specialists, almost across the board.

Sept. traffic revealed a total of 1.2 million unique visitors (note 1) compared to less than 400,000 a year ago. Not surprisingly, consumers appear to be taking a closer look at their finances. 

The big three newcomers last year: Mint, Wesabe, and Geezeo saw combined traffic increase by 450,000 users, a nearly three-fold increase from 2007. Geezeo was the star percentage-wise, growing more than six-fold. But Mint accounted for three-fourths of the net gain across the existing players with 330,000 more visitors (see Table 1 below):

Also, two newcomers made a big splash last month:

• PNC Virtual Wallet launched in July (coverage here) by PNC Bank, which trailed only Mint last month with nearly 140,000 unique visitors (see 2 below).
• Rudder (a relaunch of Spendview) drew 50,000 visitors last month after its launch at DEMOfall in early Sept.

Granted, the PNC Virtual Wallet benefits enormously from the 2 million monthly visitors to parent PNC.com and PNCBank.com. Yet, it's still an impressive total and is encouraging for banks and credit unions considering similar efforts.

Table 1: Online PFMs launched more than 1 year ago

Table 2: The online PFM class of 2008

 Notes:

1. Sum of the monthly unique visitors from all PFM companies, visitors that went to more than one PFM provider are not eliminated from the total, so there is double counting in the totals. Data source is Compete, pulled 21 Oct 2008.

2. Rudder was previously Spendview, but we consider them to be essentially a new company.

Drum roll, please. Our final presenter today is Peter Pham, CEO of BillShrink.

Menlo Park, CA-based BillShrink launched its new service in July.

The service is designed to help consumers find the best deal in various categories. Today they showed the credit card selector. The service provides detailed breakdowns of fees and rewards to allow consumers to compare across more than 200 cards in the market.

Launching today is MyAccounts which allows users to track their accounts more easily.

BillShrink also tracks wireless carriers and allows users to find the best mobile phone deals.  

BillShrink announced an $8 million dollar funding today.

The second-to-last presenter today is Thrive from Loudwater Labs. CEO Avi Karnani will be conducting the demo.

New York City-based Thrive is the latest entry in the online personal finance market.

What's New
Thrive is making its official debut today at Finovate. They use a red light/green light system so it's easy to see what needs attention quickly.

Thrive calculates a financial health score from the user's data. Then Thrive shows users specifically how they can improve their score. The recommendations show financial institution products that can be used to achieve cost savings (i.e., product placements such as Mint).

On average they are recommending $1500 worth of savings for users.

Thrive has a wizard to help you see how much house you can afford.

Thrive today is announcing a partnership with Credit.com to allow users to track their credit score over time and improve it.

Mint CEO & Founder Aaron Patzer will be presenting next. 

Online personal finance provider Mint launched a year ago and won a Best of Show award at our first Finovate conference in 2007.

What's new
Mint moves out of beta today, with 500,000 users. Their sign-up rate has more than doubled in the past 3 weeks.

Today they launched new investment tracking functionality that allows Mint users to track their accounts at more than 1000 investment companies, mutual funds, and retirement services.

A unique aspect of its investment tracking is the ability to see the value of the account vs. the cost basis.

Mint has an IRA Rollover Advisor where they are partnering with Fidelity, Scottrade, E*Trade, and Schwab.

Results: 10% of users have changed investment behavior and 50% of users have changed their spending behavior by using Mint.

I'm certain most major PFM providers will have an iPhone app within the next six to 12 months. It's a valuable product extension from a functionality standpoint (see note 1). Even more important are the marketing benefits from blogger/press coverage and the App Store listing itself. 

Mint posted a blog entry last week reviewing ten iPhone finance apps. The post drew two dozen comments, most asking when a Mint app would be released for the iPhone. Mint Product VP Aaron Forth replied, "We are busy working on one now."

Most of the better-funded PFM companies are likely working on an iPhone app, but the approval process at Apple can easily take a month or more (one developer's story is chronicled here). So we expect to see them trickle out over the coming months.

The first established online PFM to make it into the iPhone App Store is Moneytrakin', the Barcelona, Spain-based multi-language, multi-currency PFM (note 2). We covered its launch more than two years ago (here).

The company recently announced it had surpassed 5 million transactions tracked. Assuming 250 per customer, that's 20,000 active users. According to Compete, U.S. website traffic averages 1,000 to 2,000 per month. But many (most?) of Moneytrackin's customers are outside the United States.

The Moneytrackin' program, released on Sept. 19, is currently the seventh most popular app in the Finance category.

Notes:
1. For more information, see our Online Banking Report on Personal Finance Features.

2. There are at least a dozen check registers and mini PFMs in the App Store, but none are from established online PFM providers. The only exception is iBuxfer, which claims to work with Buxfer using its API, but was not developed by the company. And in fact, according to the comments in the App Store, may be violating Buxfer's terms of service. All the more reason to get your own app into the store before someone else does.

What a month for financial tech startups! Partly due to DEMOfall, TechCrunch50 and our Finovate, there's been at least 10 online financial service launches or unveilings this month in North America alone (note 1).

That could be the sign of a bubble about to burst, or it could just be a bunch of smart people meeting very real market needs. Only time will tell. 

Lucky number 10 is Pennyminder, an online personal finance startup based in Vancouver, BC. I met founder Vince Hodges at BarCampBankBC last Saturday (coverage here). Although Pennyminder joins a crowded field, the seventh personal finance manager (list below) to launch this month, it's the first ever based out of Canada. That alone should help it gain some traction.

Vince proffered a beta invite, so I've had a chance to look at it. It's a nice, clean design that allows user entries/statement import and supports an expense sharing/social angle. I don't know if that's enough to compete with the dozens of U.S. and international personal finance sites, many with VCs funding a wider range of features, but it's a good start.

Pennyminder will have to figure out a way to break through the clutter, such as partnering with credit unions and/or banks.

Here are six more newcomers this month:

• Thrive unveiled here yesterday and launching at Finovate NYC on Oct. 14
• Rate Surfer unveiled at the TechCrunch50 DemoPit on Sept. 9 and launching at Finovate NYC, Oct. 14 (our coverage here)
• iThryv from Shryk unveiled on stage at TechCrunch50 on Sept. 8 and covered here that day
• Expensify unveiled at the TechCrunch50 DemoPit on Sept. 8 (our coverage here)
• Rudder unveiled here Aug. 23 and launched at DEMOfall on Sept. 8
• GreenSherpa unveiled here July 18 and launched at DEMOfall on Sept. 8

Note:
1. Includes the seven mentioned here plus three more I've yet to blog about.

With three weeks remaining before Finovate NYC, the final company in the demo lineup is stepping out of stealth mode and announcing its participation in our second annual new-products conference. See the full list here.

Thrive will be launching its entry in the online personal finance marketplace, JustThrive.com, at Finovate on Oct. 14. The company hopes to differentiate itself with more advanced financial planning tools while still remaining free. Founder and CEO is Avi Karnani; Marc Matsumoto is CMO.  

Currently, the service is in closed beta testing, but Thrive recently updated its homepage with a timely message playing off last week's financial debacle (screenshot below). 

We had a chance to meet with the NYC-based founders earlier this year and were impressed how they'd studied the current players and were aiming to leapfrog the competition. However, there's been significant innovation in the space this year, and they enter a crowded field (more on that tomorrow).

At this point, I can't say anything more specific about Thrive's plans, but after it becomes publicly available we'll be back with a full analysis. 

Like Rate Surfer, which we wrote about yesterday, Expensify launched its new employee expense-management system from the TechCrunch50 DemoPit this week.

The San Francisco-based startup (note 1) combines a payment card with a Web-based expense manager and uses cellphone cameras to upload pictures of receipts to match against purchases. It's a banking triple play: card, online, and mobile.

The target market is smaller businesses that want to automate expense report preparation, approval, and reimbursement to their employees.  

How it works
The heart of Expensify is a prepaid, decoupled credit card. I know that doesn't make sense, but here's how it works: 

1. Sign up for an Expensify MasterCard prepaid debit card.
2. Load it with value from any credit or debit card, Visa, MasterCard, or American Express. 
3. Make purchases with the Expensify MasterCard.
4. As each purchase clears, the prepaid balance is lowered, triggering an automatic "top off" charge of an equal amount to the consumer's credit card, thereby returning the prepaid balance back to the original level.

Metabank is the issuer; here are terms and conditions.

Analysis
At first blush Expensify sounds pretty amazing. An expense management card that rides on top of your regular card, with mobile and Web-based integration. Brilliant, until you start thinking about costs. There's that pesky thing called interchange. What Expensify has done is create two card transactions instead of one, doubling the amount of interchange paid.

To cover the extra interchange and create some revenue for itself, Expensify levies a 3% transaction fee on the cardholder. Although the card is otherwise relatively fee-free, that's a significant surcharge.

Why would anyone pay 3% extra in order to use the Expensify card when they already have a credit card? The company believes that small businesses will pay the fee in order to get the expense-manager features and to help employees separate business expenses from personal ones. Businesses could have multiple Expensify cards tied to different categories of expenses (see screenshot below).

A business with just $1000/mo in expenditures would pay $360 per year. In addition, the business would tie up several hundred dollars in a prepaid account, because the only charges cardholders can make must not exceed the prepaid balance held in the Expensify account. 

I think the expense-management concept is good, especially with the mobile receipt integration, but it's just too expensive in its current format. The founders should try to move to an ACH-based "topping off" process and remove the transaction fees. 

But regardless of how this specific product performs, the integration of payments, online and mobile, is a huge trend. If Expensify is nimble enough, they may be able to ride the wave.

Expensify homepage (10 Sep 2008)

Note:
1. Since I didn't see contact info on their website, here's what the founders provided at TechCrunch50: Expensify, 548 Market St. #61434, San Francisco, CA 94104, Phone: 801.745.9064

Two huge tech conferences opened today in California with 124 companies launching new products this week in front of a combined audience of more than 2,500 (see note 1). At DEMOfall in San Diego, 72 companies are launching new products today and tomorrow. In San Francisco, 52 companies launch at TechCrunch50 today through Wednesday.

