Finovate Startup Conference Company Descriptions

By Jim Bruene Posted on
Categories: Conference Calendar, Conferences, Finovate, Launches

image To give you an idea of the types of innovations being funded in financial services these days, here’s a capsule description of the first 48 companies demoing at FinovateStartup April 28 in San Francisco (note 1).

Attention attendees: You have just one day left to register (here) at the discounted price of $795. 

Finovate Startup 2009 Participants

Acculynk
Acculynk is a payments solutions provider with a suite of software-only services that secure online transactions by utilizing a graphical, scrambling PIN-pad for the secure entry of sensitive cardholder information.

AlphaClone
AlphaClone is a web-based investment research service that lets users explore the investing ideas of top hedge fund and institutional money managers.

Aradiom
Aradiom is a mobile solutions provider and designer of Java mobile applications and platform development technology including turn-key applications, embedded soft-token security solutions and BlackBerry® enterprise applications.

BillShrink
BillShrink is a personalized savings advisor that helps consumers make smart, money-saving decisions by providing continuously updated, personalized, usage-based recommendations on everyday services like credit cards and cell phone plans

BudgetTracker
BudgetTracker is a personal finance manager that allows users to manage their finances and keep track of their budget, bills, and transactions online without having to install software.

CalendarBudget
CalendarBudget is a free online personal budgeting tool that helps users organize and track their finances, plan future spending and save money.

Centrro
Centrro is a financial search engine that allows consumers to anonymously shop for personal financial products that best fit their specific credit profile.

CircleUp
CircleUp provides group communications services, which enable actionable and efficient interactions across diverse social, email, mobile, messaging and private web networks.

Cooler Inc.
Cooler Inc. enables users to know, decrease, and offset the global warming impact of their everyday purchases and activities by using the country’s only peer-reviewed carbon calculator to calculate impact and then providing reductions targets and strategies, and offering recommendations on high quality carbon offsets.

CreditArray
CreditArray is a vault of proprietary information to allow consumers to better apply for and manage their credit portfolios.

Credit Karma
Credit Karma provides consumers free access to their credit score and offers credit simulators, advice, and credit score comparison tools in order to allow them to more actively manage their credit and financial health.

GoalSpring
GoalSpring’s product, DebtGoal, makes paying down debt as easy and efficient as possible by taking into account all of a customer’s debt and helping them organize, optimize and pay it down.

Expensify
Expensify simplifies keeping track of business expenses by combining an electronic payment card and a web-based expense manager to automate expense report preparation, approval, and reimbursement.

Green Sherpa
Green Sherpa offers personal cash flow management software that lets users conveniently download, manage and update all their financial accounts via a single online resource.

Home-Account
Home-Account is in stealth mode at this time. 

HomeATM
HomeATM provides a secure PIN debit and PIN credit card transactions method via the Internet that utilizes the HomeATM swipe pad technology to allow users to conduct secure PIN-based transactions from home, ensuring virtually zero fraud and lower merchant processing fee costs.

iBearSoft
iBearSoft is the creator of iBearMoney, a personal finance application for the iPhone that allows users to input and categorize their transactions, run financial reports, analyze payments, and keep track of expenses.

iThryv
iThryv is a financial literacy platform that combines a content delivery system and an incentive system in order to create an immersive learning environment which provides a powerful tool when used in partnership with online banking and core providers.

Jwaala
Jwaala provides software for banks and credit unions that improves their online banking services. Their MoneyTracker application offers a personal financial management solution that can be added to any bank or credit union’s existing online banking solution.

kaChing
kaChing is a social investment community that applies an open source and social-networking strategy to offer every investor the opportunity to find outstanding investors, emulate their portfolios, and access the returns, insights, transparency and talent previously only available to wealthy individuals.

Kapitall
Kapitall is a rich web application that aims to make investing easy for everyone. Inspired by game design, Kapitall combines an graphical user interface with tools that make it easier than ever to research companies, build portfolios, share ideas and get smarter about the market.

Lending Club
Lending Club is an online social lending network where people can borrow and invest money at attractive rates.

LendingKarma
LendingKarma is a person-to-person lending site that makes it easy for parties that know each other to create loans and provides borrowers and lenders with tools to help service the loan and see it through to repayment.

