The Tablet Will Act as a Catalyst to the Redesign of Online Banking

The Tablet Will Act as a Catalyst to the Redesign of Online Banking
I’ve been thinking about this for some time and wrote about it in a report I published this past June. It’s already starting to materialize. This week, Citi unveiled it’s new website, and it’s modeled after the mobile and tablet experience. To get a feel for the changes, have a look at the video Citi has on its preview site. I was out at the Bank Systems & Technology Executive Summit this week and had the opportunity to chat with a Citi executive about some of the changes. No doubt it’s a step in the right direction. I’m curious to hear what consumers think about the changes and the redesign. I’m also very intrigued regarding how adoption of PFM will materialize (see my blog post, Is PFM The Future of Online Banking? and my recent report, Personal Financial Management: The Devil Is in the Details). American Banker is reporting that Citi engaged Yodlee for the aggregation and PFM components of the site. Citi isn’t the only large bank up to major changes with their online banking solutions. Stay tuned for some upcoming changes at Bank of America. BofA is claiming that the outage they suffered this week was due to a “multi-year project to upgrade its online banking platform.”

Is PFM The Future of Online Banking?

Is PFM The Future of Online Banking?
You will have to read my new report to find out the full answer. Although PFM solutions have been in existence for several years, adoption is pitiful. To give you an idea, only 3.8% of users across large banks and software vendors have been active in the last 30 days. It’s a horrific statistic, and it’s no wonder so many financial institutions are reluctant to move into the PFM realm. Here are a few examples of why adoption is so shoddy:
  • Poor overall online banking user experience and customization capabilities. See this post for more info and examples
  • Assuming PFM can serve the mass market (e.g. not everyone wants to or needs to budget. What a wealthy person needs or is willing to do online is not the same as what someone in debt requires or is willing to do).
  • Poor auto categorization accuracy
  • Lack of relevant and targeted user education
  • The list goes on and on



The good news is that adoption is expected to climb. The report has all kinds of forecasts that provide insight as to where PFM is headed. It also delves into qualitative details as to what is required by financial institutions in order to make PFM viable. There’s also a whole discussion about tablets and their role and potential in online banking and PFM.

Truth in numbers? “Registered users” is a crock

Truth in numbers? “Registered users” is a crock
This morning, TechCrunch published an article titled, With Top Banks In Tow, Financial Service Provider Yodlee Hits 30 Million Users. Here are the stats: – Mint.com has 5 million registered users – Yodlee has 30 million registered users Both figures are impressive, so congrats to the vendors. However, as an analyst, I don’t care too much about registered users. I want to know of the total number of registered users, what percent are ACTIVE. The definition of active matters as well. It’s great that people are interested enough to register, the bigger question is whether or not they are engaged enough to return. I first blogged about this when Mint.com was acquired.

Fiserv and CashEdge Prepare to Step into the Ring

Fiserv and CashEdge Prepare to Step into the Ring
It’s been a really busy week on the M&A front – S1/Fundtech, Intuit/Mobile Money Ventures, and now Fiserv/Cashedge. Yesterday, Fiserv announced that it has agreed to acquire CashEdge. It’s a strategic move on the part of Fiserv and I can think of numerous reasons for the acquisition. Let’s explore a few of the areas:
  • P2P Payments. Fiserv has a ZashPay, CashEdge has Popmoney. Why does Fiserv need two separate solutions? Well, there is lots of activity taking place in the online banking space with regards to P2P. The recent announcement of ClearXchange (a joint venture of Bank of America, Wells Fargo, and JPMorgan Chase) has raised a lot of eyebrows and everyone is wondering whether this is the P2P payments silver bullet. Can a joint ZashPay/Popmoney solution take on the likes of ClearXchange? Should it take on ClearXChange or attempt to be part of it? This is still a murky area as there are lots of unknowns, but I would love to hear your thoughts.
  • Account Aggregation, Online Banking, PFM. There are 3 main account aggregation players – Yodlee, Intuit, and CashEdge. Fiserv’s acquisition of CashEdge now allows them to offer account aggregation and tie it into their Voyager online banking solutions. No doubt this is also a major stab at rival Intuit and their online banking and account aggregation endeavours. CashEdge is also an Intuit partner, and this now opens up doors for Fiserv to step in and attempt to woo Intuit online banking customers. It’s also a stab at Jack Henry, as CashEdge is the aggregation provider for their PFM solution. It could also be a stab at firms like ClairMail, another CashEdge partner. Will Fiserv box out Intuit, Jack Henry, and ClairMail customers with this acquisition? Things could get mighty sticky as competition is clearly heating up.
  • Small Business Payments. This is a fast growing area, and one that is changing rapidly as banks and vendors attempt to simplify the online banking money movement process. Every online banking provider needs to work on this area. For more info, see my small business online banking vendor evaluation report.