Eight of the 124 companies are related to financial services:

• DEMOfall: Rudder, GreenSherpa, BizEquity (Advanta)
• Techcrunch50: iThryv (below), StockMood, PersonalRIA, exchangeP, and Emerginvest

We'll cover several of these companies, plus several in the TechCrunch50 DemoPit, starting with iThryv.

iThryv kicks of TechCrunch50
I made it down from Seattle this morning just in time to catch the first demo. I'm glad I got up early because it just so happened to be the only personal finance/banking-related finalist. Oklahoma City-based Shryk kicked off TechCrunch50 (note 2) by unveiling its online banking platform aimed at the 12- to 20-year-old crowd. The new service is called iThryv and it will be marketed directly to banks and credit unions who will customize and brand it for their own customer base.

iThryv will be integrated directly to the bank, or its core processor, so that real-time banking data can be displayed in various widgets. In addition to account info, iThryv also includes the following modules and features:

• Goal-oriented savings, including rewards for reaching milestones
• A spending & savings score that does for savings what a credit score does for loans
• Make $ area where budding entrepreneurs can learn more about starting a business
• Learn area for financial education

The company has a two-fold approach to getting iThryv into the market:

• Licensing the platform to banks for a fixed fee plus per-user fees
• Giving the platform to schools to incorporate into their curriculum

According to the founders, the service is currently being considered by several financial institutions, but it is not yet available online.

iThryv homepage (8 Sep 2008)

 iThryv savings score graphed (8 Sep 2008)

iThryv "Make $" tab (8 Sep 2008)

Notes:
1. TechCrunch reported approximately 1,700 attendees; DEMOfall, 800.

2. iThryv was originally scheduled to present third, but were moved up to first when Ashton Kutcher was late for his scheduled demo of his startup, Blah Girls.

Intuit joined the messaging race with the beta release of Quicken Beam. The free service sends users text-messaged balance-and-activity alerts from most U.S. bank, credit card, and credit union accounts. Users may also query the service for balance plus last five transactions by texting "Bal" to the short code 636363.

Currently, the service runs independently of Quicken and can be used by anyone free of charge. According to the official press release, the service was developed in Intuit Labs.

What's innovative
It's not a new feature. Quicken Online (see second screenshot below), along with most major banks and personal finance specialists (Mint, Rudder, Wesabe), already supports text-message alerts (see note 1). But this is a relatively low-cost way to hook users early on with an extremely simple service, then migrate them to more robust Intuit services later on (Quicken, QuickBooks, TurboTax).

And the Quicken stamp of approval means a lot when turning over your log-in credentials to a third party. If you want to talk to the company about Quicken Beam, Intuit will be demo'ing the latest features of Quicken Online at our Finovate Conference in October. 

Financial institutions that lack text-message support might consider linking customers to Quicken Beam. Yes, you are turning customers over to another financial provider, and yes, your compliance folks will hate it. But customers are going to do it whether you want them to or not. You might as well get credit for making a solid recommendation. And realistically, using Quicken Beam is unlikely to hasten anyone's exit from your bank or credit union.

Qucken Beam homepage (25 Aug 2008) 

 Text messaging in Quicken Online (25 Aug 2008)

Notes:
1. Geezeo really differentiated itself with mobile capabilities in its May 2007 launch. 

2. For more information, see our Online Banking Report on Personal Finance Features.

There's a new challenger in the online PFM space, aptly named start-up Rudder which is headquartered in Houston, TX (see note 1). The company was founded in 2007 and launched last year under the name SpendView (note 2).   The company raised $2 million in January from Meakem Becker Venture Capital. The founder is Nikhil Roy. 

What's innovative
While it's a bit busy for my tastes, Rudder's homepage is aesthetically pleasing, and more importantly, lays out a number of remarkable benefits that every financial institution should be able to deliver on:

• Finances in your inbox: emphasizes that it's pushing info to you, not relying on your obsessive monitoring of a website
• Paying bills on time: They don't just help you pay the bills; Rudder makes sure you pay them ON TIME, a huge difference in terms of consumer benefits
• Think forward: Everyone has a sense of what they really have in the bank after upcoming expenses are met, but Rudder actually does the math for you and shows you what's truly "free cash" in your account after accounting for upcoming payments
• Every morning: Rudder provides a personal-finance heads-up each morning so you can go about your day without thinking about your finances
• Safe & secure: Self-explanatory, but cannot be overlooked

Clearly, Rudder has been studying how Mint grabbed an early following with great design, advanced functionality, and a brash point of view. However, it won't be able repeat Mint's PR coup last year of winning at TechCrunch40 and our Finovate 2007 (see note 4). Rudder has scheduled its public debut at competing techfest, Demo Fall, running Sept. 7-9 and unfortunately were not on our radar screen until after the Finovate 2008 lineup was set (note 5).

What it means
You gotta love Web-based startups. It took a decade for Wells Fargo to move from delivering plain old statement info on its website to offering rudimentary personal finance functionality in My Spending Report.

But less than two years after Wesabe (note 2) kicked off the Personal Finance 2.0 era, we have dozens of cool personal finance companies looking to make a name for themselves. Mint (note 2) is the most hyped (see coverage), but there are also great things going on at Geezeo, Jwaala (note 3), Buxfer, ClearCheckbook, Mvelopes, and, of course, Quicken Online, which has Coke-like brand awareness.

And don't rule out the incumbent financial institutions. PNC Bank (post here) and Frost Bank (post here) have both introduced novel accounts that incorporate advanced personal finance functions. And Bank of America has offered full-service PFM functions since late 2006 with Yodlee-powered MyPortfolio.   

Rudder homepage with five key benefits highlighted (21 Aug 2008)

Your "real" balance widget
I love the focus on what you really have in your account, after netting out all the known bills in the coming month. Here's the graphical feedback Rudder provides.

Notes:
1. Rudder seems like a good name for a financial management app. What do you think Jeffry?

2. The previous version, SpendView, is still live at <spendview.org>, but the original spendview.com now redirects to rudder.com.

3. See Wesabe and Mint demo their latest features at the upcoming Finovate 2008. Mint won Best of Show at Finovate 2007.

4. Jwaala was Best of Show winner at Finovate Startup, April 2008.

5. Attention startups: It's never too early to make an introduction and get on our Finovate watch list. We're already putting notes together for 2009. Contact Online Banking Report/Netbanker editor Jim Bruene. 

6. For more info on the space, see our Online Banking Report on Personal Finance

According to TechCrunch, the $0.99 tip calculator app from TapTapTap has been downloaded 3,200 times in the month it's been available. Net income to the developer, after Apple takes its 30% cut, is $2,200.

TapTapTap also markets a much more sophisticated location-based search tool that has generated $50,000 in revenues for the developer.

Tipulator is ranked number 20 in our Aug. 5 rundown of the top-20 banking and finance apps. Today it ranked number 27.

Apple ranks the most popular apps within each category, but does not provide download totals. Tipulator numbers were provided by developer.

What it means
1. iPhone users, so far, are willing to pay for apps. Who would have thought that more than 3,000 people would go to the trouble to download an app to help them multiply their bill times 15% to 20%? And there are two tip calculators that ranked higher in the App Store.

2. There is real demand for mobile financial tools, even very simple ones. Financial institutions should consider launching a branded calculator app in the Apple App Store.

Wesabe's latest feature, the ability to update your account via Twitter, isn't likely to find too many users in the short-term. However, it's a great marketing move that could see a fair amount of uptake over time (see note 1).

Although there are less than 2 million Twitter users, the company is currently white hot, one of the most talked about Internet companies (see Google trends below, which shows Twitter search volume is 7x or 8x that of "phishing"). So why not draft off Twitter's hype, as long as it's not too costly?

How it works
After logging in to Wesabe and providing your Twitter name, you then simply send a private or public message (aka Tweets) to Wesabe's Twitter account. Wesabe then adds the expense to your cash-tracking account. You can include merchant name, expense categories, and descriptions to the transaction (see examples below).

Most common: Update via private message (no one else will see)

Less likely: Update via public message (your friends will receive it, and if you have an open feed, anyone could see it)

Google Trends for Twitter vs. phishing (9 Aug 2008)

Note:
1. Updating accounts via text message and email has much wider appeal. It's one of the recommended items in our personal finance feature set. See our Online Banking Report on Personal Finance Features for more info.

According to Compete, website traffic to personal-finance startup Mint increased to 460,000 in July compared to 400,000 the month before, for a 13% increase. Site traffic has quadrupled since December, gaining 350,000 unique monthly visitors.

After a solid decade ignoring the financial management features of online banking (see note 1), we now have two banks doing very interesting things melding transaction accounts with personal financial management.

Frost Bank is the latest visionary, launching its Momentum Account this week (press release). The account melds high-yield checking, goal-oriented savings, and financial management into one online offering. Unlike PNC Bank's VirtualWallet, which is clearly aimed at the youth market (see previous coverage), Momentum goes directly to the online sweet spot, 30- and 40-somethings trying to manage their money in a more systematic way.

The account
Basically, it's a fee-free, interest-bearing checking account with the usual freebies: debit card, online banking, bill pay. After the first three months, balances of $15,000+ earn 3% and those under $15,000 earn basically zero. However, the bank has added an interesting twist they call "DIY APY (see screenshot below). For every 10 monthly debit card transactions, they add 5 basis points to the interest rate, up to a maximum gain of 0.25% (for 50 debit card transactions).

That's a piddling amount, earning about a buck a month (pre-tax) for someone with $25,000 in the account typically doing 10 to 19 debit card transactions monthly. Yet most consumers like the feeling of winning the rewards game, so it should be good for marketing and retention.

Like PNC's VirtualWallet, online account opening is powered by Andera.

The innovations
Besides the DIY APY gimmick, the new account is noteworthy because it incorporates goal-oriented savings and transaction tracking into the interface. Users can allocate funds to one or more savings goals and set up automated transfers to the savings sub-accounts.

The interface also includes budget-categorization features using the folders metaphor. And the usual charting and graphing functions are available. Unfortunately, there is no online demo, so I could see only the features in the bank's demo video. 

Is it trendworthy?
I'm not ready to say that two examples make a trend, but given all the interest by investors and the press in online personal finance, I think this is the beginning of an interesting period in online finance product development.

Frost Bank homepage announces "DIY APY" (30 July 2008)

Note:
1. See Online Banking Report: Personal Finance Features for Online Banking for more information on the pros and cons of various personal finance features.

I came across Green Sherpa in a Web search a few weeks ago. The Santa Barbara, CA-based startup is planning a Sept. 8 launch. The homepage (shown below) is not currently functional. All links point to a page where users can sign up for more info to be delivered at a later date. 

The tagline, "A more efficient way to track your personal finances," is intriguing (note 1), but no word on how Green Sherpa will differentiate itself from Mint, Jwaala, Wesabe and the rest. But the name is wonderful.  

Note:
1. This tagline, visible on its placeholder site in early July, has since been replaced with "Sophisticated cash flow management that's simple to use." 