Looniesdesk.com
Looniesdesk.com enables people to manage their finances online using an open source financial platform that allows developers to build sophisticated applications which will help users enhance their experience and increase the efficiency of the service.

Mint
Mint is an online per
sonal finance service that securely downloads users’ financial transactions, allows them to categorize their transactions, provides a unified view of all account activity and relevant account alerts, and offers personalized suggestions for significant savings opportunities.

Moneta
Moneta provides a secure, quick and easy form of online payment that directly debits users’ checking or money market account allowing users to only enter a secure username and password when making online purchases.

NCore
NCore provides enterprise class delivery channel solutions to financial institutions within the Asia Pacific and Middle East regions fusing applications, innovative security and middleware technology into a single integrated platform.

OurCashFlow
OurCashFlow offers personal finance management tools for financial institutions that can turn their website into a place where customers can create a budget, save money and achieve their savings goals.

Pennyminder
Pennyminder helps individuals and small groups manage their shared and personal finances by tracking deposits and withdrawals allowing them to see what’s happening with their money

People Capital
People Capital is a peer-to-peer private student loan service that utilizes a unique scoring system to predict a student’s potential and provide a true, unbiased measure of the economic value of an education that empowers students to make better educational decisions and offers multiple advantages for both borrowers and lenders.

Pertuity Direct
Pertuity Direct offers social lending for personal loans by bringing together the advantages of capital markets, social networks and traditional banking.

Portfolio Monkey
Portfolio Monkey provides free online portfolio management tools to help average investors optimize their portfolios and find customized investment ideas so they can create more efficient portfolios with higher expected return and less risk.

Prosper
Prosper is a person-to-person lending marketplace where people list and bid on loans using Prosper’s online auction platform.

The Receivables Exchange
The Receivables Exchange is a real-time online market for trading accounts receivable that gives businesses access to working capital at a competitive cost by connecting a global network of accredited investors to the nation’s small and mid-sized businesses.

Rudder
Rudder is a free personal finance software designed to minimize the effort required in managing money by helping users to manage their budget, track their bills and analyze their expected income and projected expenses.

Silver Tail Systems
Silver Tail Systems provides fraud prevention to defend users’ websites against business logic abuse through the use of behavior detection, efficient investigation and real-time mitigation to track suspicious behavior and divert the bad actors, leaving legitimate users unaffected.

SimpliFi
SimpliFi provides independent financial advice online. Users can complete a profile and receive a personal financial plan with specific actionable steps.

SmartHippo
SmartHippo uses the power of the community to find users the best rates on financial products and services.

SmartyPig
SmartyPig is a social saving service that helps users save for a specific goal by allowing them to invite others to contribute to their account, providing incentive boosts from top retailers, and offering a competitive interest rate.

Strands
moneyStrands is a money management service that helps users get information on anything from practical savings tips to getting help tracking expenses down

Syphr
Syphr is a technology and marketing credit union service organization that created RateMatch, a service that matches participating credit unions with the thousands of credit report purchasers per month.

ThreatMetrix
ThreatMetrix helps companies control online fraud and abuse in real time by profiling the device used in an online transaction so companies can determine whether the users are fraudsters or customers.

Transparent Financial Services
Transparent Financial Services is online comparison-shopping service for small businesses that uses technology to help users compare and purchase financial services like payroll processing, credit card processing and business loans.

Victrio
Victrio offers a credit risk management system that uses voiceprint recognition technology to fight credit card fraud and identity theft.

Wesabe
Wesabe is an online personal finance management tool that provides members with information about where they spend and links them with a community dedicated to helping each other make smart financial decisions.

WeSeed
WeSeed seeks to demystify the stock market by helping real people share what they know and make smart investing decisions based on the collective wisdom of the community.   

ZimpleMoney
ZimpleMoney is a web-based financial services platform enabling people and organizations to manage and administer financial agreements including loans, leases, rentals, tithing, trusts and settlements.

image

Note
1. Several other participants are remaining anonymous for the time being. 

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Virgin Money Joins UnCrunch America

By Jim Bruene Posted on
Categories: Advertising & Promotion, Bank of America, Lending Club, Loans & Credit, P2P Lending, Virgin Money

image UnCrunch America, the peer-to-peer lending educational/marketing campaign spearheaded by Lending Club (note 1) got a big boost with the addition of Virgin Money USA.

