10 years on: Once a first mover, Mint must work to stay relevant

Mint was an instant hit when it launched 10 years ago. It came out of nowhere, making something boring but important like budgeting kind of fun. It was easy to use, and best of all, it was free.

It was so full of promise it exceeded its new user acquisition goal of 100,000 in the first six months — by 10 times that. Two years in, it hit 1.5 million and was sold to the data aggregator Intuit for $170 million. It hasn’t had much in the way of competition — until now.

Mint today is a mobile app working to stay relevant in a sea of similar personal financial management (PFM) apps, such as Moven, Clarity and Penny. The popularity of such apps has increased over the last two or three years and will probably continue to do so with the rise of digital assistants like Siri or Alexa, automated savings and investment apps and an overall financial services shift toward customer self-service and control over their money.

Mint still stands out from the crowd, but it hasn’t been able to attract new users like it used to, said Stephen Greer, an analyst in consulting firm Celent’s banking practice. People who like managing and tracking their money carefully tend to check their accounts more frequently today than they did 10 years ago which is running Mint into the same wall blocking all PFM apps: getting secure real time data feeds from the financial institution.

“For a while, Mint was the best on the market because it was the only one on the market,” he said. “It did a good job for a while but the biggest issue for Mint, and one reason it’s gone downhill, has always been the aggregation piece. If the site isn’t accurately reflecting your spending – if it’s not live, it’s not real time, you see discrepancies – you’re most likely not going to use that service.”

Mint now has more than 20 million customers, according to an April 2016 blog post. It hit 10 million users around Aug. 2012. Mint did not provide growth figures over the last 10 years by deadline.

That friction also creates a sort of set-it-and-forget-it mentality, said Tiffani Montez, a senior analyst with Aite Group.

“One of the challenges is [PFM] is like a shiny toy,” she said. “If you try to combat the set-it-and-forget-it mentality you have to be able to provide some additional value that deepens the relationship.”

That may require a smoother flow of customer data between the customer’s bank and PFM app, like the ones Intuit just won from Wells Fargo and JPMorgan Chase. Earlier this year it reached deals with both banks that should theoretically help reduce some of the friction around data sharing. According to the agreement, Chase customers can authorize the bank to share their data electronically with Intuit’s apps: Mint, TurboTax and QuickBooks. Before, customers would give third parties their online banking passwords so they could log in and import customer account information.

Many banks have claimed that common practice compromises cybersecurity and in 2015 several of them, including JPMorgan, temporarily suspended customer data access to third-party data aggregators like Intuit.

However, how much data gets shared is unclear, Greer noted. The banks can probably share basic transactional information like how much money a customer spent in a given period or the current account balance, but might not reveal how much interest a customer is being charged on a credit card or what kinds of fees he or she is paying.

Mint said while it’s always been good at tracking and insights, it is now focusing on moving into transacting on users’ behalf, beginning with its bill pay functionality.

“In the past you got that insight but you had to take action yourself,” said Kevin Kirn, head of product for Mint. “Bill pay is just the beginning of that journey from insight to action. All our teams are looking for ways to connect that action experience through Mint.”

Perhaps the data sharing agreements will help Mint in creating more and more action experiences, but Greer is skeptical.

“Opacity is in their best interest and withholding a lot of that data works in the financial institution’s best interest,” Greer said. “My curiosity is in how much information they’re actually getting through this ‘direct connection’ and what that entails. My skepticism is around how much value that provides. I’m willing to say its not as much as it could be.”

That’s because even with the agreement, Mint is a direct-to-consumer product. Today there are plenty of companies that sell their PFM solutions to the banks themselves, aggregators like Yodlee, MX and Plaid that provide more value to the bank than Mint does. Mint makes money off its consumer business. When it comes to advice, it makes recommendations in customers’ best interest – and not necessarily in the best interest of the banks.

About a year ago Intuit shut down its financial services aggregation services, probably so it could access a market of direct connections – like those with JPM and Wells – and direct links to feed its specific services, like Mint.

“There’s just more value they can provide,” Greer said of the MXs, Yodlees and other direct-access data aggregators and infrastructure providers. “Mint hasn’t provided a whole lot of value to institutions and banks don’t want to play that game. They’d rather cut off the aggregator from getting data on consumers so the service will buffer – that’s essentially what’s happened.”

App of the Week: HelloWallet

As much as we talk about the advances in investing technologies/platforms on Tradestreaming, personal finance tools are really kicking it.

One of the most popular is HelloWallet. Like the model that its predecessor Mint.com pioneered, HelloWallet is meant to not only track and manage personal spending/budgets, but optimize them as well.

Visualizing your financial life

If you’re like me, you’re a visual person. One of the hardest things to tackle with personal finance is to really understand all the ins-and-outs, money-in/money-out.

Our lives are complex. Spending on individual items needs to be put into the larger context of everything going on in our financial lives.

HelloWallet does a powerful job representing data with useable visuals and the entire service is centered around goals, the guideposts that help determine what we should — and shouldn’t — be doing financially.

