I’ve had a week or so to reflect on Finovate Startup 09, as have a number of others, so here’s a few more general thoughts on the state of play in the one particular area of the world of finance 2.0 that interests me the most…
The PFM (Personal Financial Management) space is probably the hot-bed of online financial services innovation at the moment, and there were a number of attention-grabbing developments announced at Finovate. Whilst Mint’s game-play caused a predictable buzz, Wesabe’s white-labelling proposition was the big news. Aaron Patzer, Mint’s CEO, is on record as not being interested in white-labelling his kit to financial institutions (having turned down a few requests already), so Wesabe’s move gives them serious differentiation from their rival. If a few of the big-name institutions decide to back them with white label deals, Wesabe could build up some serious user numbers/ market share. Given a fair wind, this could be a turning point for Wesabe, but they’ll need to become far more aggressive at rolling out innovative new features than they have in the past if they are to win the war.
There’s still plenty of room for someone to come from the back and own the PFM market, and there are signs that some of the newcomers have the wherewithall to do just that. I’ve long bemoaned the fact that the current crop of PFMs concentrate far too heavily on looking in the rear-view mirror at past spending habits, but a couple of start-ups are now starting to extend the scope of the PFMs into ‘proper’ forward-looking financial planning. SimpliFi and Green Sherpa are two such companies, although they take radically different approaches to the problem; SimpliFi is more a digital replacement for your financial adviser, whereas Green Sherpa has an accountancy feel to it’s shorter term cashflow planning tool. Both companies have interesting propositions, but Green Sherpa has an ace up it’s sleeve in it’s proprietory data aggregation technology, which may get spun off into a Yodlee-rivalling product in it’s own right, according to CEO Erin Lozano.
The one thing that really strikes me about the PFM space is just how fragmented it is. Each of the players is engaged in an arms race to roll out ever-more new features accompanied by sexy web 2.0 UIs (ajax, Adobe Air, Silverlight etc.), but there isn’t actually one particular offering that stands out as catering to all of my needs. Instead, I’d have to use at least three different tools to achieve everything I’d like (probably more like five), and of course no-one wants to share their data, so the onus is back on me to sort it all out! There has to be some consolidation in the not-too-distant future, but I fear that even this might not be enough to prevent this latest generation of PFMs going the same way as the pioneers (Microsft Money and Quicken).
Funnily enough, one potential answer to the problem also made an appearance at Finovate, but as a next-gen online banking solution. Although Jwaala presented a similar proposition, it was iThryv’s ultra-flexible online banking platform that really caught my eye, and got me thinking about where the PFMs should be heading!
My current PFM dream-team would consist of…
- Mint’s data aggregation tools and UI,
- BillShrink’s short-term money-saving tools,
- Centrro’s credit scoring-based pre-screeners for lending deals (although I’d want Credit Karma’s what-if scenario planner mixed in there too),
- DebtGoal’s tools for getting me out of that debt quicker(!),
- SmartHippo’s open-source product listings and user community features,
- Green Sherpa’s cashflow approach,
- SimpliFi’s planning focus,
- KaChing’s investment tools,
- Cooler’s, erm, coolness with a trendy green twist,
…and I’d want all of these presented as widgets within a planning platform as clever as iThryv’s, plus an accompanying iPhone app! What price on there being a next-gen widget-based planning platform with everything I desire available by the next Finovate Startup?
For the record, the 300+ delegates at Finovate Startup 09 voted these four companies best-of-show:
- Billshrink
- Prosper
- Silvertail Systems
- SimpliFi
I’m pleased to see at least two of my choices made it onto the list!
Finally, a special thankyou to Jim Bruene and Eric Mattson of Netbanker for organising a very professional conference, and also for my “amazing stamina” mention in despatches; very flattering!
Related posts:
Hey, Mike,
You write, “[Wesabe will] need to become far more aggressive at rolling out innovative new features than they have in the past if they are to win the war.” Huh? There are definitely things we need to do, but being more innovative isn’t our problem.
- We launched the first of any of the sites in our space in November, 2006. That initial launch included goal planning tools such as those you like in SimpliFi and our own data aggregation tools such as those you like in Green Sherpa.
- We created the only aggregation system that allows people to keep their financial institution credentials on their own machines, which continues to win us users every day.
- We launched the first Firefox extension, Vista sidebar gadget, Mac dashboard widget, and so on.
- We launched the first public web services API, which has allowed us to build a network effect for the value of our service, and has led directly to our Springboard model (announced at Finovate).
- We created our Tips tab, which though I think needs a 2.0 version to really take off, nonetheless created a whole new area of personal finance recommendation systems.
- We launched Wesabe Cutback, which automatically identifies budget expenses people can cut back on, and which American Banker called “brilliant in its simplicity.”
And on and on and on. I don’t think your criticism is on point. There are certainly other knocks on Wesabe I would have to acknowledge, but we are pretty clearly on record as leading a huge amount of innovation in our space.
By the way, I believe we’re one of only six companies to win two Online Banking Report (OBR) awards — the awards Jim Breune, chair of Finovate, gives out in his newsletter for innovation. (The other five were Bank of America, Citibank, E*Trade, Everbank, and Wells Fargo.) I’m biased, certainly, but I’m not the only one who thinks we’re innovative.
Best,
Marc Hedlund, CEO, Wesabe
Hi Marc
Thanks for visiting Fincision and taking the time to comment; much appreciated. You’ve provided quite a robust reply to my views on Wesabe, but perhaps you have mis-interpreted me in the first place!
When I asserted that Wesable would “need to become far more aggressive at rolling out innovative new features”, I wasn’t knocking your past history (nice summary, by the way). My concerns were more about Wesabe’s ability to keep up with the other PFMs, and also about enforcing a perception of being the market leader; this is about sustained innovation and savvy marketing/PR.
For instance, Wesabe lagged behind the competition in getting an iPhone app to market and, on the day you rolled out the new UI and Springboard platform messages, which should’ve been huge in PR terms, Techcrunch & Lifehacker chose to run with the ‘me-too’ iPhone app story and Mashable didn’t bother at all (although Mint got coverage of it’s Financial Fitness tool).
As an aside, I’m afraid that you’ve been a little disingenious in comparing Wesabe’s goal planning capability with that of SimpliFi’s, but I take your point on the data aggregation capability (I hadn’t realised that you managed to keep sign-in credentials in the desktop; that’s very neat).
I hope that I’m wrong, and that Wesabe can prevail, as the PFM space really does need the competition; certainly the Springboard proposition is a big step in the right direction (although Geezeo appears to have similar thoughts). Having said that, Wesabe has a lot of work to do in order to avoid descriptions like this (courtesy of Lifehacker) from sticking: “The popular personal finance app that isn’t Mint”.
Hi Mike-
I enjoyed your analysis of the PFM space and the breakdown of your wish list of tools/services you would like to see presented as an integrated package. It will be interesting to see how things shake out, especially if financial institutions get serious about taking their online banking platforms to the next level. Bottom line–it’s an exciting time to be in the space!
Thanks again and pleasure meeting you!
Best regards,
Bryan Link, CEO, SimpliFi