This is clearly a strategic and competitive move on Fiserv’s part. I believe it holds a lot of potential, it will all come down to execution and how the joint entity will work with its banking clients and prospects. I’d love to hear your thoughts.

BMO Adds “Compare your Spending” to MoneyLogic PFM

BMO Adds “Compare your Spending” to MoneyLogic PFM
There has been some serious PFM activity taking place in the Canadian market. – May 31, 2010: RBC announces its myFinanceTracker solution (see blog entry here) – Dec 3, 2010: Mint.com officially launches in Canada – January 31, 2011: BMO announces MoneyLogic Given that there are only a handful of major financial institutions in Canada, it’s only a matter of time before the others ante up. Additionally, these competitive activities foster innovation and the expansion of feature sets. Lo and behold these feature sets continue to grow as BMO has rolled out a compare your spending tool. Those of you that have spoken to me about PFM know that I don’t rank community features very high up on my PFM and online banking prioritization list (see Bundle.com Requires a Better Bundle). However, it’s great to see a large financial institution embrace the concept of community and open up the data coffers with the intention of providing insightful information. The social features are a draw for consumers because it’s always interesting to know how you stack up. There are a couple of caveats to keep in mind with regards to social and community features:
  • Consumers shouldn’t make financial and budgeting decisions based on the actions of others. I don’t believe that folks should model their spending habits according to others for one simple reason – most people don’t have good spending or budgeting habits. Everyone needs their own custom-made plan and the good news is that banks are in a position to help consumers build this plan.
  • Adoption is critical. The quality of the information displayed by a comparison tool will depend on multiple factors and one of these factors is critical – adoption. In order for relevant info to be displayed folks have to use the tool. The more data points thrown into the pie the better.



BMO is in a position to take advantage of this tool. They have an entry point to provide financial education to their clients. However they have to ensure that it is properly positioned and pitched within online banking and other channels. Additionally, BMO is large enough that with decent adoption of MoneyLogic, they can collect enough data points and provide relevant info to their customers.

Stay tuned for an upcoming report on PFM that will have a section in it that addresses social and community features.

Payoff.com – more noise in the crowded PFM market?

Payoff.com – more noise in the crowded PFM market?
I came across the following article yesterday about Payoff.com, a new fintech startup that, “turns financial planning into a game.” The blending of savings goals, badges, and social features piqued my interests and I headed over to take a look. The intro video explaining the solution is really slick and does a good job at explaining the service. Once inside however, things get a tad confusing and I can’t say that I get the value of the badges or the provided social features. First off – is it secure to provide my banking credentials to this site ? I think the Rudder and Blippy mishaps have taught us enough about this. This startup doesn’t have the bank-level security that would be required for a PFM solution (and I’m not referring to account aggregation here). Long time readers of this blog know that I believe PFM belongs at a bank for numerous reasons. I think savings goals are great. SmartyPig still has the best implementation of this in my opinion, the higher interest rate coupled with the retailer bonuses are very compelling. At Payoff you earn badges for your goals and there are “Sur-Prizes” that can be won as you earn more badges. Personally, I don’t get the added value of the badges when it comes to savings goals. That is unless you are taking part here in order to play a game. To me, this site looks as if it is geared towards a younger audience. Is financial planning a game? Certainly not. Can it be fun? Absolutely, but there has to be some knowledge transfer and education involved. Firms that will be successful in the PFM space have to find simple ways of providing financial education to their customers. This is especially important for younger users as they are at a stage in their lives where financial literacy is crucial.