Just when you thought Mint, Wesabe, and Geezeo had a lock on all the headlines for Gen Y personal finance, along comes a truly inspired effort from a major U.S. retail bank. Furthermore, it's not from Wells Fargo, Bank of America, Chase, or even ING Direct.

Pittsburgh, PA-based PNC Bank, the 15th-largest U.S. retail bank with $83 billion in deposits (see note 1), today launched a new online combo account called PNC Virtual Wallet.

The account comes with a checking account, bill payment, and two types of savings accounts. It also features several unique personal financial management features with an emphasis on functions most likely to appeal to a 20-something audience:

• Cash flow: debit card, checking, online bill pay, financial calendar, recent transaction report
• Savings: two types of savings accounts, automated savings options, wish list, and a random video-game-inspired savings tool called "punch the pig" (see below)

Finally, the account is priced well:

• No fees (except $0.50 per written check after the first 3 per month and the usual penalty fees)
• Free overdraft protection among linked accounts
• 3% APY on the growth savings component
• ATM-free rebate (but only if there's a $2000 average monthly balance in the checking account portion)

What's innovative? (note 2)

• Package of three deposit accounts: Spend Account (e.g., checking), Reserve Account (e.g., savings) and Growth Account (e.g., high-yield savings or money market deposit account)
• Ability to move money among the three accounts by moving a slider across the screen, called the Money Bar
• Automated savings function called Savings Engine that allows users to set up time-triggered (e.g., once per week) or event-triggered (e.g., each debit card use) automatic savings transfers
• Savings game called Punch the Pig, a video-game-inspired savings gimmick: Each time the pig appears on screen, users can elect to "punch" it to automatically move money from checking to savings
• Wish List with savings goals and progress reports

What can be improved?
Four areas that are noticeably absent, or at least not mentioned:

• Mobile functionality, especially text banking and alerts
• Online customer support: Customer can apply online through the Andera-powered app; however, there is no link to any online-support options such as chat, IM, text, or even a Web-based input form or old-school email address
• Social aspects: forums, reviews, blogs, or even testimonials (note 4)
• Credit: credit cards, line of credit, auto loans, and so on

The website design is impressive and very un-banklike, yet it lacks some basics:

• No demo: There are several Flash instructional videos that show most of the key features, but there is no all-encompassing demo for users wanting a tryout before buying.
• Lame homepage videos: Granted, I'm not in the Gen Y target market so I could be wrong, but if I think the videos are lame, what do you think a 22-year-old will make of them? I say lose the "man on the street videos" or reshoot them in a less-scripted manner. 
• Extensive FAQs: The FAQs need to be expanded tenfold. Currently, only 16 questions and answers are up, but with so many unique features, that number doesn't come close to answering many basic questions, such as "Are there account alerts?" or "What's the rate of interest on the reserve account" (note 3), or "How long are transactions stored?"

PNC Bank virtual wallet homepage (14 July 2008)

Explanation of "Punch the Pig" savings feature

Notes:
1. Deposits as of 31 Dec 2007; deposits were up 25% compared to $66 billion as of year-end 2006.

2. PNC has applied for a patent on the account and tools.

3. Eventually, I did find a link to interest rates and fees on the "how to apply" page

4. See Online Banking Report on Social Personal Finance for more info

I've been reading the FiLife blog and monitoring its URL since I heard about the intriguing concept last summer. After a couple false starts, the site went live yesterday.

The unique joint effort between News Corp's Dow Jones and IAC is a cross between a personal finance tool like those powered by LeadFusion, a finance forum like FatWallet, a voting site such as Digg, and a full-blown magazine such as Money. It's dripping with Web 2.0 touches from the trendy design to blogging with attitude and harnessing the collective intelligence of the user base.

The core FI Deals area shown below allows users to self-assess their financial situations. In FiLife-speak, it shows how you stack up, in key areas such as income, home value, credit score, debt and even the value of your car. The people pyramid (in the screenshot below) shows an orange stick figure representing where you stand against the rest of the country.

Following a few ideas on how to improve your standing, FiLife presents financial deals in descending order of how valuable the FiLife community deems them. In this case, a mortgage offer from Citibank is listed first due to its top-of-the-line 5-point score. In this case, since it's the first day the site's been live, the score comes from a single review by a FiLife staffer. As the site gains users, this score would reflect the average across all reviewers.

The other key area is the FiDeals (screenshot below). Here users can search the top deals across all categories as voted on by the community. Some deals have been placed in the site via sponsorship dollars. Those are indicated by the gold pyramid. Blue pyramid offers have been added by staff members. In either case, the score shown within the colored pyramid reflects the vote of the community, which includes staff member votes.

First Impressions
The deep-pocketed owners have the resources to build traffic and establish the FiLife brand, if they find it profitable. Assuming it gets significant visitor traction, this could be the place to find financial and banking deals online, at least in the United States.

The business model is clearly ad-supported. There's nothing on the site at this point that would command subscription fees. And so far, the advertising is less intrusive than many other financial portals. And the bright look and good organization, not to mention professional personal finance content, add up to a potential winner.

But FiLife faces the same problem all ad-supported personal finance sites have: how to walk the fine line between the needs of users who want to find the best price vs. that of the advertisers that do not want to compete solely on price. FiLife sponsors may bolt if the community consistently posts poor reviews on their price-value. On the other hand, Google is dong just fine with AdWords, by ensuring that advertising is relevant. It will be interesting to see how FiLife strikes the proper balance.  

And it's no sure thing that FiLife ends up as the winner in the space. FiLife faces competition not only from startups such as SmartHippo, Wesabe, and Mint, but also from entrenched sites such as BankRate and TheStreet.com. And don't count out the incumbent personal finance magazines, including Dow Jones's own SmartMoney. These properties have enormous brand recognition and have already built substantial websites.

It was online banking week in Walt Mossberg's popular Wall Street Journal technology columns. Yesterday in The Mossberg Solution, authored by 20-something Katherine Boehret and edited by Mossberg, Mint's personal finance service received a half-page article so complimentary I had to look twice to make sure it wasn't an advertisement. Boehret couldn't find a single thing wrong with the service, although she did wish for bill payment capability so she could do all her banking with Mint. I'm sure she'll have her wish granted relatively soon.

In today's Personal Technology column entitled, How to Avoid Cons that Can Lead to Identify Theft, Mossberg himself dropped a bomb which will impact bank-marketing efforts for years to come. His first of seven tips for safe computing:

Never, ever click on a link embedded in an email (from your) financial institution....

That's harsh, but it's also understandable why he'd take that stand. Mossberg strives to make technology issues understandable to non-techie readers. However, it would have been better to add, "unless your bank adds account-specific personalization to the messages so you know for sure where they originated." 

Action items
Many financial institutions, including Citibank and Bank of America, have long used personalization to distinguish legitimate messages from phishing attempts. Financial institutions with good personalized messaging should consider a public outreach program to counter the negative perception from the Mossberg column. It also might be a good time to remind front-line employees how to respond to customer concerns about phishing emails.

For more information, see our Online Banking Report on Marketing Security. 

Two months ago we published a table (here) showing active users at the leading online personal finance startups. Below is the table, updated with March traffic and the addition of one more player: Bank of America.

The bank, which offers a full-featured online personal finance management solution called My Portfolio, powered by Yodlee, has 2.5 million active users, according to BofA exec Marina Moore (note 3). That's an impressive 10% of the bank's online user base, and about 6x the total user base of all the online startups combined (note 4). 

For more information:

• Online Banking Report (131/132): Personal Finance Features for Online Banking
• Online Banking Report (142/143): Social Personal Finance
• Our FinovateStartup Conference April 29 in San Francisco, where Buxfer, Expensr, Jwaala, Mint, and Wesabe will present the latest in online personal finance features

Notes/Sources:

1. Users: per BusinessWeek Online, Feb 2008, figures are reported by the companies and may include inactive users; Mint has been updated to 180,000 from 130,00 based on new figures reported in the Bank Technology News article published in April 2008

2. Traffic: per Compete estimates of website traffic for March 2008, retrieved April 21, 2008. Compete estimates traffic from its online data and can be off by a factor of two or three-fold for smaller websites.

3. As reported in a Bank Technology News article published in April 2008.

4. This table does not reflect all the players, such as Intuit's new Quicken Online, just the ones highlighted in the BusinessWeek article.

In a Feb. 11 BusinessWeek Online feature (here), reporter John Tozzi listed the self-reported user bases at seven new entrants in online personal finance. The roundup led with an anecdote about Wesabe CEO Jason Knight answering phone calls from users (see inset).

The seven companies listed below are only a subset of the online personal finance space. The list does not include users at Quicken Online, Yodlee, Mvelopes, and another two dozen smaller players. Nor does it include users at financial institutions that support online personal financial management such as Bank of America, Wells Fargo, Key Bank, River City Bank and others.

Sources: Users per BusinessWeek Online, Feb 2008, figures are reported by the companies and may include inactive users; Traffic: Compete, Inc, estimated unique visitors for January 2008

*Will be presenting at our FINOVATE Startup conference April 29, 2008

For more information:

• Previous NetBanker coverage here
• Online Banking Report #131/132: Personal Finance Features for Online Banking
• Online Banking Report #142/143: Social Personal Finance

Two years ago, computerized personal financial management was a two-horse race: Intuit's Quicken vs. Microsoft Money. Both full-featured. Both relatively easy to use. But both were packaged software apps, clearly not the future of consumer computing.

Fast forward to 2008: We now have two dozen startups, several banks, and other financial stalwarts, offering online personal finance of every size and shape (see Online Banking Report 142/143 and 131/132).

The latest entrant: Quicken Loans, which launched an open beta of Quizzle, an online budget and personal finance portal that features home values, mortgage advice, and free credit reports/scores from Experian (see note 1).

Quizzle also calculates what it calls your Quizzle score based on your credit score, home value, savings, debt, and household income/expenses (see second screenshot, below). Debt payments are imported from credit report data, but users can edit the information or add other items to improve the results.

Quizzle also provides home-value estimates calculated from public records, but in my case, it's no Zillow, and listed a home value that was significantly wrong (see note 1).  But it's simple to edit the number with your own estimate. Quicken Loans should consider tapping Zillow's API to provide a second opinion.

The sign-up process
Signup is simple with users providing name, address, birth date, email address, income, and home-purchase date. Email address is verified with a message that must be confirmed. Then identity is verified online using data pulled from the Experian credit bureau.

This is the same procedure used by every online credit-report provider with one huge exception. Quicken Loans DOES NOT REQUIRE A SOCIAL SECURITY NUMBER, a huge usability and privacy gain. The company is allowing credit-report access based on a name/address/birth date match. That's a welcome improvement for the user.

