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May 2010 Archives
Here
are the news headlines we posted this week on Twitter (follow our feed here).
Expensify releases version 2.0 of
iPhone app for expense reports - The new Expensify app now allows users to add
cash expenses and scan receipt images to work off
line. Users can now create an entire
expense report from their mobile device. http://bit.ly/b1CAc0
AlphaClone adds new search, percent
of portfolio - The AlphaClone percent of portfolio option allows viewers to look at a
single stock and see which funds have the greatest exposure within a
portfolio. http://bit.ly/dojmhz
Lee Barba and Bruce Shelly join the
Kapitall team - Barba joins the Kapitall Board of Directors with experience in acquisitions.
He was CEO of Investools. Shelly joins the team as Advisor to Kapitall with experience from the
video gaming business. http://bit.ly/a4Augw
Amazon Payments Implements Yodlee
Instant Account Verification - Amazon Payments now uses Yodlee's technology to verify user accounts
to create faster, safer P2P transactions according to Yodlee. http://bit.ly/9UThEa
Intuit has selected Expensify as a
promotion partner for expense
reporting -The Intuit Workplace App Center with Expensify, MyFax, and OfficeDrop. http://bit.ly/dwQiry
iBearMoney launches the Money 4.1
App - iBear Money's Money 4.1 works on Windows mobile phones, iPhone, iPod Touch and
now iPad and allows users to synchronize data between multiple devices. http://bit.ly/atbUPw
BillShrink.com launched a new search
for TV, cable, satellite services to search for the best value - Billshrink's new
search allows users to compare television service pricing based on
their preferred channels or programs and available service based on
the user's address. http://tcrn.ch/cujEE8
Fiserv, Inc.
study shows that 80% of internet-capable households use online
banking while only 40% use online billpay - The Fiserv, Inc. study also shows that women now make up the majority of online
bill pay users, a reversal from the 2002 study. http://bit.ly/dtVOFM
Fiserv, Inc.
partners with Phone Factor, Inc. to provide phone-based user
authentication - The Fiserv, Inc. partnership will allow financial institutions using the Fiserv
systems to provide passive or active user authentication via
customers' mobile phones. http://bit.ly/bz1tvo
Visa, Inc. and
Monitise PLC announced a joint venture to provide mobile payment
technology in India - India is the world's second-largest mobile market with nearly 600
mobile-subscriptions. The technology from Monitise will allow for bill-payment,
transit ticketing and other services via mobile phone. http://bit.ly/bLFgmI
 In April 2009, kaChing demonstrated its
new Investment IQ platform at FinovateStartup.
(video link) Since then, the company has made several changes to its business model.
In 2009, the platform was open for
anyone to share their holdings and allowed users to mimic any private
investor's portfolio. Since that time, kaChing has altered its
platform to so that it only tracks professional Registered Investment
Advisors (RIAs). As to what motivated the change in direction, the
startup says that most people are more interested in following a
professional investor's strategy than another DIY investor. It also
found that professional investors were looking for a platform to
share and promote their track record.
There are now two sides to the kaChing
business:
Consumers
kaChing allows investors to open an
account and invest with RIAs based on their track record and
portfolio focus. This provides small-scale investors unique access
to high-level fund managers that normally only service customers with
minimum portfolios of $50,000 to $500,000 or more.
Business-to-Business (KaChing Pro)
kaChing Pro is the professional side of
the platform. The company handles administrative chores and provides many analytic tools allowing RIAs
to profitably manage smaller accounts. Any professional can use kaChing Pro, but only those whose "Investment IQ" surpasses 140
points are open to all users to invest with.
KaChing Pro markets to small and
medium-sized RIAs with assets under management not exceeding $500
million. Currently, kaChing has sixteen qualified RIAs and more than
600 investors. The company has almost $11 million in assets under
management. The company has raised more than $10 million in venture
capital funding. The company has more than 20 employees, up from 10
at the time of FinovateStartup 2009.