BAI Retail Delivery 2010 Roundup

BAI Retail Delivery 2010 Roundup
The BAI Retail Delivery conference is just coming to a close, and I attended along with the my colleagues in the Celent banking team. Attendance definitely appeared to be up over last year. The 2009 event was depressing from an attendance perspective, and I was happy to see the ramp up. The Las Vegas venue is certainly a draw, but based on conversations, there also seems to be more flexibility over last year with regards to travel budgets. With that said, the keynote sessions had tons of empty seats, indicating that either the “Vegas effect” is in play, and/or that there is still plenty of room for attendance to grow. I spent most of my time at the event in productive meetings with clients and prospects. I gathered a ton of information for research. A few key trends emerged from the conference, none of them are all that surprising. They do however point to what folks are thinking about and prioritizing for 2011.
  • Alternative revenue sources. There is lots of scrambling going on given regulatory shifts and the need to grow revenues in the retail banking sector. Many of my discussions were about how banks can grow using the online and mobile channels. There were lots of questions regarding merchant funded rewards and how they can be integrated into online banking using vendors like Cardlytics or BillShrink.
  • Analytics. This is a subject that everyone always seems to be talking about but isn’t doing all that much with. Banks are sitting on tons of data, sitting being the key word. A number of discussions centered around how to leverage this data to build more complete customer views and cross-sell other products.
  • Online banking platform upgrades and PFM. This is now trickling down to the retail front, following a ton of activity in the corporate banking space. Banks are realizing that their online banking offerings are stale, and don’t provide the experience that customers are looking for. This will be a slow moving boat, but the exploration phase has certainly started. Much of this is being fueled by interest in PFM and the desire to integrate it with online banking.
  • Mobile initiatives. Mobile is still a raging topic and was the focus of many discussions. A few key questions came up. Are mobile devices replacing the PC? What role do tablets play? Both these questions were also tied to the biggest dilemma – should I prioritize investment in the mobile channel, online channel, or both? My colleague Red Gillen will address these questions in more detail in a blog entry next week.



A couple of things surprised me:

  • Lack of emphasis on social media. This has been a huge topic lately, and I found that the conference had little emphasis on this. Yes, the founder of Twitter was a keynote speaker, and there were other sessions on this topic, but I didn’t find that banks at the event had that many questions here. Many banks are still clueless when it comes to social media. I actually had one banker tell me that he doesn’t believe that social media will affect his customers. There is obviously a lot of learning for banks to do here in order to grow into the shifts that have already taken place in the online world.
  • Limited concerns and discussions about online banking security and threats. All kinds of fraud has hit the business banking sector this past year. There is a lot that banks can learn from this, and additional safeguards need to be put into place for consumers.



For some further reading, Jim Bruene at NetBanker has compiled his Best of BAI Retail Delivery 2010.

I welcome all comments and thoughts. I also encourage those of you who were in attendance to share your experiences.

RBC Launches myFinanceTracker PFM. Strong Start or False Start?

RBC Launches myFinanceTracker PFM. Strong Start or False Start?
I am always excited when a bank launches an innovative product. RBC (in Canada) recently announced the launch of myFinanceTracker. RBC is “using the services of a California-based online financial solutions company” to offer the solution. To my knowledge, RBC is the first Canadian bank to offer PFM. It is a great move on their part and testament to where the online banking market is headed. RBC has, however, committed a false start by deciding not to include account aggregation capabilities in the launch (see “Can I View All of My Accounts Simultaneously in myFinanceTracker?“). Potentially interested customers who try the service will be frustrated by this. Many of them have multiple accounts (including cards) at a variety of institutions, and the ability to view their complete financial picture is a must. Once an online user is turned off, it will be very difficult to turn them back on, even if/when account aggregation is introduced. Throw in a few potential competitors (non-banks, or other Canadian banks that follow suit), and the ability to capture the customer’s PFM needs and precious customer data may be lost. I will be exploring the role of PFM in online banking in an upcoming Celent report – stay tuned!