Analysis
There are a few rough edges in the tool. The home-equity portion is not well explained. In my example, my home value was shown to be about $50,000 more than the loan balance. However, in the equity portion of the tool, it showed that my home equity to be zero. Evidently, the site uses an 80% LTV criteria to calculate the amount of home equity available to lend against. While that's a perfectly reasonable assumption in today's credit environment, it should be spelled out in detail.

But overall, it's a great tool. The really free credit report and score alone are enough of a payback to gain consumer usage. The rest of the Quizzle score is less useful, but still interesting. And seeing it all in one place is fantastic. It will be interesting to see how Quicken Loans pulls me back to the site in the future.

Quizzle is off to a great start, and I look forward to seeing more companies, including banks, credit unions, and card issuers, integrate credit scores/reports into their online offerings (see note 2).

Overall scores:
    Look and feel (user interface) ==> A
    Credit information ==> A+
    Other tools ==> B
 

Quizzle home (18 Feb. 2008, prior to entering a ZIP code)

Overview pages showing the makeup of the overall Quizzle score
(upper right)

Note:

1. Quizzle uses a 900-point scale for credit scores, padding 50 points to everyone's score compared to Fair Isaac's FICO that tops out at 850. This makes you feel a little better about your score. No doubt, credit score inflation will continue, with someone using a 1,000-point scale in the near future. 

2. WaMu has provided free credit scores to credit card customers for several years.

The two dozen online competitors of Intuit's Quicken can breathe a sigh of relief today. The 800-lb guerilla has done them a favor, levying a monthly fee for its new online-only option, Quicken Online (press release here). While the $2.99/mo fee, after a free month, is reasonable, it's much different than FREE. Look for the websites of the competition to trumpet the $35.88 annual savings very soon.  

Intuit could easily have offered its online option free of charge. While that would cannibalize its packaged version, the overall impact to its bottom line would have been insignificant (note 2). And a free Quicken would have made it much harder for Mint, Wesabe, Geezeo, Buxfer and others to gain a footing (note 1).

My guess is that Intuit doesn't feel too threatened by the startups, yet. The security issue is extremely difficult for a new company to overcome. Intuit is one of the few tech companies with a brand that has trust levels on par with a financial institution. Millions already entrust their entire tax return, which has far more personal info than an online bank account, with the company. 

Intuit will allow the startups to build a following, then acquire the promising ones and convert their users to Quicken Online. All for less than the cash it would have foregone by offering Quicken Online free.  

We'll compare and contrast Quicken Online with the startups in an upcoming Online Banking Report (previous reports here and here).

Notes:

1. A few hours before Quicken Online went live, Mint issued a press release trumpeting its 100,000 registered users. That's an impressive number for a company that went live in September (previous coverage here). However, assuming 20% to 25% of those are active, there are still more than 500 times as many Quicken desktop users. 

2. Intuit's fiscal 2007 pre-tax profit was $670 million. 

Intuit has been beta testing a fully online version of its flagship product Quicken since September. According to Eileen Ambrose, writing for the The Baltimore Sun (here), the product will launch Jan. 8, 2008, at a price of $2.99/mo (note 1), $12 more than the entry-level, packaged version ($24 at Amazon), but $8 less than Quicken Deluxe ($44 at Amazon).   

Intuit is already advertising it on Google when searching "quicken online." Below is a screenshot of the landing page (here):

The service is still in beta and requires an "application" to use. Interestingly, one of the requirements listed in the FAQ is that beta testers must allow Intuit to download data from their bank account nightly. So obviously, account aggregation is a key component, not that that's a surprise. Automated account downloading is now "table stakes" for online personal finance.  

We'll look at the service in detail after we've had a chance to use it.

Note:

1. Intuit's ad on Google says (below), "Sign up for the new Quicken Online Free!" which sounds like a lot less than $36/yr.

We first discussed the usability advantage of direct-to-the-desktop information delivery in the 1998 Online Banking Report, Creating the Amazon.com of Financial Services  (see note 1). We called it a "meter" instead of today's widget or gadget, but its essential function was to show balance levels on the user's PC without requiring a login each time.

Last week, Wesabe became the first company to implement that concept with its Mac Widget shown below (Wesabe link here). The widget displays the balances in the various accounts tracked through the company's personal finance platform:

Several other personal finance companies have previously launched widgets including ClearCheckbook which released a Google Gadget on March 14 (here) and  Mac Widget a few days later (here). Other financial widgets are offered by billQ, Buxfer and Mortgagebot (see previous coverage here and here).

However, Wesabe is the only one streaming real-time balance updates thanks to its automated downloading of account data from linked financial accounts (aka account aggregation). Without the automatic updates, a widget is more window dressing than functional tool.  

Therefore, we're giving Wesabe its second OBR Best of the Web this year in recognition of its new widget which once again raises the bar for financial information delivery (note 2), if only for Mac users. 

Notes:

1. We last covered desktop technologies in a 2002 Online Banking Report, Grabbing Desktop Mindshare (# 85).

2. Recent OBR Best of the Web winners are covered here. Five awards have been handed out this year: two for Wesabe, and one each for Jwaala, Buxfer and Obopay. In the past 10 years, 67 companies have won Online Banking Report's Best of the Web awards. Only five companies prior to Wesabe have won the award twice: Bank of America, Citibank, E*Trade, Everbank, and Wells Fargo.

Joining the increasingly crowded online personal finance space is Banzai, the brainchild of Morgan Vandagriff (LinkedIn) who envisioned the system while working for a wealth management-advisory firm, SEI Investments.

Vandagriff, a 2002 Wharton biz school graduate, is positioning his firm as a financial assistant, not just a financial automation tool. Rather than sit back and let users put their finances on autopilot, Banzai induces them to spend 5 minutes every day tracking and categorizing their spending. And unlike Web 2.0 companies hoping to scale to millions of users with a handful of employees, Banzai assigns a personal coach to each user and actively encourages users to make contact.

How it works
Banzai uses "jars" as the metaphor for budget categories. Users establish jars for every bill, spending category, and income item. Transactions are uploaded from previously downloaded bank and credit card statements using a proprietary uploader similar to Wesabe's. Entries can also be made manually.

Banzai then forces users to take money for every transaction from one of the pre-established jars. It believes that it's important for users to "touch" every transaction to see how it impacts their pre-established spending plan. If a jar is empty, say groceries, then users must take money from another jar to cover the transaction. It helps users see the tradeoffs in spending. It's not a zero-sum game. Users can have their "reserve" jar go negative, signifying debt spending.

Take the company tour here.

The company
The four-person company is headquartered in Provo, UT, coincidentally just 10 miles from their most similar competitor Mvelopes, a personal finance site established in 2002 and run by Finicity (formerly In2M). The company has been in development mode since early this year. It is planning an official launch (to public beta) on Nov. 12, but anyone can sign up now at its website.

The company also competes with newer players, Wesabe, Mint, Buxfer, Jwaala and others and the big packaged-software players, Intuit's Quicken and Microsoft Money (note 1). Like its most-similar competitor, Banzai's business model calls for modest monthly or semi-annual fees; in this case, $4.95/mo or $29.70 for six months. The $30 fee includes a copy of a 120-page book, The Banzai Way.

First impressions
Banzai has a great logo, user-friendly layout, vibrant color and easy-to-read copy. The company has developed a good product tour, YouTube video, and blog - all the usual trappings of a Web startup, circa 2007. And the founder sounds very customer focused. It's unfortunate that a video game occupies the primary URL <banzai.com>. The company's  <banzaiway.com> address along with the unusual spelling, will make it somewhat harder to find.

I like what Banzai is doing, but I wonder, as I always do, how the company will attract users. Few people have the discipline to spend any time, let alone 5 minutes a day, managing their finances, and most of those already use Quicken or Money. And the $5/mo fee puts Banzai at a disadvantage compared to the free sites. 

However, Mvelopes has survived at double that rate, and if customers can be convinced it works, one caramel macchiato per month is not much to pay to keep your financial house in order. In fact, a site is somewhat more trustworthy when its business model is obvious, an important benefit in online finance. Finally, putting a a face on the product with a personal coach on call may help differentiate Banzai from the free sites. 

Screenshot: Transaction sorting

Screenshot: Jar setup wizard 

Note:

1. See our recent research on personal finance in Online Banking Report #142/143 and #131/132.

Mint has certainly caught the attention of the nation's press. Over the weekend, I watched CEO Aaron Patzer interviewed on San Francisco's channel 5 (video here). Today, the Wall Street Journal ran a Q&A with Patzer in the Lee Gomes Talking Tech column under the headline, Financial Software Moves to the Web (p. B3, see note 1). The WSJ article itself is a throwback to the late 1990s, talking about the advantages of Web-based apps vs. desktop apps. 

The Mint press coverage reminds me of the 2000/2001 period when Yodlee and Vertical One burst on the scene with "account aggregation" services. Mint wisely steers clear of that out-of-fashion term and focuses on the benefits it provides, namely saving users from themselves by pointing out the sometimes substantial money to be earned putting spare cash to work in a higher-yield account.  

Note:

1. Thanks, Mom, for the WSJ tip. And no, the "developers conference" mentioned in the article was not our FINOVATE, it was TechCrunch 40 held two weeks earlier. Mint won awards at both.  

Ever since receiving a private beta-invite a month ago, I've been meaning to run new personal finance site Mint through its paces. Then, after it won Best of Show at TechCrunch40 and our FINOVATE conference, I really wanted to see if the product could possibly live up to the expectations created while watching CEO Aaron Patzer give a demo (see previous coverage here, see note 1 below).  

But it takes time to really analyze a website, and I hadn't got around to it until today, when I was inspired by Ron Lieber and his team at the new Dow Jones/IAC site FiLife (press release here) as they reported on their individual results using the Mint's online personal finance tools (see coverage here).

I will file a series of reports as I use the program over the coming weeks. Today, we begin with the first impressions.

First Impressions
Homepage: One thing you notice when you visit Mint.com is that it looks nothing like a banking site (see first screenshot below). That can be good or bad. It's good because it sets the site apart from a normal financial services site. But that can also be a problem because the first, second, and third things users care about at a new financial site is whether it's secure or not. And a bankish "look and feel" can increase consumer trust.

But Mint does an admirable job walking the fine line of creating an engaging look while still reassuring visitors that it fiercely protects their data and privacy. The three large benefit statements in the middle create interest in the product, while the bank logos and the TRUSTe at the bottom provide visual clues that Mint is a serious player.

