The Simple Finance Game or “Hiding PFM in Plain Sight”

image I’ve written thousands and thousands of words about personal finance management (PFM) including seven deep dives in our Online Banking Report (see note 1) and 130 131 blog posts. However, I’ve never articulated the behavioral aspects as well as NY Times software developer Andre Behrens who pens the occasional post at NYTimes.com.

In his Tuesday article, Gamification Done Right, he uses (Bank) Simple as an example of a great use of game mechanics:

Simple.com is the most beautiful bank site I’ve ever seen…but aesthetics are just a baseline. Because what Simple actually wants to do is get you to play a game. The game is called “Master Your Finances”….

HPFM lite: Bank Simple safe-to-spend balancee then describes a key part of this game, which Netbanker readers will recognize as Simple’s Safe-to-Spend balance:

If there’s one number you’re guaranteed to see on a bank site, it’s your balance…I take this number for granted…what other number could there be? But once you start playing the Simple Game, you realize this is a number that matters to the bank much more than it matters to you. What you care about is how much money you can use right now.

He goes on to write about how Simple encourages users to keep savings in unique buckets associated with goals:

…saving has always felt to me like denying myself fun spending opportunities. In the Simple Game, the opposite has proven true. Because every goal has a name and a committed plan, and because the transactions are presented in small increments, saving has become an anticipatory pleasure.

Bottom line: Read the whole article. It may help reinvigorate your efforts to infuse basic PFM concepts directly into everyday online/mobile banking. Every customer should be able to reach the first level of the finance game simply by logging in. How do you take it to the next level? That sounds like the makings of post #132, 133, 134 …..

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Note:
The OBR PFM library consists of three reports penned a decade ago on account aggregation, the PFM enabling technology pioneered primarily by Yodlee. Then four reports in the modern PFM era looking at features, benefits and bundles (subscription required):
— June 2012: PFM 4.0 here
— May 2010: PFM 3.0 here
— June 2007: Social Personal Finance here
— Aug 2006: Personal Finance Features for Online Banking here
— July 2003: Account Aggregation 3.0 here
— Aug 2000: Account Aggregation 2.0 here
— Oct 1999: Account Aggregation

Should You Install Mint@Yourbank?

image Yesterday, Intuit announced a Mint-branded PFM that banks can install within their secure online banking sites (press release). Several pilots are beginning shortly, but widespread availability is expected towards year-end.

The service will contain similar functionality as Mint offers directly today. However, FI end users will not see third-party offers, unless the bank decides to run them. See the mockup below for what Mint will look like running within a retail bank.

Many of Intuit’s 1,100 online banking clients (500 of which use Intuit’s FinanceWorks PFM) will jump at the chance to integrate Mint. Non-customers will be considerably more wary. See the pros and cons below. 

I was briefed by Intuit’s Mint folks Tuesday, so I’ve had 36 hours to ponder the implications (see note 1). As Aite’s Ron Shevlin blogged yesterday, the move comes as no surprise to anyone. But now that the moment has arrived, banks and credit unions must decide if they want to cede PFM branding over to Mint. There is no right answer, but here are a few pros and cons to ponder: ________________________________________________________________________________
Pros:

  • Mint is THE brand name in PFM. In fact, it’s probably the best known name in all of personal finance, not counting big financial institutions and payment brands. When I tell friends and family what we do at Finovate, I usually get blank stares until I say that we have companies like Mint on stage demoing their new products. Then they get it; everyone seems to have heard of Mint. So it will be easier to educate the market by simply saying, “we offer Mint built right in to your online banking.”
  • Current Mint users can import their history and aggregated accounts right into your bank’s secure site with the click of the button. With 12 million registered users (note 1), that means that about 10% of your customers base has already set up an account there and could be off and running MUCH faster than using your home-grown service.
  • Tax integration: While some may view this as a con, the links between Mint and sister product TurboTax, provide a nice solution for banks to push during tax season. 
  • Attractive UI: While the other players (notably Money Desktop) have caught up, if not surpassed, Mint on the UI front, it still provides a UI that is head and shoulders above the typical banking site.
  • Early mover advantage: If you are the first in your market with Mint integration, it could provide a meaningful competitive advantage while you have that space to yourself. And the advantage could remain if you are thought of as “that bank with Mint” for the next few years.
  • Jump-start mobile money management: Few banks have anything beyond basic balance/transaction info in mobile banking. Whereas Mint is now acquiring almost half its customers in the mobile channel.
  • Your customers already use it: A typical bank has 10% of its customer base registered with Mint (though the active user base is much smaller). Those customers are being served competing offers whenever they login to Mint.com. Those offers are replaced with your marketing messages when using Mint@YourBank