Bundle.com Requires a Better Bundle

Bundle.com Requires a Better Bundle
Back in late September 2009, rumors were flying regarding a Citi and Microsoft venture in the personal financial management (PFM) space. It garnered a lot of attention, particularly due to Microsoft’s decision to exit Microsoft Money online. Folks were very curious, myself included, as to what these two heavyweights would conjure up. The rumors were true, and late last month, Bundle.com was launched. Citi, Microsoft, and Morningstar are investors in the new venture. Jaidev Shergill, formerly of Citi Ventures, is the CEO. I visited the site with the expectation of finding a potential contender in the PFM space. Instead I found a site that provided a very limited view into personal financial management. The site allows users to compare their spending habits with others around them or in other areas. There is also a community where users can interact with one another and discuss personal finance. I like the ideas of spending comparisons but this is not a new feature. It has been offered by Mint.com, Wesabe, and Geezeo for some time – all offer various flavours of community and social interaction. I see spending comparisons as a nice to have, not an absolute requirement (see my blog entry on this). I don’t believe that folks should model their spending habits according to others for one simple reason – most people don’t have good spending or budgeting habits. Everyone needs their own custom-made plan. Bundle.com is going to need to add a lot more to its portfolio in order to attract users and keep them coming back. Bundle is still in beta, and it will be interesting to see what else they add to the pot. I am also curious to see if Citi will begin to integrate any of the features into their own offerings.

2010-02-16_1208

Rumor Mill: Intuit to Acquire Mint.com for $170 Million

Rumor Mill: Intuit to Acquire Mint.com for $170 Million
An interesting post on TechCrunch caught my eye this morning. They are reporting that Intuit is a few days away from announcing the acquisition of Mint.com. The deal is valued at an estimated $170 million. It is certainly a great feat for Mint.com, and outspoken CEO Aaron Patzer. At the 2008 Celent Innovation & Insight Day, I had the pleasure of having Aaron sit on a panel I was moderating on Web 2.0 (see the following summary in Bank Systems & Technology). What are the ramifications of this deal? It’s a bit of a bizarre acquisition since Digital Insight (an Intuit company) already has a PFM product called FinanceWorks that they are offering to financial institutions, as well as Quicken Online which is a consumer-direct product. There is however no doubt that Intuit is all-in when it comes to PFM. They clearly want to control the market as Mint claims well over 1 million users and Quicken has been quick to boast that it is not far behind. It’s also the final jab at the already dead Microsoft Money. How Intuit will add Mint.com to this product suite remains to be seen, but is certainly not immediately apparent. There are a few challenges with this acquisition:
  • There is a big difference between number of users and number of ACTIVE users. Total number of users is a meaningless figure. Anyone can sign up for an account, try the service, leave, and never come back. The number of active users is not a publicly available figure and they are the ones that really matter here. Intuit will obviously acquire Mint’s user base as part of this deal and it would be useful to know more precise figures regarding active users.
  • Mint’s business model is questionable. Mint has always been clear that they believe consumers should take care of PFM with them instead of with a bank. While they have been successful at growing their user base, it’s unclear if they have actually been able to generate revenue. They started off with a model based on referrals and suggestions (e.g. suggest a new credit card that may be better than the one you currently have). In May announced that they “may begin to sell anonymous consumer data” (see my blog entry, The Risks of PFM Revealed), a practice I am very much against.

I would also like to point out that this could be good news for banks who are looking at their PFM options. A combined Mint/FinanceWorks solution offered to financial institutions could prove to be a compelling option. This could be particularly appealing to midsize to large banks who want to work with an experienced vendor like Digital Insight / Intuit.
UPDATE 11:43am. Intuit confirms Mint.com acquisition