For more information about kaChing see
www.kaching.com
or for more information about kaChing Pro, see
http://pro.kaching.com.
The company's brokerage partner is Interactive Brokers, LLC.
 A year after first appearing at FinovateStartup (Finovate 2009 video here; FinovateStartup 2009 video here.) , BillShrink.com has doubled in size, now with 22 employees, and more than 450,000 unique visitors per month (see chart below).
In January 2010, it launched a parallel service for small businesses, to compare business credit cards. And soon it will expand to certificates of deposit and corporate wireless plans.
BillShrink believes that its highly personalized vertical searches is increasingly desired by consumers and isn't likely to be replicated by others. The site is sticky, because users can save their search info and preferences and BillShrink will continue looking for a better deal. When one is found, users receive an email, which brings them back to the site.
Unlike traditional search, BillShrink's value-add is calculations based on actual user data. For example, the it considers the user's actual gas mileage and location and then calculates the optimal place to fill the tank. Likewise, BillShrink can compare reward credit cards based on your actual charging history and rewards preferences.
The company has not needed to raise any additional capital this year as it continues to roll out a new vertical every few months. BillShrink is targeting all "high wallet personal finance categories" according to Peter Pham, CEO.
The next vertical rolls out May 26, but Pham was tight-lipped as to what it would be, other than to hint that it would be in the consumer realm.
Pham cites the company's belief that users search expectations have grown. He believes that they want something better than Google's mish-mash of results. BillShrink meets those expectations by providing an apples-to-apples comparison tailored precisely to the user, and it doesn't feel like a random advertisement.
BillShrink.com page for business
Traffic chart from Compete.com
 I checked in last week with Christian Klacko of Micronotes to see how they've been doing this past year.
Since last year's Startup conference the company has grown to eight employees and added three members to its advisory board:
Glen Urban, MIT Professor of Marketing and the former dean of the MIT Sloan School of Management.
Drazen Prelec, leading behavioral economist at MIT
Tom Burgess, serial marketing entrepreneur and former CEO of Third Screen Media
For those unfamiliar with Micronotes, the company provides an interactive direct marketing tool that can be deployed by banks to generate non-interest income. Once opted-in, online banking customers are invited to get cash in return for taking 20-30 second online "MicroInterviews" with a brand of their choosing.
Users are also offered high-value, highly targeted offers based on their responses to the interview questions.
Consumer brands pay bank customers for engaging with them through the MicroInterview and banks earn a revenue share for each completed interview.
The interview questions appear at the end of an online banking transaction. Upon completion of the MicroInterview, the cash back amount is transferred into the customer's account.
Demonstration from FinovateStartup 2009 can be viewed online here.
Since its Finovate debut, the company has completed 2 field trials and grown its customer base to include both national (e.g. Sears, Barnes & Noble, Marriott) and local brands. Micronotes is also in trial with several banks and expects to bring more financial institutions on board in 2010.
MicroInterview Step 1 Upon Completion of an online banking transaction
MicroInterview Step 2
MicroInterview Step 3
 On May 10, 2010 Lending Club began offering five-year, peer-to-peer loans targeted primarily at prospective auto loan clients.
At this time, users can select the option of three or five year loans, however according to Rob Garcia, later this may be limited to those stating intent to finance a car purchase and then offered to those who reject 3-year notes for other purposes, but this will depend on investor interest in the five year loans.
Unlike a traditional auto loan, this will be an unsecured personal loan with no lien on the title of the vehicle. This appeals to used-car buyers who will want to go to the dealership with cash-in-hand and negotiate from there. It also provides buyers the option of borrowing against their vehicle value in the future.
In an effort to keep P2P lenders interested in longer-term investments, the service fee on the five-year notes will remain 1% and the interest rates for all but the lowest risk borrowers will be slightly higher than the three-year notes. Assuming the same default rate, this will provide P2P investors with a higher average return than a similar three-year note.