Not only does Virgin brings its considerable brand recognition, it legitimizes the effort as a true cooperative project, and adds a huge new category to the site, home loans. Plus, they get a much bigger number to put on the top of the homepage (below): $74 million instead of $1 million.

Other financial services participants include: Credit Karma (note 1), On Deck Capital and Geezeo. The campaign has its official launch today, although the website has been active since December (previous post).

The timing of the UnCrunch launch is perfect, following President Obama’s assertion last night that lending was the “lifeblood” of the economy. All active lenders, especially credit unions, should consider joining this effort or using similar themes in their marketing.

UnCrunch home page (25 Feb 2009)

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Virgin Money UnCrunch landing page (link, 25 Feb 2009)

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 Notes:
1. Lending Club and Credit Karma will be participating in our upcoming Finovate Startup conference April 28 (see full lineup here).
2. For more info on the market, see our Online Banking Report on P2P Lending.

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Visiting the Center for Future Banking

By Jim Bruene Posted on
Categories: Bank of America, Strategic Planning, Strategies

imageYesterday, while visiting Boston, we had the opportunity to tour the Bank of America-sponsored Center for Future Banking, a part of the famed MIT Media Lab.

We talked to researchers looking at:

  • consumer behavior in budgeting and managing their finances
  • mobile ecommerce tagging
  • artificial intelligence at the point of purchase

It’s always energizing to be on campus and see what the bright minds are up to. It’s a great reminder that creative thinking, new ideas, and new technology always propel us forward.

The BofA folks were doing a great job maintaining a positive attitude, but it was also obvious that the events of the past six months have taken a toll. Hopefully, that’s temporary. 

A couple interesting conversation points:

  • The Center is absolutely open source, dedicated to helping move the industry forward, not just BofA; they hope more banks and industry players will at some point join their research efforts.
  • There may be more startups and more innovations due to the economic downturn as otherwise unemployed individuals start new companies. 
  • There’s more need than ever to rethink traditional models.
  • This could be the absolute best time to start a financial services company.  

Thanks to Abhishek Mehta, who splits his time between Bank of America in Charlotte and the MIT Media Laboratory, for spearheading the visit. Thanks also to Jeff Carter, Srini Nallasivan, and David Price from Bank of America for the inspiring conversation. And a special thanks to the grad students and staff at the lab for allowing us to interrupt their work and learn about their projects: Kwan Hong Lee, Katherine Krumme, Nathan Greenslit, and Sajid Sadi.

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Nine More Added to Finovate Startup Conference Lineup

By Jim Bruene Posted on
Categories: Conferences, Finovate

imageThe financial services startup community will be out in force April 28 at our second annual Finovate Startup conference.

The nine new companies below, along with the 39 participants announced two weeks ago, plus several we can’t yet name, bring the total to 50 startups. That’s eleven more than last year! We can now say that we’ll have the largest group of financial services startups ever assembled in one place.

Don’t miss your opportunity to talk to the companies that will help change the financial services landscape in the coming years. Join the many bank, credit union, and technology execs in San Francisco on Tuesday, April 28, for a thought-provoking and exciting day (see note 1).

The early-bird deadline ends Friday, so register now for just $795. Current Online Banking Report subscribers can save even more. Look on the back page of the most recent issue, or email [email protected] for your customer discount code. 

Here are the latest additions to the conference (note 2):

image

Notes:
1.  And if you can come early, don’t forget BarCampBankSF2, happening Saturday and Sunday, April 25/26 (previous post). 

2. Are you a startup interested in participating? Contact Eric Mattson.

3. Members of the media, including financial industry bloggers, should request a press pass here .

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Mint, Quicken Online Release Registered-User Totals

By Jim Bruene Posted on
Categories: Intuit, Metrics & Market Research, Mint, Personal Financial Management

mint_logoWe’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.  image

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

Month-End Registered Users* Monthly
Gain		 Month/Month
% Gain
Aug 2008 404,000 — —
Sep 2008 458,000 54,000 13%
Oct 2008 544,000 96,000 21%
Nov 2008 606,000 62,000 11%
Dec 2008 720,000 114,000 19%
Jan 2009** 864,000** 144,000** 20%**
Feb 2009*** 934,000*** — —
Avg gain/mo — 94,000 17%

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

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How Can Online Banking Develop its Own Black Card?