And the graphic design, leveraging the clever "Mint" name, combined with the light green color scheme, create an inviting site that should do well converting lookers into registered users (active users is another matter, more on that later).

Copy is concise, just 60 words above the fold (see note 2), and completely benefit oriented. Learn more button allows users to drill deeper, and you can't miss the call to action, Sign Up Now in the middle of the page.

Features page: Navigating to the feature page is simple, either click on the "Learn More" blue button in the middle of the page or use the "Features" tab at the top. The page does a great job laying out the key benefits with good use of headers and concise, bulleted lists supplemented with clear, attractive screen-captures of key points (see second screenshot below). Also note the prominent placement of big-name financial brands, Chase, Discover, and E*Trade, to increase trust.  

While the page does a good job highlighting features, it doesn't provide any interactive way of learning about the tool before signing up. Video and audio help goes a long way in demonstrating the features (see Jwaala/Amplify CU Money Tracker video here).

Mint.edu: A nice touch. Instead of calling it "education" or "blog" or something else no one would ever click on, Mint uses the clever Mint.edu (see third screenshot below). That's a URL that will resonate with its younger members and anyone familiar with higher education domain names. And once at the .edu site, engaging blog entries allow users to dig deeper into what is going on with the company and read about personal finance topics in general. RSS and email subscription options are clearly presented in the right-hand column.

Grade: A+

Mint Homepage (19 Oct 2007)

Mint Features page (also accessible via "Learn More" button on homepage)

Mint.edu page (19 Oct 2007)

Notes:

1. The video of Aaron Patzer's FINOVATE demo will be online within the next week at FINOVATE.com. In the meantime, you can see him on the Channel 5 SF news here.

2. Red line in screenshots 1 and 2 indicates the bottom of the screen using 1024 x 768 display on 13.3-inch laptop screen.

Compete's latest data confirms the spike in traffic at three-week old online personal finance startup Mint. The startup created considerable buzz after winning the $50,000 grand prize at TechCrunch in September (see previous coverage here).  

According to Compete, Mint's 200,000 unique visitors in September equaled that of $17-billion Webster Bank, the 64th largest U.S. bank or thrift holding company according to American Banker (Q1 2007). It will be interesting to see if Mint experiences a dramatic traffic decline after the publicity-driven visits slow down.   

Traffic at Mint.com (blue) vs. Webster Bank <websteronline.com> (red)

New TechCrunch co-editor Erick Schonfeld posted a short article yesterday (here) about Mint winning the Best of Show award at our FINOVATE conference (note 1). That post allowed TechCrunch's 600,000 readers to weigh in again on the pros and cons of Mint's model. During the past 24 hours, it attracted 72 comments, many with security concerns. Mint's CEO Aaron Patzer bravely joined the discussion and posted a half-dozen of the comments himself.

It's interesting to understand the concerns posted by TC readers. Of course, this is not at all a mainstream audience, so we take the complaints with a grain of salt. But it's still indicative of the hurdles a new financial institution, especially an unregulated one, faces when launching a new service.

Schonfeld's post also included the first metrics we've seen from the two-week old company:

• 50,000 total registered users
• 35,000 active users (have come at least once since registering)
• 5,000 power users (use it every day)
• 5,000 mobile alert users

I check Facebook about once or twice per week to see what new financial apps have been posted. So far the ones we've looked at include (see previous coverage here):

• Lending Club's P2P marketplace
• Prosper's Fantasy Banker
• PayPal
• Wesabe
• Buxfer
• TD Bank's Split It
• Obopay's BillMonk

The latest entrant, iWant from online personal finance specialist Geezeo (see screenshot below). iWant is an application that allows Facebook users to share with friends their wants and needs, such as "buy an iPhone" or post more goal-oriented items such as, "pay off my student loans" or "throw a graduation party." And Geezeo ties it up nicely by tapping PayPal's API to facilitate "contributions" to the financial goals. It's also integrated into Geezeo's online personal finance application so users can track their goal progress in real time. ChipIn offers similar payment functionality in its Facebook app (previous coverage here).

I wonder if Geezeo will make a P2P lending play here? If Geezeo's software included a repayment option, the iWant "donors" could easily become iWant "lenders" and a whole new market might open up. 

If you are attending our upcoming FINOVATE conference next week in New York, you'll be able to ask co-founders Peter Glyman and Shawn Ward yourself. We are fortunate to have not only Geezeo, but two other early Facebook innovators, Prosper and Lending Club on the DEMO stage. If you can't make the event, check our website in two weeks for full length videos of each DEMO.

Does it seem like every NetBanker blog post lately is a plug for our FINOVATE conference (oops...plug #1)? Hmm ... maybe we are a little stuck there.

OK, here's an online personal finance startup that's NOT presenting at FINOVATE (plug #2), Pertuity, the brainchild of ex-PNC Bank exec Kim Muhota. I like the overall look (below), decked out in our FINOVATE colors (plug #3), but clearly it's a placeholder for something more substantive (see note 1).

The Dare to Compare function, while provocatively named, is basically a well-dressed financial calculator that shows you where you stand in terms of income, savings, and debt compared to the rest of the country and those in your age group. It's a nice feature, but hardly unique and certainly not enough to attract visitors, let alone bring them back (see note 2).

UPDATE: After seeing Colin's comment (below), I looked at the site again and realized that I missed the "create a new group" function that allows you to compare your income, savings and debt against other pre-defined subsets. That's an interesting angle and could create a more sticky site with users going back to see how they are growing their income/savings/debt compared to various peer groups. I look forward to seeing how this plays out at Pertuity.

The Rate Survey, Expert Advise, and Blog sections are also just bare-bones link areas with little original content so far. The site appears to have launched just last week, so we are not criticizing (yet), just pointing out the current facts.

The website says "coming in 2008," so we'll be sure to check back in six months and see if they live up to their homepage boast:

....as we gear up towards our launch in early 2008; when we will bring to market a disruptive set of products that will uncomplicate your life, simplify your money and free your dreams.

Note:
1. The homepage has an overall calm look and feel, refreshing for a finance site. But Pertuity needs to lose the clip art of the three scary "suits" in the lower right and enlarge and break up the block of 10-point type in the middle (same goes for the micro-sized font in the blog).

2. Colin Henderson blogged positively about the Dare to Compare feature yesterday (here), but so far anyway, I don't share his enthusiasm that it's "quite revolutionary."  Colin probably has a better crystal ball than I, so I'll reserve judgement until the official launch. (Also, see my update above; obviously, Colin did a better job reviewing the functionality than I.)

Update (8 PM Pacific): Earlier this evening, Mint was named Best Presenting Company at TechCrunch 40 (see here) and took home the $50,000 grand prize. A good first day in the life of the startup!    

Congratulations to Mint on being one of just two financial services startups to win a spot at TechCrunch 40, the tech-startup con-fab in San Francisco that concludes this afternoon. More than 700 companies applied for the presentation slots, and just 40 were chosen. The other financial company was Cake Financial which competes with Zecco, Covestor, and Social Picks, in the "social investing" space, i.e., companies that help users track their investment portfolios and share them with others.

Mint presented in the "Productivity & Web Apps" category this morning and received high marks, scoring a 4.0 out of a possible 5.0 from 67 voters. During the first seven sessions (35 companies), only three have scored higher than 4.0. Mint also received favorable comments from the expert panel comprised of Guy Kawasaki, Esther Dyson, Roelof Botha, and Mike Arrington (blog post here).

For those of you attending our FINOVATE conference Oct. 2 in NYC, you'll have a chance to see a live demo from Mint CEO Aaron Patzer. If you can't wait until then, Mint opened its personal finance app to the public today with a public beta version. Let us know what you think.

One of the biggest themes at our upcoming FINOVATE 2007: DEMOing the Future of Online Finance (here) is the interesting developments in the online personal finance space (see lineup below).

As we mentioned last week, the race to add personal financial management (PFM) features to online banking sites is just getting started. To some extent, every bank and credit union supporting online banking already offers extensive personal finance functionality. Think back on how the average person managed day-to-day finances prior to 1997: telephone calls, ATM slips, or in my case, the moment of terror once per month when opening the monthly bank statement.

But now that everyone offers base level PFM, the new race is to provide advanced features to hold on to customers, attract new ones, and potentially cross-sell complimentary products such as debt consolidation, mortgage refis, insurance and so on (see note 1). We also hope to see some fee income from the new features, either through elevated checking account fees, or with premium online banking surcharges (note 2). The latter appears unlikely to happen in the United States unless Bank of America starts charging fees.

At FINOVATE we'll see demos from five key players:

• Two industry veterans, both two-time OBR Best of the Web winners, will be launching significant new versions this fall: Digital Insight (Intuit) and Yodlee
• Two "class of 2007" new startups: Jwaala (coverage here) and Mint (coverage here)
• And Geezeo, which recently changed its name and moved aggressively into personal finance (coverage here)

Digital Insight (Intuit)
One of the most intriguing acquisitions in online banking in the past ten years was Intuit's purchase last year of online banking platform provider Digital Insight (see coverage here and here). Everyone expected the merged companies to push hard on personal finance, the core of Intuit's much-admired brand. I've had a chance to see the Personal FinanceWorks and Small Business FinanceWorks demos several times and came away impressed. Combined with the depth of Digital Insight's client base, these products have a chance to become the online banking standard within a few years. Intuit is a two-time OBR Best of the Web winner with its Web-based tax services.

Yodlee
Yodlee used to be known as "that account aggregation company." But over the years they've worked hard to shed that image and morph into a full-service financial tools provider. The company offers account-opening tools, bill payment services, personal financial management, long-term archives, and, yes, account aggregation, although it's now more integrated with the company's other services, especially its MoneyCenter personal financial manager. MoneyCenter is the engine behind Bank of America's MyPortfolio which helped Yodlee win its second OBR Best of the Web (see coverage here).    

Notes:

1. For more info on online personal finance, see Online Banking Report #132/133 and #142/143.

2. For more info on premium online banking pricing, see Online Banking Report #109.

The race to become the next Quicken of online finance is heating up this fall with several launches expected before year-end (note 1). At our upcoming new products conference, FINOVATE 2007, you will be treated to live demos of five leading personal finance apps. Three are newcomers: Geezeo, Jwaala, Mint, and two are industry veterans launching new online versions, Digital Insight (Intuit) and Yodlee. Here are brief profiles of two newcomers. We'll look at the other three in part two on Friday.