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Cons:

  • It’s an added expense, potentially a significant one: Intuit declined to get into specifics of the cost, but they said there are per user per month charges. If I were Intuit, I’d start the costs low, and raise it aggressively over time as customers were locked into the platform.
  • Control goes to Intuit: Right now, financial institutions are in the drivers seat. Mint is popular and growing, but it’s unlikely to achieve true mass-market status without better integration into financial institutions. And if it becomes the industry standard, then banks may have less power in future negotiations.
  • Brand confusion: Adding another brand to the mix (i.e., one that competes with your FI brand) is always a tough call. And if other banks offer the same Mint-branded PFM, have you lost the potential for competitive advantage? Furthermore, does driving your customer into Mint actually make you more vulnerable if Intuit or someone else releases a “conversion kit” to move all your account to Mint.com or another bank’s Mint service. And will customers even bother to move from Mint.com to Mint@Yourbank?  

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Bottom line: It’s a great move for Intuit. They extend their distribution, potentially dramatically, and better monetize Mint (note 2). And it gives Intuit a platform to develop additional services to sell to client banks. 

Should financial institutions jump on board? Assuming you can overlook control issues, it will boil down to the usual outsourcing issues (cost, support, integration, etc.). So, if Mint@YourBank looks economically feasible, it’s worth putting on your short list. The automatic conversion from Mint.com is a huge benefit. The known brand should make customer/employee education easier. And if you move fast, you can leverage the Mint brand to position yourself as the “personal finance” leader in your market.

But if you want to control your own destiny, avoid conflicting branding, and potentially lower costs (note 3), you may be happier with other solutions. 

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In this Intuit-provided mockup, Mint appear on main navigation and in two primary sections within online banking (3 April 2013)

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Clicking “Mint” on main nav bar leads to this familiar spending screen

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Secondary navigation leads to all the usual Mint functionality, for instance “Budgets” shown here

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Notes:
1. For me, Mint has come full circle. I still remember nervous Mint founder, Aaron Patzer, at our first Finovate in 2007 (demo video). He was riding high after his win at the inaugural TechCrunch40 (now Disrupt) two weeks earlier, but he was afraid he’d be caste out by the banking audience he was attempting to disrupt. His fears proved unfounded as the audience voted Mint Best of Show. Now, his former company is making a bold bet that those very banks will now promote the Mint brand to their customers. 
2. According to an estimate by Steven D Jones at Dow Jones (no relation I presume), Mint brought in less than $3 million during Intuit’s fiscal second quarter. However, that does not include substantial cross sales of TurboTax and QuickBooks, which together are a $4 billion annual business.  
3. I’m making the assumption that as the premium name in the business, Mint will eventually cost more than other solutions. That may or may not happen, as Intuit is large enough to subsidize the service for at long as it sees fit.
4. Intuit will be demoing at FinovateSpring in May.
5. For more on balance forecasting and other advanced PFM features, see our Online Banking Report: PFM 4.0 (June 2012; subscription).

Lemon’s Premium Digital Wallet Carries Monthly Fee

image I’ve spent a fair amount of time playing with digital wallets during the past few weeks. The one with the most traction, at least measured by download activity, is the Lemon Wallet which has been a top-20 free finance app for some time.

While it’s free, does cool tricks with the mobile camera, and is seemingly liked by users, it’s not a transactive service just yet. Basically, using the mobile camera as a scanner, it digitizes all the bank cards, loyalty cards, IDs and various detritus we haul around on our person or stuff into the back of a desk drawer.

Right now, there aren’t many places willing to accept a copy of your card stored on your smartphone. But if you need your healthcare plan number, driver’s license number, or any of your card numbers, they are all stored in a handy location (you could do the same thing with the iPhone’s notepad too).

Obviously, Lemon has bigger plans than simply being a card-number archive. You don’t score $8 million in venture capital unless you have a path towards a $75+ mil valuation.

The startup’s first step towards revenue generation is its $4.99 per month (or $39.99 annually) premium option. For that, users get a bundle of benefits including:

  • Card transaction scanning powered by BillGuard,
    which downloads transactions to monitor up to 10 cards
    (1 account can be tracked in the free version)
  • Lost wallet service (aka credit card registration) so that if you lose your physical wallet, Lemon will handle getting all your cards replaced
  • Extra password for more security
  • Transaction sharing
  • Export data to CSV (Excel), Evernote, Dropbox or Concur

My take: For power users, the BillGuard integration makes Lemon premium worth the $3.33.mo on an annual plan. One mistaken charge discovered every year covers the cost. But account aggregation is not something consumers are used to paying for, so by simply providing fee-based PFM services, it will take time to get meaningful revenues.