By Jim Bruene Posted on
Categories: Barclays, Credit/Debit Cards, Premium-level Products, Pricing

image Yesterday, I looked at a list of free services likely to come under pressure as banks work on the Herculean task of returning to normal profitability. One area that’s likely to remain free for the foreseeable future is online and mobile banking, at least the core account-access portion of it.

But we continue to believe that financial institutions are missing a revenue opportunity to provide premium fee-based services to certain segments.

imageIf American Express can command $2500 per year for its black Centurion Card and Barclays $495 per year (see note 1) for its slightly more pedestrian Black Card launched in December (see note 2), why can’t banks get $10/mo for a similar premium version of online and mobile banking? The short answer: They haven’t tried.

Just for the sake of discussion, here’s a “gold online banking” service for which I’d pay $15 per month without a moment’s hesitation:

  • High-end website and iPhone app
  • Long-term (7+ years) online storage of images, transactions, statements
  • On-demand credit score like Credit Karma 
  • Credit bureau alerts when negative items hit
  • Account aggregation with weekly summaries like Mint
  • Email customer service with 30-minute or less turnaround time
  • VIP phone and tech support with no phone tree
  • No overdraft/NSF charges (within limits of course)
  • Travel rewards/sweepstakes on electronic transactions
  • Pre-filled one-click credit application
  • Extra security options
  • SMS balance inquiry
  • Iron-clad, no-fine-print security guarantee with 100% immediate reimbursement and emergency credit line

For more elaboration on these benefits, see our Online Banking Report on Pricing Online Services.

Visa Black Card homepage (15 Feb. 2009)
Includes one-page online application

image

Note:
1. The benefits of the Visa Black Card are similar to those from many gold/platinum cards. One of the biggest differentiators is free limited membership to Priority Pass which gets cardholders into 500 airport lounges in 250 cities. However, according to the FAQs, Black Card holders are limited to two complimentary visits per year, so this would cost $154 annually if purchased directly from Priority Pass. In fact, for $349 annually, you could get unlimited access to airport lounges. 
2. The Visa Black Card has been advertised with full-page ads in the New York Times, the latest on 10 Feb. 2009 on p. A5 (national edition).

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Will the Troubled Banking Sector Start Pulling Back on Free Consumer Services?

By Jim Bruene Posted on
Categories: Pricing, Strategies

image One thing that’s clear in today’s banking crisis: many credit products were severely underpriced relative to the risk. That means the entire financial services industry must reprice their product lines to get back to a “normal” level of profitability.

For consumers and businesses, that means higher rates, more fees, and most likely fewer free services. One thing that will surely be scaled back is the extensive branch system, which in the United States amounts to one full-service, often elegantly equipped, bank branch for every 1,000 households (see note 1).

But what other free services will disappear? Here are the current freebies that banks will closely examine in coming years. In most cases, the free benefits aren’t going away entirely, they’ll just be available to fewer customers. They are listed in order of most vulnerable to least. 

  • Free online bill payment: In our opinion, across-the-board free bill pay has never made economic sense for most financial institutions (note 2). We expect banks will begin charging the less-profitable portions of their customer base for it. 
  • Free branches on every corner: Branches are a huge, vastly underused, capital expense. There will be significant reductions in this area during the next 20 years (note 1). Branches aren’t going away entirely, but they’ll be far fewer, they will be smaller, and they will charge fees for many services currently offered free of charge.
  • Free credit card annual fees, interest-free grace periods, and rewards: Non-revolving credit card users get a great deal under the current system, 30-to-45 days interest free grace period, plus card rewards, and little or no annual fee. Card issuers, hit by lower borrowing by their prime customers and higher default rates from others, will restrict free services for convenience users.  
  • Free mailed statements: As the cost to mail statements continues to rise along with the percent of customers with online access, this freebie is destined for extinction. As with most benefits transitioning from free to fee, less-profitable households will see the fees first.
  • Free telephone customer service: Telephone customer support is relatively inexpensive compared to branches since most routine questions are answered automatically and human support can be outsourced to lower labor-cost areas. But we expect that free human customer service will eventually be limited to the more profitable households, with others paying per-use or annual fees.
  • Free ATM usage: Most banks will continue to offer free ATM use across their own networks, but will probably add qualifying criteria, such as minimum balances, debit card usage, direct deposit, and/or estatement usage.
  • Free checking: Because “free” checking isn’t really free after factoring in penalty fees and cross sales, it’s not likely to disappear from a bank’s marketing toolkit. However, unprofitable customers will see even more fees tacked on to their accounts, such as per-use charges for branch services, telephone support, etc.
  • Free online/mobile banking access: Online and mobile access is an inexpensive service to provide and is likely to remain free for most customers. However, we expect banks and credit unions to begin offering upscale “gold” versions that will carry annual/monthly fees for more benefits.

