Here come the PFMs

Craig  McLaughlin

October 22, 2007

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The game is changing for personal financial management tools. The tools are getting better, the prices are coming down, and they are beginning to offer the consumer real value.

Digital Insight’s solutions are looking better. What was once a stale user interface seems to have been positively impacted by the Intuit acquisition. The timing for this new launch is key. With so many free tools in development today, it was important for DI to remain competitive.

One of the most compelling free solutions is The design is great and it actually works. The experience is stellar and the business plan makes sense. The company is taking off, a recent article explained that Mint had the online banking penetration rate of a bank with about $17 billion in assets within two weeks of launch.

Mint is one of the few Web 2.0 PFMs that offers real value to the consumer. Their software will search through bank transactions and suggest more cost effective ways to accomplish your financial goals. The two examples the Mint CEO cited at Finovate 2007 were cable television and interest bearing checking accounts.

Ever wonder how much you can earn on an annual basis by being invested in the best savings account? Mint knows and ING appears to be the biggest beneficiary of this analysis. The same is true for bundling your phone, internet, and cable TV services through Time Warner.

The future for these tools is bright. It will be interesting to see this disintermediation between the consumer and their bank. In most ways the interface offered by these tools are superior to the typical online banking interfaces. Innovative institutions should seek to leverage these channels. The largest players will likely offer very similar experiences out of competitive necessity. Smaller firms should seek to private label PFMs to offer their customers a compelling reason to not use third party PFMs that will likely seek to disintermediate them.