Five Year Notes
 All Lending Club loans are limited to highly-qualified borrowers and FICO scores of 665 or higher. The company grades all loan applicants according to risk, assigning letter grades A through G. A-classified borrowers will receive the same interest rate on the three- and five-year notes, B-classified borrowers will receive an interest rate two grades higher for a five-year term, and C and below borrowers will get an interest rate five grades higher. But even with the higher rates, monthly payments will be substantially lower with the longer loan term.
Illustration of the same loan as either three or five years
This is the first 5-year P2P loan in the US market, but in the United Kingdom, Zopa has five-year notes available.
A recent blog post from Lending Club's Senior Director of Project Strategy Rob Garcia highlights the recent market opportunity that Lending Club has been able to take advantage of--the tightening of personal credit from traditional financial institutions, even for qualified borrowers.
As a result, Lending Club is growing rapidly, closing $9.5 million in peer-to-peer loans in April 2010 and $114 million since inception. Recently, volumes have been growing 5 to 10% each month.
Lending Club by the Numbers
Finovate 6 kicks off today with MoneyAisle
stepping up to the demo plate at 8:30 AM ( Pacific time). The event is sold out and we are looking forward to the largest
Finovate audience ever, more than 500 banking and fintech execs. For
background on the 36 demoing companies, see our
previous posts (logos below). You can follow the days
announcements here or by following our Netbanker Twitter account or watching the
#finovate hashtag on Twitter. The event will not be broadcast
live, but we'll have videos available here in about two weeks. See you at the show!
This is a guest post from John Fishback of 154 Consulting -- the firm that helps us coach the innovative fintech companies selected for Finovate on their demos.  Finovate's
unique format is exhilarating for attendees, but it puts real pressure
on demoing companies to leave the audience with something to remember
and act on. The demo from BrightScope at Finovate 2009 in New York ( video) is an excellent example of a demo, and especially a conclusion, built to drive the audience to act.
Ryan
Alford, BrightScope's President and head of product development, speaks
to three audiences with his demo: individuals relying on their 401(k)
for retirement planning, plan sponsors, and advisors. For each, he
offers something that makes BrightScope compelling. More importantly,
he asks each group to take action at the end of the demo.
Ryan
spends most of his time speaking to plan participants, and shows how
BrightScope helps them understand how their 401(k) plan stacks up. In
this first section, Ryan highlights a feature that helps participants
and BrightScope work together to their mutual advantage: requesting a
rating for your plan. This is a savvy choice. By spending time on this
feature, he turns participant's mental dialogue from "I should check
this out if my plan is covered" to "I should check this out no matter
what."
Ryan's
other two audiences, plan sponsors and advisors, get less time on their
value drivers. But Ryan effectively illustrates their needs and shows
how BrightScope meets them. For plan sponsors, the honest desire to do
right by participants is supported by BrightScope's dashboard, which
shows what drove plan ratings. For advisors, their hope to generate
business in advising poorly performing plans is clearly supported by
BrightScope's advisor tools.
To
this point, Ryan has done a good demo. He has a unique product and
he's letting it speak for itself. But his conclusion is head and
shoulders above most. He asks each of his audiences to complete a specific task, saying:
"If you are a participant, you should get your plan rated.
If
you are a plan sponsor, you should request a free demo of the dashboard
to see if this tool will help you understand and improve your plan.
If you are an advisor, please contact us to learn about how you can gain access to our advisor tools."
In
my line of work, we call these "calls to action" or "asks." They're the
actions you want your audience to take, and it's always important to
make them very clear.
It's
even more important at Finovate. Finovate's format of seven-minute
demos with a minute-long break between each provides a lot of
excitement, but it also gives the audience an immense amount to think
about. After each demo ends, there are only about twenty seconds to
really think about the demo before Finovate's master of ceremonies,
Eric Mattson, thanks the presenter and begins introducing the next
company. Those seconds are when the audience decides what to do.