Notes:
1. For our take on the future of bricks and mortar, see Online Banking Report: The Decline of the Branch.
2. For more info on pricing bill pay and other online services, see Online Banking Report on Pricing.

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Pertuity Direct Launches Financial Mashup: Consumer Loans + Mutual Funds + Social Finance

By Jim Bruene Posted on
Categories: Launches, Loans & Credit, Online Banking Report, P2P Lending, Pertuity

clip_image002Last month I wrote about Pertuity Direct’s impending launch. It’s been live for a few weeks, and I’ve had a chance to review it in detail. The model is so unique, we created an entire special report on the company. It is available to our Online Banking Report All-Access subscribers here. Others can purchase for $195 here. And if you just want the executive summary, read on.

Overview
Pertuity Direct is an amalgamation of two financial services plus a social lending community:

  • Mutual fund: Retail investment assets are gathered via the National Retail Fund, an interval mutual fund created by Gemini Fund Services. The fund plans to invest primarily in consumer loans originated by Pertuity Direct (see note 1). At the outset, there are two mutual funds to choose from: one will invest only in loans to prime customers with credit scores of 720 or higher; the other will take on more risk and invest in loans to borrowers with 660 or higher scores. Minimum investment is $250 and current estimated fund expenses are 3.1%.
  • Consumer loans: Three-year installment loans of $1,000 to $25,000 will be originated by Pertuity Direct under state licensure. The loans will be sold to The National Retail Fund who will hold them until they pay off. Pertuity Direct will be paid a 1% servicing fee from the fund. Borrowers also pay a 1% to 2% loan fee at funding. The company is currently licensed in 37 states.
  • Social lending: The last, and least, piece of the product is a social lending forum, where mutual fund investors can purchase Pertuity Bucks to give to already-funded borrowers to help them repay their loans.

Analysis
Whether this should be called “peer-to-peer lending” is open for debate. Pertuity Direct makes all the loan decisions and sets the rates. Investors have no direct influence over which borrowers are funded. However, there is a social element because investors can donate to borrowers through the community area. The model probably most resembles a member-owned credit union or mutual savings bank.

From an investor’s standpoint, it’s a unique opportunity to capture banking interest margin without actually buying shares in a commercial bank. The mutual fund is more like a bond, so it should be less volatile than owning equity. Although current estimated management fees of just over 3% are a drag on earnings, the company hopes the percentage falls as the funds gain assets.

However, the mutual fund doesn’t have the liquidity or upside of an equity investment. It’s an interval fund, meaning they will allow some redemptions each quarter (note 2), but it’s not publicly traded. There’s also the matter of how they value the underlying assets of the fund. A proprietary model will value the consumer loan portfolio each day, but since the assets are not publicly traded, there is no way to really understand if that model is working until there is a performance history. 

Summary
Pertuity Direct does a credible job weaving these three disparate businesses together and its management team, with experience at PNC Bank and E*Trade, have great ideas on taking this business to the next level. But much remains to be done to educate the market and overcome the hesitancy of jittery investors. We will be following them closely (note 3). 

Screenshot: Pertuity Direct homepage (2 Feb. 2009)
The company posted a 3.5-minute YouTube video of founder Kim Muhota explaining the company’s offering.

image

Notes:
1. While the intention is to invest in Pertuity Direct-initated loans, the funds can also invest in other vehicles.
2. The prospectus says that it will allow 5% to 25% of its funds to be redeemed each quarter.
3. CEO/founder Kim Muhota will be participating in our FinovateStartup 2009, so you’ll be able to hear directly from him.
4. For more info on P2P lending, see our Online Banking Report on P2P Lending.