But with a solid base of cards aggregated onto the platform, Lemon can leverage the info in many ways. And as mobile proximity payments become technically feasible, the company is in a good position to be one of the major wallet players (or be acquired by one).

Email upsell for the Lemon premium option (5 Feb 2013)

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Movenbank Provides a Peek at its User Interface

imageTech startups help define the future in many traditional industries. Amazon in books, Expedia in travel, Tesla in automobiles.

But there’s been less disruption in retail banking than most industries, especially in the U.S. We saw ING Direct take some share in savings accounts, but not enough to really shake up the status quo. 

But we have some new players looking to change that and Movenbank is one of the most interesting. The Brett King-founded startup, armed with $2.4 mil in seed funding, is beginning to release more details as it prepares for its launch at our FinovateEurope event in two weeks.

In an email to customers today, the startup provided a few peeks at its Geezeo-powered PFM interface (screenshot below):

  • MoneyPulse: A snapshot of the your current financial situation with green/yellow/red dial so you know in a glance if there are problems.
  • Movenbank MasterCard PayPass sticker MoneyPath: More of a typical budgeting piece.  
  • Account aggregation: Beta users can already add accounts from several-hundred banks and credit unions; so unlike Simple, it appears Movenbank is supporting account aggregation out of the box
  • Spend | Save | Live: Primary navigation across the top of the dashboard

In addition, the "how it works" section shows a MasterCard PayPass sticker used for contactless payments (inset).

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Movenbank interface (from customer email, 28 Jan 2013)
Note: "Spend | Save | Live" navigation across top.
This appears to be a PC user interface, but it could be a tablet UI.

Movenbank user interface w PFM features

PFMs Are Top Browser “Money” Plugins for Google Chrome

image While they are overshadowed by the hundreds of thousands of mobile apps, there is a growing eco-system of plugins and apps for use with desktop browsers. I recently poked around in the Money section of Google’s Chrome Web Store.

Not surprisingly, Google Finance was the most popular with almost 300,000 users. Mint was second at about half that (160,000 users). No one else was close (see table below).

Of the top 11 money plugins, six were PFMs: Mint, Finance 41, CashBase, PocketSmith, Easy Envelope Budget, and Toshl. Four were investing related, and Zillow tracks residential real estate (note 1).

One surprise: There was just one U.S. financial in the store. BofA? Fidelity? PayPal? No, it was Mountain America Credit Union (screenshot below). There were several international financial institutions in the store as well (Maybank, BBVA, Bradesco).

Bottom line: With 700,000 total users across the top-11 apps, this is a niche market so far, and could remain that way. But interestingly, it’s another place where Mint dominates.

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Table: 11 Most Popular Chrome Extension
in the “Money” Category

Name Users Type
1. Google Finance 283,000 Investing
2. Mint 161,000 PFM
3. Zillow 49,000 Real estate
4. Finance 41 41,000 PFM
5. Cash Base 35,000 PFM
6t. Pocketsmith 34,000 PFM
6t. Wikinvest 34,000 Investing
8. WealthLift 28,000 Investing
9. Free Stock Charts 20,000 Investing
10. Easy Envelope Budget 18,000 PFM
11. Toshl 15,000 PFM
TOTAL 710,000

Source: Google, 18 Jan 2013

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Mountain American Credit Union extension for Google Chrome browser (link)
Note: The app currently has 127 users

Mountain American Credit Union extension for Google Chrome browser

PFM Toshl featured in the Google Chrome Web Store (link, 18 Jan 2013)
Third-party PFM Toshl was one of the featured apps in the broader Lifestyle Category. They have about 15,000 users, making it the 10th most popular app in the Money category.

PFM Toshl featured in the Google Chrome Web Store  

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Notes:
1. And Finovate alums are well represented. In addition to Mint, Pocketsmith and Wikinvest, BillGuard, FutureAdvisor, Xero, ImpulseSave and SmartyPig (previous post) have plugins.
2. For our take on PFMs, see our May 2010 Online Banking Report (subscription).

Card Transaction Data is Rich, Who Will Help Users Mine It?

image A few days ago, my wife and I were trying to remember the name of a restaurant where we ate on vacation several years ago.