Jwaala
Jwaala, out of Austin, Tex., made a splash in March when it debuted on Amplify Credit Union's site, winning our OBR Best of the Web award in the process (see post here). The specific feature to win recognition (see note 1) was the personalized RSS feeds available to MoneyTracker users. The natural language search is also a significant improvement over typical expense manager search functions.

Jwaala, which was a finalist in the TechCrunch 20 start-up conference, has also built a simple Google-like, text-based ad server into its MoneyTracker interface. It allows CU and bank marketers to run relevant marketing and educational messages next to transaction data and query results (see screenshot #1 below). Amplify CU, which is an investor in Jwaala, has given the service considerable marketing play with several links on its homepage (see screenshot below) and a series of instructional/marketing videos accessible from the MoneyTracker landing page (here).

Mint
Mountain View, Calif.-based Mint is still in limited private beta, so we can't say much about its online personal finance manager. However, the company says this about itself:

Mint is building a free, simple, and secure personal finance web-app. Designed to be effortless, Mint consolidates your financial life in one place. Easily see how much you have, how much you owe, and where your money goes. Advanced alerts notify you before you bounce a check or forget to pay a bill. Patent pending algorithms even show you personalized ways to save and make more money. If your finances could use organization without effort, Mint is for you.

After putting our name on its mailing list several months ago, we finally received an invitation to its private beta Saturday. I am about to sign up, but since I will be sworn to secrecy, I wanted to finish this post first, so that I wouldn't have to worry about accidentally revealing a feature. As we mentioned in our previous post (here), you can learn quite a bit about the product and the company's outlook by reading the active Mint blog (see screenshot #3 below) which has published 102 articles in its 6-month history, an amazing amount of content for a company that hasn't yet launched its product.

Notes:
1. For more information, consult two recent reports from Online Banking Report: Online Personal Finance and Social Personal Finance.

2. OBR Best of the Web awards are given out occasionally for features that raise the bar in online financial services. It is NOT necessarily an endorsement of the company or its full product.

Exhibits 

Screenshot 1: Jwaala interface showing personalized "marketing bar" (4 Sept 2007)

Screenshot 2: Amplify CU homepage with links to Money Tracker (5 Sep 2007)

Note: Amplify makes great use of video to sell the benefits. Check out the video tour of its "cafe style" branch (on the Amplify homepage here, click on the "play video" button to the right of the branch photo).

Screenshot #3: Mint blog main page (5 Sept 2007)

A number of industry analyst firms have recently opined that developing online personal financial management (PFM) capabilities can help banks grow online banking adoption and strengthen their customer relationships.

My take: I disagree. In my opinion:
  1) growth in online banking adoption is a demographics game
  2) PFM will not drive further online banking growth
  3) most banks are wasting their money developing online PFM tools

First off, let's consider who isn't banking online. For the most part, it's older consumers. According to Forrester's numbers, 78% of Gen Yers and 72% of Gen Xers bank online. With already high adoption, and representing just 45% of the total online population, there's not a lot of room for growth there. With 57% of Boomers and 42% of Seniors banking online, any significant growth in online banking adoption will come from these segments.

But PFM isn't going to be the catalyst to make that happen. The primary hurdles keeping these "offline" bankers away from the online channel are security concerns and habit (they don't perceive there to be added convenience to banking online). On top of that, there are a number of people who enroll for online access and then find it to be cumbersome and difficult to continue.

PFM isn't going to help overcome those hurdles. Javelin Research recently found that just one quarter of online bankers were interested in online PFM. So why would the holdouts be more interested? Computer-based PFM tools (not just online ones) have been around for a long time. You probably even own a copy of Quicken or Microsoft Money. The number of people who own copies of these programs is in the multi-millions. The number of people who regularly use their copy of the program is....well, much less.

Now you can cite all the market research you want about how consumers want more help managing their finances and tools to help them manage their budget and finances. But intentions don't always translate into actions. If today's 40, 50, and 60-year olds haven't started using PFM tools yet -- and aren't online banking either -- offering PFM tools online isn't going to lure them online.

The market for online PFM isn't online holdout Boomers and Seniors, but Gen Yers (and the next generation of consumers) who are already online -- and a whole lot more involved in managing their financial lives than Boomers or Seniors were at that age. But Gen Y is already banking online, so PFM tools aren't needed to lure them online.

And unfortunately, what banks are offering (or considering offering) may not help deepen the relationship, either. These young consumers want help making smarter financial decisions -- not just tools to track and manage their finances. And most of the online PFM tools that banks are developing don't do nearly as good a job of doing this as offerings from sites like Wesabe do.

The fact of the matter is that banks have, for the most part, missed the boat on this opportunity. It might not be too late for banks to develop a Wesabe-like capability. But it's not time, money, or technology capabilities that keep banks from doing it. It's culture, mindset, and the practices banks use to justify their investments. 

Banks who invest in online PFM capabilities will look to justify their investments through incremental cross-sell. But consumers who do adopt these tools will run away faster than you can say BOO if their bank starts aggressively cross-selling through their PFM implementations.

It really comes down to strategy and business model considerations. Banks looking for answers to how to attract new customers and deepen relationships with customers aren't going to find them by trying to grow online banking rates with PFM tools. Banks need to figure out how to make a profit by helping consumers manage their money -- and not just by pushing more checking account and savings accounts at customers and prospects.

Ron Shevlin is Vice President of Client Solutions at Epsilon. Prior to that, Ron was an analyst at Forrester Research. He opines (translation: rants) about financial services marketing at Marketing ROI: Whims From Ron Shevlin. The opinions expressed here are Ron's, not those of NetBanker, his employer, or any firm trying to help banks build online PFM tools (obviously).

While so many FIs are scratching their heads wondering what to do about Facebook, it turns out that TD Canada Trust, one of Canada's biggest banks and the ninth largest bank in North America, is doing all kinds of interesting initiatives there.

What makes their efforts so impressive is that they have clearly tried to figure out the value they add to the demographics of Facebook users. They have managed to strike a balance of being true to their brand, yet not seem like they're pandering to a youthful audience, and offering something of value to the Net Generation.

What first crossed my desk this week was SPLIT IT, an application they created that allows roommates who are on Facebook to manage how they split basic bills.

Welcome to the SPLIT IT by TD Canada Trust application – a no-hassle, budget-sharing tool that enables you to share bills with your roommates. SPLIT IT makes it easy to determine who owes what, view your balances, and keep on top of your payment dates.

The application launched within the past few days. When I first saw it on August 15 it had 44 users. It's grown to 66 a mere 24 hours later. It will be interesting to see where it goes during the  next few weeks. I'm also curious to see how it's promoted. Will TD send information to its youth customers, or will they rely solely on word of mouth?

After seeing SPLIT IT I was mightily impressed. It's not easy to find a way to add value for Facebook users. From SPLIT IT, I linked through to their Money Lounge, and I was floored. They have job postings, videos, offers, all sorts of ways to engage the Facebook audience. Scrolling down, I noticed that they have 1,480 members of their group. Even if many of the group's members are employees, it's still an impressive engagement metric.

So, well done TD Canada Trust! The first bank to build its own Facebook app.

William Azaroff is the interactive marketing & channel manager at Vancity where he develops interactive marketing initiatives, and pioneered ChangeEverything.ca, the groundbreaking change-themed online community. William also plans strategy for the online channel, with a view to its potential to help Vancity, its members and the community. William brings nine years of experience in Vancouver, Seattle and Los Angeles producing Web projects for such clients as Honda, Disney, Intuit Canada and Nike Jordan. He writes about the intersection of online branding, social media and the world of banking on his blog at azaroff.com/blog

Today, Buxfer added funds-transfer capabilities to its online personal finance app (see announcement here, previous coverage here). The service is free through the end of August, but could eventually carry 1% to 2% fees to cover transaction costs.

Buxfer co-founder Shashank Pandit has been dangling this bit of news in front of me for the past two weeks. But he would only tell me that they were partnering with a big player to enable funds transfer (note to Amazon attorneys, he did NOT violate the NDA). I figured it would be Chase, Wells Fargo, or perhaps PayPal. Even with the rumors this week of Amazon's new payment services, I hadn't put 2 and 2 together.  

This morning it all makes sense. Amazon.com announced a potentially disruptive payment service, aptly called Flexible Payment System (FPS). And it's announced, in what else, a lengthy blog post at the Amazon Web Services blog (see note 1). The FPS website is here. The company even built an FPS Sandbox where users (see screenshot below), both individuals and companies, can play with the service without moving actual money around.

Buxfer is using Amazon Payments to allow users to settle their debts electronically, a vital piece of a social personal finance app. Online personal finance without payment capabilities is like the Internet without email. Even if the company ends up charging a small fee, the convenience would be worth it for many users. 

Implications
The Amazon service potentially makes it easier for smaller Web-based companies to take on traditional financial institutions. It won't alter the payments landscape overnight, like PayPal did in 2000, but it could usher in a rash of new entrants competing with banks and credit unions for the high-end personal finance customer (note 2). But the big stumbling block: consumer trust still favors incumbent financial institutions. In any event, the game just became more interesting. For more information, see Online Banking Report: Social Personal Finance.  

Buxfer homepage noting Amazon Payments

My default account page at Amazon's payments sandbox (I have not made any transactions, so the ledger is empty)

Note:

1. The post is signed by Jeff, which is Amazon evangelist Jeff Barr, not the slightly more famous other Jeff (Bezos). 

2. Another company using Amazon Payments is FreshBooks, a small-business billing service.

A commenter yesterday asked if anyone had heard of BudgetPulse, an online personal finance site that opened its public beta site two weeks ago.

Well, we hadn't heard of it, but in this increasingly crowded space, that's no surprise. We are now tracking more than 20 online personal finance sites (previous coverage here). With low-cost server space, easier programming tools, APIs, and cheap viral marketing through blogs and social networks, the barriers to entry are a fraction of what they were just a few years ago. A good programmer could put together a simple financial tracker in their spare time.

While this will spur creativity and innovation, ultimately benefiting end-users, there is a downside. Security and privacy.

As we looked at BudgetPulse, which at first glance looks like several other Web 2.0-inspired finance sites, we couldn't help but wonder who was behind the site. There are no names, personal or company. Even the who is info for the domain is masked (domain registered in April). The only email address is disguised in spam-defeating format: "info (at) budgetpulse.com". Right now, the public portion is a two-page website with a few popup forms. The FAQs are empty. The forum is coming soon. There is a blog, but it only has three short posts. And there are misspellings in the website and blog copy. The websites entire security discussion is a single sentence:

We protect your account and data with advanced security methods.