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PNC Bank Launches iPhone Mobile Banking in Apple App Store

By Jim Bruene Posted on
Categories: Apple, iPhone, mFoundry, Mobile Banking, PNC Bank

image You’d think that seven months after Apple launched the App Store for the iPhone, it would no longer be news when a U.S. bank adds an application to the store.

It’s not like a cost-prohibitive slotting fee is involved. Developers pay Apple exactly zero dollars to be listed in the store (note 1). Apple’s revenue is from the 30% share of any fees charged for an app. All the bank apps are free, so that’s not an issue.

But it is news since the addition of PNC Bank two weeks age (app here) brings the grand total of bank-specific apps to four, five if you count PayPal. Even if you include the several dozen banks supported by Firethorn’s multi-bank app, there are still no more than 40 banks supported (note 2). And there’s not a single credit union, yet. 

Here are the five App Store participants in order of their appearance:

Wells Fargo has an iPhone app, but it’s not yet shown up in the official App Store.

PNC mobile banking app
PNC’s entry is a full-featured app powered by mFoundry. Along with balance and transaction activity, it includes bill pay, funds transfer, and an ATM finder with location-based capabilities. Users must enable mobile banking from within online banking in order to use the app.

The app has risen from number 17 in the Finance category a week ago to 13 today (note 3). However, the app has not yet made it to the PNC website (note 4).

PNC iPhone App screenshots (11 Feb 2009)

image        image

image

Notes:
1. The app does need to be approved by Apple, a process that can take weeks or longer.
2. Users can also track thousands of financial institutions through Mint or PageOnce.
3. Bank of America is #1, Chase is #4, PayPal is #5, Mint is #6, Firethorn is #9.
4. A PNC.com site search for “iphone” yielded just one result, an iphone listed in a mobile banking compatibility table. (Off topic: Note to PNC Bank, your site search doesn’t function in Firefox 3.0).
5. For more information on the market, see our Online Banking Report on Mobile Banking and the latest forecast in last month’s Online Banking Report Online & Mobile Forecast.

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MoneyAisle Introduces Multi-Auction CD Laddering

By Jim Bruene Posted on
Categories: Auction platforms, Deposits, Checking, Savings, CDs, MoneyAisle

image CD laddering is a great way to increase yield without sacrificing liquidity. Sophisticated savers have used the strategy, often at the suggestion of personal or private bankers. It’s not rocket science, but it takes a bit more planning.

It’s a trivial bit of logic to program a ladder tool into a computer or website, so it’s surprising that it’s rarely featured on banking sites (note 1). That may be because most financial institutions have dozens of product lines to nurture, and it’s difficult to justify the resources for speciality features.

That’s just the kind of thinking that creates market opportunities for startups like MoneyAisle from neoSaej. The Boston-area company, which made its public debut at Finovate 2008 (demo video here), is totally focused on deposits and can justify the investment in advanced features. In fact, their livelihood depends on it.

So it makes sense they’d be first to market with an automated CD-laddering tool. But what makes it especially impressive is that MoneyAisle users can run up to 30 simultaneous auctions placing funds in up to 30 different financial institutions (see note 2).  

In our test of a relatively simple, but typical, four-rung ladder (see below), four different financial institutions won the bidding:

  • MetLife paying 2.1% for a $25,000 3-month CD
  • First National Bank of Florida paying 2.3% for a $25,000 6-month CD
  • Wainwright Bank paying 2.5% for a $25,000 9-month CD
  • KeySource Commercial Bank paying 2.93% for a $25,000 12-month CD

And by distributing our funds into four different maturities, 3-month, 6-month, 9-month, and 12-month, we were able to increase the yield by 0.36% compared to putting it all into 3-month certificates. And we are still able to withdraw 25% of our funds every 3 months without penalty. To further increase yield, the shorter-term CDs could be reinvested into longer-term CDs at maturity, e.g., each CD could be rolled into one-year CDs at maturity to create a ladder of four 12-month CDs with one maturing every 3 months.

Advanced option: The advanced ladder is designed for users that want to spread their deposits around. The money designated for each CD maturity can be spread to two or three different banks if desired. Users may also choose up to 10 banks they want excluded from the bidding.