The answer didn’t really matter, but I shouldn’t have needed to tax my meager memory cells because someone with perfect recall already knows its name, location, and how much was spent. In this case, Bank of America. I used its credit card.

I should be able to hit BofA’s mobile app, type or speak “orlando,” and instantly see the dozen or so charges I’ve made in Central Florida. Even better, I should be able to access the entire paper trail of card charges from that trip and to get a quick refresher of our itinerary four years ago.

Yes, this is the vision of personal financial management and we are slowly getting there. But it’s still a lot of work to manage the data flowing to third-party PFMs. And logging in to yet another program to find a small bit of info can be tedious (see note 1).

Bottom line: We can debate all we want about how many people will use the mythical thing called PFM. But most people want to know something about a past transaction at least once in a while. They shouldn’t have to subscribe to a third-party service find it.

So, listen up, financial institutions. Follow Simple’s lead (and Jwaala which pioneered it five years ago), and make long-term searchable transaction archives a core part of online and mobile banking (notes 2, 3).

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Simple’s natural-language search is an important feature (15 Jan 2013)
Note: Hashtags make subsequent searches even more powerful

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Jwaala search

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Notes:
1. Though, for me, Mint’s QuickView Mac app, has made transaction look-up much faster by doing away with the login.
2. And you can make “transaction search” a profit center. See Google’s business results for ideas.
3. For info on fee-based financial services, see the Online Banking Report (subscription) on fee-based online services (May 2011); paperless banking and online storage (late 2010); and lifetime statement archives (2005).

Making Banking Interesting

image When did banking become boring? Probably when all the gold doubloons and pieces of eight were replaced by paper checks and computer bits.

But it doesn’t have to be this way. Most people have at least a passing interest in where their money is going. Sure, there are some negative issues around money, but the place where you track your spending and savings should at least be engaging. And that’s rarely the case today.

But Bank Simple (and others) are making good progress.

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Simple Innovation #8: Full transaction annotation
with on-the-fly categories

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As the startup continues to push the UI envelope (see note 1), it now lets users annotate transactions with uploaded images or PDF files (for a pic of that tantalizing dinner or the receipt for expense reimbursement), free-form memos, and categories created on the fly (#category like on Twitter).

That allows customers to create a historical record around their purchases. Or as Mechanics Bank’s Bradley Leimer put it:

“I love it. It’s like Pinterest or Instagram in your banking application.”

For a more thorough look at the UI, check out the new video posted on the Simple blog.

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Fully annotated transaction at Simple (19 Dec 2012)

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Notes:
1. See previous seven Simple innovations here.
2. Expensify offers similar photo capture and memo annotation capabilities
3. For more info on Simple and other Truly Virtual Banks, see our Oct 2011 Online Banking Report (subscription). image
For more on balance forecasting and other advanced PFM features, see our recent Online Banking Report: PFM 4.0 (June 2012; subscription).
4. According to Apple iTunes, Simple app downloaders are also “buying” Schwab, PageOnce, and Mint apps.

Launching: MetroMile Launches Mileage-Based Auto Insurance

image One of the dumber things I’ve ever done financially is buy an old two-seat convertible on eBay. Who would have guessed that you just don’t get a chance to drive that thing much in Seattle? But next July, when the sun comes out again, I’ll be very happy to have it.

In the meantime, I have this nasty monthly insurance bill. Really, $60 per month to have the car sit idle in my garage? It’s throwing good money after bad. I should call my agent and turn the insurance off. But what if there’s a sun-break this month or our other car is in the shop? Then I’ll need it.  

From the insurance company’s perspective, they don’t want me calling to activate/deactivate insurance multiple times per year (though they love my current zero-miles-per-winter full-pay status). The subsequent labor and fulfillment cost would wipe out much, if not all, the profitability on my account.

So, I’m the perfect candidate for pay-as-you-go insurance, and I’m happy to see it launch in Oregon, thanks to MetroMile, a VC-backed Bay Area startup (note 1). Hopefully, it will make it’s way north to Seattle very soon.
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How it works
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imageMetroMile charges a smaller fixed monthly fee, then adds a variable charge based on the number of miles driven (with a cap at 150 miles in a day).

To calculate the mileage fee users plug a small device called a Metronome into their on-board diagnostic port (note 2). It measures miles traveled and tracks GPS location to create a rich history of your touring (see inset & screenshot 1, note 3).