More than likely this is simply the work of one individual who concentrated on coding the functionality first, and whose day job prevents him/her from spellchecking their HTML. But what if it's a scam? Convince a few people to use it to track their finances, then hit them with requests for their credit card numbers "to enhance the experience" or to their checking account number for payments, e.g., "Join our beta test and earn $500/mo as you test it."  

I admit that could be far-fetched, and I have absolutely zero knowledge of that happening at BudgetPulse or any other site. But it does bring up the bigger issue of consumer trust at independent, non-regulated personal finance sites (i.e., non-financial institutions). Even the well-funded personal finance sites such as Wesabe and Mint must deal with the mistrust and skepticism consumers have for new companies wanting to get involved in their lives, especially their finances. 

The solution: Financial institutions, with their trusted brands, partnering with or acquiring online personal finance sites to bring new functions and features to their customers.       

After six short weeks, there are 48 applications in Facebook's Money category. At Netbanker we are most interested in the 14 directly related to banking, payments, and lending. So here's the most-used list with the stock trackers, calculators, and shopper apps removed. Lending Club continues to lead the pack as it has since its May 24 launch in conjunction with the new Facebook platform. Applications are listed by number of Facebook users that have added them to their profiles.

Top 10

1. Lending Club by Lending Club >>> 11,012 users

Lending Club enables those in the Facebook community with good credit to easily borrow from each other with a trusted third party managing the process and assessing the risk. Previous coverage here.

2. Fantasy Banker by Prosper >>> 4,674 users

Prosper bills Fantasy Banker as a twist on HOT or NOT, "a fun & educational way to get acquainted with person-to-person lending by betting on whether real-life Prosper loan listings will fund or not." Previous coverage here.

3. My Bucks By Aryeh Goldsmith >>> 3,926 users

A virtual currency called the Facebuck.

4. BillMonk (Obopay) by Charles Groom and others >>> 2,793 users 

BillMonk is an expense tracker specifically designed to track debts and obligations (such as rent) between individuals. Used Facebook APIs long before the F8 platform was announced. Previous coverage here.

5. Buxfer by Shashank Pandit and Ashwin Bharambe >>> 1,482 users

Buxfer is another expense tracker specifically designed for singles sharing households expenses. Previous coverage here.

6. Pay Me by Yellow Media >>> 842 users

Pay Me was developed by a third-party developer to make it easier to initiate PayPal payments right from Facebook. Previous coverage here.

7. ChipIn by ChipIn >>> 830 users

ChipIn is a simple way to collect funds for an event, trip, or anything. Users create a clickable badge that is displayed in their profile. Other Facebook users chip in via the PayPal network. Previous coverage here.

8. PayPal by PayPal >>> 500 users

The official product from PayPal, the division of eBay. So far, merely allows you to easily request money from your Facebook friends. More functions are said to be on the way. Previous coverage here.

9. Ven by Hub Culture  >>> 154 users

Another virtual currency.

10. iSpend by Reman Child and Shawn Gupta >>> 141 users

A new financial tracking app posted last week. 

The Rest
11. Wesabe by Wesabe, Inc. >>> 104 users

The Wesabe Facebook app currently supports group discussions. It is not currently linked into its Web-based personal finance app. Previous coverage here. 

12. OmniSpense.com by Jonathan Kelly >>> 60 users

The newest expense tracker, appeared in the money category in the past 48 hours, but looks like it may have been posted about 2 weeks ago. 

13. BillTrack Bill Reminder by Michael Irizarry >>> 59 users

Bill Track is built specifically for tracking bills (surprised?). It was posted earlier this week. 

Yet another virtual currency.

The social networking phenomena has entered a new phase: eCommerce. It has always been a bit hard to visualize mainstream businesses, like banks, book sellers, or phone companies making a profit on MySpace. It's been a great place for musicians and online dating companies to grab market share, but a MySpace Checking Account didn't seem just around the corner (see MySpace coverage here).  

All that changed May 24, when Facebook opened its network to outside developers, making its service more like Windows than MySpace. Already the service has grown by 3 million users, more than 10%, in the past 4 week, to 27 million (see Facebook profile in today's Wall Street Journal).

More interesting are the 893 new services have opened their doors on the platform. The most popular, Top Friends by Slide, already has 6.4 million users. Yes, that is no typo, in one month a Facebook service grew to more than 6 million users. With traditional marketing, it would have cost a bank or card company as much as $1 billion to attract that many customers assuming acquisition costs of $100 to $150 per new account. 

And it's not just the one app. A new Seattle-based music preference service, iLike, has added 3.8 million. There's not a whole lot happening in commerce apps YET, the first financial company with a service offering, Lending Club (see previous coverage here), is the most popular business app, with just under 10,000 users. That's about what iLike attracts in a busy hour, but for a financial services company, and especially a startup, that's huge, a grand slam using tired baseball metaphors.

For many reasons, it takes longer for traditional companies to pounce on new opportunities. But over the summer we'll start seeing hundreds of businesses launch on Facebook. By next year at this time, the Facebook apps directory will probably look like the New York City Yellow Pages (or at least San Jose).  

Financial Institution Opportunities

Searching the site, we only see four financial services that have launched on Facebook:

• Lending Club's person-to-person loan marketplace
• Prosper's lending game
• Wesabe's personal finance groups
• Pay Me, a payment service developed by Australian Ad Agency, Yellow Media using the PayPal engine (screenshot below, we'll provide more details once we finish testing it)

But so far there is no:

• Bank
• Credit union
• Credit card issuer
• Mortgage lender
• Brokerage (although there are several stock monitoring service including Forbes, Yahoo, and Social Picks)
• Rates tracking service
• Credit report monitoring service (though Identity Guard is advertising heavily today)
• Identity theft protection service

Let the race begin. But you better move faster than you've ever moved before, if you want to get the huge first-mover advantage on the Facebook platform. Good luck.

For more information, see our latest Online Banking Report, Social Personal Finance.

If you are interested in online personal finance, you'll want to read tomorrow's feature by the Wall Street Journal's Jane Kim, Managing Your Money in Public View (here). It's an accurate and almost entirely positive story that includes interviews from four satisfied users: two from Wesabe* and one each from Geezeo and Buxfer. 

Wesabe definitely gets top billing, as it should as the leader in the space. In addition to Geezeo and Buxfer, the article also mentions BillMonk/Obopay, Zecco, NetWorthIQ, and two new stock-trading-oriented social sites, TradeKing and Covestor. The only major omission is Mint, not because they were overlooked, but because they are not yet public. See here for our previous coverage of online personal finance.  

The market-size forecast cited is from the latest Online Banking Report, Social Personal Finance (discussed here and here).

One side note that I found interesting: The article included a disclosure that the paper's parent, Dow Jones, is working on a personal-finance site with IAC/Interactive Corp, parent of LendingTree, GetSmart, mortgage lender HomeLoanCenter.com and RealEstate.com. It will be very interesting to see what comes out of that effort.

---

*Wesabe was on top of this story, posting it to their blog earlier this evening.

When researching new mobile banking launches (see our earlier post here), we ran across one of the more innovative financial institutions in the country: Austin, TX-based Amplify Federal Credit Union <goamplify.com>, a $400 million asset institution with 40,000 members. The CU's tagline, Bank less. Live more. is right on target for the majority of financial consumers. 

It's possible that Amplify uses more of the ideas we've featured in Online Banking Report and NetBanker than any financial institution we've come across. For example, cafe branches with free WiFi, mobile banking (WAP), Web 2.0 look and feel, high-yield checking (up to 5.1% APY), online chat, fee-based ($5.95/mo) value-add checking account (Amplified checking) loaded with online and mainstream features, and a host of other services from college planning to eBay bidding (see menu here). One surprising omission: no blog.  

OBR Best of the Web
But our favorite feature, and winner of our fourth OBR Best of the Web 2007,* is Amplify's new personal finance management program, MoneyTracker. MoneyTracker uses natural language search so members used to Googling there way through the day will feel right at home. Instead of using slower drop-down search, a customer wanting to review recent Costco purchases simply enters "costco this year" in the search box.

The program was developed by Austin startup, Jwaala, which announced it in November. Amplify, which went live March 5 (press release here), is Jwaala's first installation.

MoneyTracker also includes an account aggregation engine so accounts at any financial institution can be tracked. And like eBay, it allows users to turn any search into an automatic alert with the option of receiving the information via email, SMS, or an RSS feed (see inset). As far as we know, Amplify is the first financial institution in the U.S., if not the world, to institute personal RSS feeds for its customers, and it is the basis for the Best of the Web designation.

Amplify posted a series of six videos (here) that do a great job explaining Money Tracker, an important part of gaining trial. The style, copywriting, on-screen talent, and staging, are among the best we've seen online.  

Amplify's Main MoneyTracker page (link here):

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*OBR Best of the Web awards are given out occasionally for features that raise the bar in online financial services. It is NOT necessarily and endorsement of the company or its full product.

Wow, I can breath again. I just loaded the latest Online Banking Report on to our website, Social Personal Finance: Will social networking revolutionize personal finance? I'll post a summary later. Subscribers, you can download it now (here) free of charge. Everyone else, it's US$395 on its own, or for "just" $700 more you get the new report plus a stack of others, including our report on Web 2.0-ing your Bank, Mobile Banking, Mobile Payments, the latest online banking forecast and more.

Thanks to Scott at Payments News and Colin at The Bankwatch, who've already given the report a mention. And thanks to the Bryan Donovan and the folks at Compete, who provided a new online financial services data snapshot that I know you are going to find extremely valuable. More on that tomorrow.

Now, back to our regularly scheduled blog.  

You know you have it made when your company becomes a verb. Everyone on the planet knows about Googling. Then there is MapQuesting directions to the party, Yelping the best Thai food South of Market, and in financial services, Zillowing the house down the street. Someday, you may Wesabe your wireless provider to see how much users spend there and how they rate the experience.  

At least that would fit the vision of Wesabe co-founder and CEO Jason Knight, who I caught up with over coffee yesterday in Seattle as I was putting the finishing touches on a report on Wesabe and other so-called "social personal finance" companies (note 1).

I came away with a new respect for what Wesabe is trying to do. They are not so much looking to be a Web-based Quicken, as I assumed; but more a Quicken/Google mashup, delivering consumer insights by finding meaning in millions of consumer purchases. Overall, it's more like what Google does with a billion Web pages, than what Quicken does with a few thousand transactions (for each user). 

But unlike Google, which can crawl websites at will, Wesabe must convince consumers to open up their spending files to the equivalent of a search engine crawl. To do that, Jason says that Wesabe "must make financial information interesting (to its users)" while also making it drop-dead simple to upload data to Wesabe.  