Simple CD ladder tool at MoneyAisle (11 Feb. 2009)

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 Results from the above auction: Four $25,000 CDs of varying maturities
(11 Feb. 2009)

image

MoneyAisle’s Advanced laddering tool (11 Feb. 2009)

 image

Notes:
1. Bank of America has a Java-based laddering calculator here as does Citizens Bank (here) and Safe Credit Union (here).

2. The maximum number of simultaneous auctions in the simple ladder program (shown above) is 10.

3. For more information on MoneyAisle and other new lead-gen programs, see our Online Banking Report on Lead Generation and our recent report on Growing Your Deposits Online.

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Online Personal Finance Traffic Soars; Mint Passes One Million Unique Visitors

By Jim Bruene Posted on
Categories: Geezeo, Intuit, LendingTree, Mint, Personal Financial Management, Thrive, Wesabe

imageJanuary 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.  image
  • 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. 
  • image 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 imageestimated 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

  Jan 2009 Dec 2008 Jan 2008 YOY Chg
Mint 1.1 mil 890,000 200,000 5.2x
Geezeo 220,000 170,000 18,000 12x
Yodlee 120,000 100,000 84,000 44%
Finicity/Mvelopes 100,000 71,000 91,000 10%
Wesabe 89,000 140,000 56,000 60%
BudgetTracker 27,000 14,000 15,000 86%
Buxfer 22,000 15,000 13,000 78%
PearBudget 12,000 7,600 4,200 3x
ClearCheckbook
BudgetPulse		 11,000
8,200		 9,100
4,300		 4,600
2,200		 2.3x
3.6x
Total 1.7 mil 1.4 mil 490,000 4.5x

Table 2: Traffic at the online PFM class of 2008

  Jan 2009 Dec 2008 Month Chg
Quicken Online 150,000 53,0
00		 1.8x
PNC Virtual Wallet 41,000 45,000 (9%)
Rudder 39,000 61,000 (35%)
Thrive 21,000 14,000 52%
Scred 2,600 630 4x
Expensr 2,500 3,700 (32%)
RateSurfer 2,100 3,600 (41%)
Expensify 1,400 600 2.5x
Banzai 1,300 1,500 (15%)
GreenSherpa 400 ina —
iThryv 210 2,100 (90%)
Total 260,000 185,000 41%

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.

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UK’s MoBank Could be the First of a New Wave of Banking & Payments Companies Optimized for Mobile Delivery

By Jim Bruene Posted on
Categories: Launches, MoBank, Mobile Banking, Mobile Commerce, Mobile Payments

imageMoBank, the U.K.-based mobile banking and payments said to be launching this month, is creating some buzz on the other side of the Atlantic (stories here, here, and here).  Given the pedigree of its two founders, Steve Townsend and Dominic Keen, who blazed many online banking trails at Egg and First Direct, it should provide a glimpse of the future of mobile finance.

The company is establishing a call center on the Isle of Man, run by Steph Gregg, a veteran of Egg, First Direct and Vodafone. Melanie Hunter is head of marketing, and David Rubin is head of mcommerce.

The company was named to Red Herring’s top-100 global start-up list last month (here) along with FinovateStartup alum ClairMail (demo video here).

It appears at launch the service will support bill payment and certain mcommerce activities, such as purchasing movie tickets. An iPhone app is expected at launch. Users will register their credit/debit card(s) with the service. The company plans to expand into mobile banking and money-management activities in the future. 

The company has raised more than $1 million according to news reports. The company was founded in 2006 and presented at The Essential Web conference in June 2007
(p. 43, here) and had four employees at that time.

Here’s how the company described itself 18 months ago:

MoBank is creating the world’s first mobile-led online bank. The company believes that, for some sections of the population, small screen devices will become the channel of choice for most banking and payment services. moBank’s business model is based on providing a free-to-use basic banking service with paid-for add-on features. Furthermore, moBank’s users are enabled to participate in a range of unique, value-generating m-retail activities.

What’s innovative: It sounds like a mobile-based account aggregation and bill-pay service, similar to Mint on the iPhone. But it could also contract directly with one or more banks like SmartyPig has (previous coverage). But as ING Direct proved, optimizing on a new delivery channel can pay off with great word of mouth and positive press.

MoBank pre-launch homepage (6 Feb. 2009)

image

Note: For more info on the growing market, see our Online Banking Report on Mobile Banking.

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