After hooking up your bank account and credit cards and filling out simple budgetary items, HelloWallet begins spitting out personalized daily guidance. These zen-like tips are comprised of ways to address lowering spending, reorganizing debt, saving more, etc.

Social benchmarking and conflict-free

HelloWallet also provides social benchmarking by explaining what others in your social/geographic group spend on particular items so you can tell whether you’re overspending or not.

One of the gripes people have with Mint is that its revenue model is to refer its users to 3rd party sites and receive remuneration for any money spent on that new relationship.

HelloWallet doesn’t do that and makes a point of emphasizing that it’s conflict-free. The app comes with a free, no-credit-card-needed 30 day trial. It’s generally $8.95 per month.

Check out HelloWallet.

How to make Betterment better (Hint: truth in marketing)

Sometimes, it’s worth reading the fine print — especially, when it comes to financial products.

I was interviewed by Mint.com recently about my thoughts on Betterment, a startup that performed pretty well at recent tech conference, TechCrunch Disrupt (see, Betterment wants to be your new, higher-yield savings account).

What is Betterment?

Well, it’s really an investment advisory service that masquerades as being a better savings account.  By removing much of the jargon (the site doesn’t even mention securities by name), Betterment removes many of the barriers to putting money in the market.  As I said in the Mint interview:

For most people, opening an online trading account and figuring out what to buy and who to listen to, there’s so much noise out there.

And that’s true: how many individuals really understand asset allocation, diversification, risk when professionals have such a hard time defining them?  It’s kind of like I know it when I see it.  Betterment provides a usability layer that requires only one decision point: what percentage of my money do I want in the market?  That’s it.

Removing the confusing jargon and the pain points associated with complicated concepts is ultimately a good thing.  I can just picture my grandparents trying to navigate an E*Trade account trading screen.

Oops, it’s not actually a bank account

While pursuing a noble end (making investing easier for the mass majority), Betterment stumbles when it positions itself as an alternative to a savings account.  It is most definitely NOT a savings account.  Money in Betterment is split between Exchange Traded Funds (ETFs), one of which will include U.S. Treasury Bonds if you allocated to that.  That means, an account holder

  • risks losing some, if not all, his money
  • will see fluctuations in the account
  • will have investment-level taxes on gains

I was quoted in the interview:

“They took a process that’s inherently scary and overwhelming for people and used technology to simplify it,” says Miller. “I think that’s an honorable thing. But to market it again and again, to talk about a savings account, is just disreputable. It’s scary, actually.”

Though it appears that they’ve toned it down recently, there’s still just too much talk/discussion on the Betterment website about safety and savings.  Betterment may be a great product to *invest* spare cash just sitting in a savings account (much like ShareBuilder used to be).

Just don’t compare it to the savings account.  At 90 basis points (.9%), it’s also expensive.

—> Like what you see? Hey! Don’t forget to subscribe to the free Tradestreaming newsletter for updates, tips, and special offers.

Source

A Better Savings Account? (Mint.com Blog)

Looking to make a Mint in financial planning

So, top-dog personal finance website, Mint.com, just announced a further step into financial planning with some goals-based tools to help users plan financially for the future.

From the release:

Mint’s new Goals feature seeks to take the difficulty out of both setting goals and regularly tracking your progress towards those goals. With a few clicks of the mouse, you can set up a savings goal, and then use Mint.com to help you achieve that goal.

Using Goals for Saving for the Future

So, if a Mint user wanted to save for something like home improvements, they’d use Goals to:

  1. Set funding source
  2. Set goal dollar amount
  3. Blend in financing options
  4. Establish target date
  5. Specify monthly savings target

Makes perfect sense, right?

So, the move from helping people track to helping them plan is an obvious one and a good move for Mint.

And Mint’s revenue model/value proposition work well for this foray into planning.  I assume Mint will begin to gain referral fees as they recommend loans, travel services — anything that helps assist in the savings and planning process.

According to the NY Times:

The new feature comes as Mint.com is facing increasing competition in the online financial software space. New entrants like HelloWallet have started attacking Mint.com’s business model and have emphasized how they offer more financial planning advice services.

The trend

We’ve seen investment platforms begin to automate professional grade services to their client in an effort to round out their offering and attract full-service clients (see my review of E*Trade’s Online Adviser).  Now, we’re seeing personal finance sites begin to creep into the financial planning/investing/future-oriented space.

What get’s me juiced is that sites like Mint have a TON of information about their users — the type of information the investment portals and online brokers drool over.  This positions them better for a move into investing — much like the much ballyhooed-TechCrunch Disrupt-winner Betterment is focused on.

Additional Resources

  • Mint.com Expands Into Financial Planning Tools (NY Times)
  • How To Set and Track Financial Goals With Mint (Mint blog)
  • Goal Keeping Gets Easier at Mint.com (All Things Digital)

—> Like what you see? Hey! Don’t forget to subscribe to the free Tradestreaming newsletter for updates, tips, and special offers.