No easy task. But Wesabe seems to have a head start on making that happen. More on that in our full report (see note below).

Note:

1. Our next Online Banking Report, Social Personal Finance, will look at the entire sector. You'll find it here next week. It will include a detailed look at Wesabe and Lending Club, which is catering entirely to Facebook users (see post here), and what banks should do to compete and/or partner with this new type of financial provider.

It's dangerous to hype a startup while they are still in stealth mode. After all, given the average life expectancy of a Web-based startup, this blog post could outlive Mountain View, CA-based Mint.com (see note 2). 

But just knowing that the company snagged $5 million in VC money, which is huge in this space, means they will be interesting to watch, even if they don't catch on. And with that kind of money, Mint has a deeper bench and can be more aggressive than other newly minted personal finance startups such as Buxfer and Wesabe (see previous coverage here).  

Here's what we know so far:

1. $5 million in funding (confirmed by company Monday)
2. Planning a full-service personal finance manager with alerts (see posted elevator pitch below)
3. Adopted a short, real, and catchy name and had the resources to buy the primary .com address (it had been using mymint.com until very recently)
4. Appear to be hiring aggressively (see here)
5. Founder Aaron Patzer has been working on the company since late 2005
6. The company received money from ex-Google sales manager Aydin Senkut and first-round funding from First Round Capital. Other investors include current or former execs from Intuit, Charles Schwab, and Yahoo.
7. It's active blog now totals 50 articles with many lengthy how-to posts on personal finance and related interests  

Elevator pitch (posted at Mint.com):

Mint is building a free, simple, and secure personal finance web-app. Designed to be effortless, Mint consolidates your financial life in one place. Easily see how much you have, how much you owe, and where you money goes. Advanced alerting notifies you before you bounce a check or forget to pay a bill. Patent pending algorithms even show you personalized ways to save and make more money. If your finances could use organization without effort, or a big improvement without a lot of work, Mint is for you.

NetBanker translation: Mint will use account aggregation tools, much like Quicken, Yodlee, and more recently Buxfer and Wesabe, to load bank and credit card transactions into its web-based personal finance manager. The company will layer in meta-alerts, that will look across all accounts and notify you when balances are low, crooks are pinging your account, and so on.

So far, that's no different than Yodlee's current product in use at Bank of America and many others. But the company's name, as in "minting money," along with this key phrase in the above pitch (emphasis added) makes it clear that is will focus not just on cutting down your Starbuck's bill, but also on how to improve your personal top-line:

(will provide) personalized ways to save and make more money

If you want to keep closer tabs on Mint, you can take its online survey and request to be in the private beta. And you should grab the feed to the company blog. Finally, you can see from its job postings that it is serious about finding top talent to run the company. There are positions open for both VP Marketing and Senior Product Director among others (here).
-----

Notes:

1. *Sorry, for some reason, I needed to be the first to write that headline. From now on, I promise to steer clear of mint-related puns.  

2. This statement is not meant as a criticism of the company, which looks very promising. I have not seen their product yet, nor do I want to since I am currently writing a report on this space and would not want to inadvertently share any of their secrets. The report, Personal Finance & Social Networks, will be posted by the end of the month at Online Banking Report.  

The latest entry in the mobile banking space is Geezeo, who unveiled an account aggregation/mobile banking mashup Sunday called Geezeo Mobile. Take a few minutes and watch their screencast (here), which does a good job explaining how it works. Geezeo recently changed its name from DebtFolio and still operates a credit card selector at debtfolio.com. The company also offers a student loan consolidation service, called Geezeo Student.  

 Here's how it Geezeo Mobile works:

1. At the Geezeo website, list the usernames/passwords and challenge answers if necessary, to any credit card or bank account you wish to track (see screenshot below)
2. Register your mobile phone with Geezeo
3. Send a text message to Geezeo, and it will return a text message listing your current balances at all the tracked accounts (see inset)

The account aggregation is powered by CashEdge, which has considerable credibility in the banking industry, but is an unknown with consumers.

Analysis
As much as I personally love this service, it's probably ahead of its time, at least as a standalone product. It's a combination of two little-used services, text message banking + account aggregation, offered by an unknown company. Furthermore, massive security and privacy concerns are barely addressed, and it doesn't work in IE6. But it is a beta offering in its first week, so those things will be fixed. And the mobile service is just a piece of a larger personal finance offering according to the email sent to Geezeo registrants May 13:

Geezeo Mobile and Geezeo Student are part of a much larger online personal finance manager that's soon to be released. Geezeo will feature solutions to help you manage your money, keep track of where your money goes, provide suggestions for improvement, help you meet your financial goals and connect with others.

We have yet to connect with the founders, but according to MobileCrunch, the business model is contextual advertising. If that's true, Geezeo will need to appeal to the youth market, where bank account balances are lower, security concerns are fewer, and texting is the norm. But a better business model might be licensing the tool to banks and credit unions. In one fell swoop, the Geezeo app would give a financial institution a unique mobile banking offering, an entry into account aggregation, and an appealing platform for younger customers.

As Web 2.0 meets personal finance (see note 1), we are seeing for the first time, tiny one- and two-person startups entering the online banking and personal finance space. Back in the bubble days, there were numerous startups such as X.com, dotBank, and PayMe, but they usually required a bankroll of $10+ million just to push something out the door. Today, an innovative personal finance site can be created in a programmer's spare time (eg. BudgetTracker) or for less than $100,000 if the principals take their salary in stock.  

Despite being overly fascinated with issues of shared expenses, such as splitting the dinner bill (see Buxfer main default page at login below), there is much to be learned from the newcomers (note 2). They tend to be refreshingly designed and clever in their use of modern navigation and communication techniques, something that cannot always be said about typical banking sites.

And the newcomers are also trying to ride the "social networking" wave, and expense-splitting provides a so-called "social money" benefit for use in elevator pitches and press releases. And for couples with his and her checking accounts that divide bills and expenses between the two, expense-splitting features could be a marriage saver. 

We'll be looking at a number of these sites during the next few weeks as we prepare a follow-up to our August 2006 Online Banking Report on Personal Finance 2.0 (link here). Wesabe is the best known of the bunch, having received a considerable amount of press as a social money site. But before we get to them, take a look at one of their competitors, recently featured on TechCrunch (here).

Buxfer is similar in many ways, but has not had near the attention. The company which recently relocated to Silicon Valley as part of the Y-Combinator program, came out of beta in September, but has recently added several new features. 

They have several impressive features that no bank or credit union has offered to date:

• Login via third party authentication APIs from Google, OpenID, AOL, Yahoo and Facebook; really helps get users past the "do I really want to give this company my personal info" stage (see note 3)
• Transaction import, via simple browse/upload function (see note 2)
• Transaction input via custom email address: Buxfer provides users with their own email address that can be used to send new transactions into the system (see inset) 
• Auto-tagging: users can select any key word in a transaction description and have it auto-tagged, for example, say Fred works for you, and when you have a transaction called "lunch with Fred" you can have it auto-tagged with "business" 
• File append: You can easily add note or attach files, such as receipts, to individual transactions
• Widget/gadget that shows expense breakdown that can be displayed directly on the desktop (see screenshot above) 

Weaknesses:

• If you enter an email address for someone who you are setting up as a participant in a shared transaction, eg. splitting the dinner tab, Buxfer prompts you to save them as a new contact. In doing so, an automatic email is generated from the user, inviting them to join the service. That's fine, but the user needs to have more control over the invitations. Buxfer's blog provides a work-around, suggesting using something other than an email address, but spamming your friends should never be the default.
• The main page (screenshot above) focuses on who you owes money to whom, instead of the more common issue of what bills are due and when.
• No support for transactions. Other than being able to import transaction files that have been previously downloaded from banks and card issuers, it's all manual data entry. Helper tools such as "copy", "repeat entry" and "auto-tagging" help a bit, but to be an effective tool the service needs to integrate more closely with the actual bill and the payment. That's why these companies need to forge close ties with financial institutions to move beyond the outlier Tracker 2.0-user into the mainstream market.

Notes:

1. For more on online personal finance, see our full report on the subject, Online Banking Report #131/132 (here)

2. I suspect the expense splitting priority is a result of founders who are young, single, frugal, and obsessed with tracking personal finance details. They are the types that worry about whether the bar tab was split equally, and go home and code solutions to it, while the rest of their group is sleeping it off.

3. When logging in through a third-party service, users are not required to provide ANY personal info, i.e. there is NO registration process, an amazing experience. 

4. Screenshot of file import:

The Wall Street Journal published an extra section yesterday on personal finance entitled, Your Money Matters. Online financial tools were highlighted in Jane Kim's, "Check it Out: New online tools from financial institutions can help consumers manage their money." 

Here's the back story on several of the items mentioned in the article:

• Our sister publication, Online Banking Report, was cited as the source of the following statistic: "About 16% of U.S. households used some personal-finance feature at least once in 2006. That percentage is expected to climb to an estimated 33% by 2016, with nearly three-quarters of those households using personal-finance tools offered by their financial institution online."
  
  The information cited in the WSJ story was contained in the report we published last fall in Personal Finance Features for Online Banking (OBR 131/132; see Table 3, p. 3, lines 4 and 10). Current usage estimates were based in part from data provided by Javelin Strategy as shown in Table 2 on the same page. 
  
• In the article, Bank of America's My Portfolio was the first of two existing personal finance tools mentioned. The service, powered by Yodlee, was quietly launched in December and was covered in NetBanker at the time (link here) and received an OBR Best of the Web award in our final report of 2006 (OBR 137) where it was rated the third most important development of 2006.   
  
• The second example cited was Wells Fargo's MySpendingReport (see inset and previous coverage here). The service, which is basically just a consolidated view statement data across the bank's transaction accounts, is a great example of positioning online banking features in a way that resonates with users. It was awarded an OBR Best of the Web in 2005, finishing the year as the tenth most important new development of the year (report here).

The story finished with hints of new services planned for later this year at Everbank, Bremer Financial (powered by Corillian), and a Digital Insight tool that allows users to hand enter additional bill payments in order to their entire payments picture in one place.

Intuit's $1.3 billion acquisition of Digital Insight closed yesterday, marking the beginning of a new era of innovation in small business online banking (previous coverage here). It's a market that's been underserved for years (see Online Banking Report's, Small- and Microbusiness Online Banking, #107/108).

Intuit, which has iPod-like domination of small business accounting and bookkeeping via Quicken and QuickBooks, can now leverage the software relationship into the banking relationship.  The bloggers at Intuit's QuickBooks team-blog expanded on that theme