At
the Finovate 2009 event in New York, a third of presenting companies
left the stage with no call to action. They simply summarized their
main points or key messages and thanked the audience. Just over a
quarter did better, finishing their demo by asking for a specific
action that could take place anywhere.
The
rest? Forty percent of presenting companies ended their demo with some
version of "come see us at our booth." That's not a bad ask,
particularly because Finovate explicitly builds in networking sessions
between demos.
But
after too many demos end with "see us at our booth," the audience
starts to tune the phrase out. Several people tweeting on the
Finovate 2009 demos on Twitter remarked about the constant refrain of "come to our booth," and lamented that they didn't know why they should.
So how should a demo end if the next step you'd like the audience to take is actually to come visit your booth? Use the moment to start the conversation you'd like to have one on one. Rather than a generic invitation to visit the booth, invite the
audience to see some specific aspect of the product you haven't had a
chance to show. Or focus on a possible objection (e.g. "If you're
interested in seeing how we integrate quickly and easily with 95% of
all core processing systems, we'll be walking through that at our
booth").
No
matter what you specifically close with, use the last moment you have
everyone's attention as BrightScope did - by asking the audience to
take the next step.
 This is a guest post from John Fishback. John is the principal of 154 Consulting and directs 154's Financial Services Product Group, which combines message development and presentation advice services with financial services industry experience to help financial services companies, startups, and vendors develop and market products that speak clearly to customers' needs. He can be reached at john@154consulting.com.
Just one week from tomorrow, three dozen of the hottest financial
tech companies come to the Finovate stage in San Francisco. We've
already written about how there are less than 50 tickets remaining, we've listed the amazing group of attendees who'll be there May 11, the twelve main conference themes you'll experience, and the original list of 32 demoing companies. Today, we announce the final four presenting companies:    
Come meet the founders and top execs of these fintech leaders next week. Register here. The final FinovateSpring lineup:
Finally, a thanks to our four FinovateSpring sponsors:
   
 Two-time Finovate Best of Show winner Mint has a couple of new tricks. The online PFM expanded its aggregation capabilities and added a new module for manually entering transactions. (Mint's Finovate video here.)
Mint is now using aggregation software from its parent company Intuit, the maker Quicken and TurboTax. Intuit acquired Mint last year for $170 million. Mint previously received account data through Yodlee (see our recent Yodlee post here).
The change doubles the number of financial institutions from which Mint can receive account information. Through Intuit, Mint can now access customer accounts at more than 16,000 financial institutions.
"Intuit Financial Services directly serve banks, so its aggregations work better than anything else out there," said Aaron Patzer, VP and GM of Intuit's personal finance group (source). Patzer also said that over one-third of all customer requests were for Mint to support more financial institutions.
And the primary missing feature, the ability to enter data manually, was finally added to the platform. Now users can manually add miscellaneous items to those automatically downloaded from financial institutions.
How manual entry works:
1. Click "Add a Transaction" to create a new spending record.
2. In the dialog box, enter the date and set the transaction type to cash or check, as appropriate (see screenshot, below).
3. If cash is selected, Mint will offer to deduct the expense from the last recorded ATM withdrawal. If check is selected, Mint provides a space where the check number can be recorded.
4. Clicking "I'm Done" adds the transaction to the user's transaction list in Mint, where it is automatically categorized and noted on the user's budget. Mint reconciles check transactions when they clear the user's bank account.
Mint also offers an option for pending transactions, such as credit card expenses that the user may want to track before they are processed by the card issuer.
The transition to the new software has not been entirely smooth. There have been a few days when I have been unable to access Mint.com and few points when the site did not display correctly, but things seem to be working fine now. And with unique visitors hitting 1.6 million in March (see our post on March traffic here), Mint is rolling again.
1. The new module for manually adding transactions
2. The module is available on the transaction record page
3. The module opens over the transaction record page
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