Oregon residents can get a lightening-fast quote (screenshots 2 to 5) and complete the app online (screenshot 6). The quote on my convertible came was $29/mo plus 2.3 cents per mile (screenshot 4). This would be an amazing deal for me, cutting my insurance costs by 50% annually (note 4). I would save money every month I drove less than 1,300 miles. 

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Opportunity for financial institutions 
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It’s going to take a massive education process before this new type of insurance becomes popular (assuming state regulators allow it). Show customers that you are innovative and can deliver superior value by introducing them to a financial product that could save them $20 per month for the rest of their lives. And one that delivers a rich history of their car travel (which can eventually be plugged into the bank’s PFM).

You could even package it with other bank products (checking, savings, car loans, etc) to continue to remind customers that you helped save them big time. Even more interesting, would be bundling the insurance with mileage-based auto financing to provide an even bigger incentive to save money by driving fewer miles. 

Right now, in the United States, only Oregon FIs could participate (note 5). But as the product spreads nationwide across multiple providers, it could make a nice, profitable product addition to your web and mobile offerings.  

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1. MetroMile dashboard showing GPS data compiled from tracking device (5 Dec 2012)

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2. MetroMile homepage features 2-minute quote
(5 Dec 2012)
Note: Unlike virtually all insurance quote sites, no contact info is required to find the actual price. And you for one car and one driver, you can fill out the form in as little as 60 seconds, my actual time the third time I tried it.

MetroMile homepage features 2-minute quote (5 Dec 2012)

3. Step 1: Enter primary driver info

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4. Step 2: Enter vehicle info

Step 2: Enter vehicle info

5. Step 3: The final price is delivered in the the third-pane of the application

Step 3: The final price is delivered in the the third-pane of the application

6. Finalize online app with contact info

6. Finalize online app with contact info

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Notes:
1. Hat tip to Pando Daily.
2. The port is available on all cars built since 1996.
3. The device could also be used to measure average speed, but GPS data collection is optional and is not currently used by the company.  
4. I was comparing my current Seattle price to a Portland quote, so that could be a portion of the difference.
5. We don’t know if MetroMile is will pay for referrals at this time.
6. For more on banks offering insurance, see our full report here (Dec 2011, subscription)

Launching: KeyBank’s “myControl Banking” Provides Balance Forecasting via Mobile App & Online Dashboard

imageKeyBank is launching a new online banking and mobile service called myControl Banking. The mobile app became available today in iTunes (link).

The service is centered around myMoney Forecast, a real-time balance forecast shown at the top of the screen (see inset below). It’s a vital PFM function that looks a lot like Simple’s Safe-to-Spend.

But there is one significant difference. Key Bank users can make the forecast more accurate by manually entering Money In or Money Out transactions before they clear the bank (for example, a just-written check, see bottom of first screenshot). The bank automatically nets out any pre-scheduled bill payments, transfers, or ACH items and adds in recurring regular paychecks and transfers in.

Key Bnak mobile myMoney ForecastThe interface also includes a weekly cash flow calendar so users can monitor the flow of their funds. And up to five goals can be established and tracked within the app and/or online dashboard.

The mobile app does not (yet) replace Key Bank’s regular mobile app. Before using MyControl, customers must sign up for it within online banking.

Analysis: The introduction of MyControl Banking is a fantastic move. It delivers the key missing component of online banking, a peek at what’s about to happen with cash flow, without making users slog through a bunch of PFM features they don’t understand.

imageIt provides Key Bank with meaningful differentiation, and gives them a platform to add more PFM content in the future.

Because Key Bank’s MyControl raises the bar in digital delivery, we are giving it our OBR Best of the Web award (note 2). We are also retroactively naming Simple as a co-winner since they commercialized a similar balance forecast earlier this summer.

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Mobile checking & savings balance visualization with integrated transfer button (left) and goals (right)

Key Bank myControl Checking     KeyBank myControl Savings mobile

Key Bank myControl Banking landing page (link, 20 Nov 2012)

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Notes:
1. This post was developed from info available within the app, in the product video at Key.com/mycontrol and in the FAQs. But I don’t have an account at Key Bank, and there is no interactive demo yet, so I haven’t used the service with live data.
2. Since 1997, our Online Banking Report has periodically given OBR Best of the Web awards to companies that pioneer new online- or mobile-banking features. It is not an endorsement of the company or product, just recognition for what we believe is an important industry development. In total, 88 companies have won the award. This is the first for Key Bank and Simple. Recent winners are profiled in the Netbanker archives.
3. For more on balance forecasting and other advanced PFM features, see our recent Online Banking Report: PFM 4.0 (June 2012; subscription).