All of the connectivity and aggregation away from the utilities and financial institutions that you use are definitely customer-centric, but do we need more abstraction or integration with all of these tools? Also, I think it’s hard to charge fees for helping people manage their personal finances. BillPay, electronic stock trades are things that are harder to do and I think most people are willing to accept fees for utility. But building another interface to show all of my finances, I’m not sure how to build an upgrade path to charge a subscription fee to access what is already free, albeit cumbersome, online interface from my bank or utility.
Prosper, Lending Club, Kiva and quite a few others are trying to ride the wave of providing more direct control on personal investments by building what amounts to Online Investment Clubs, and build a marketplace for matching ideas with resources. While this is not a new concept, building sophisticated credit models, arbitrage and hedging models seem to never go away. One conversation I had, the woman said: “My Kiva investment are doing better than my IRA!” With Kiva paying out 0% interest, I guess the mantra of Flat is the new up is still holding true.
Serious Number Crunching
Building online actuaries, statisticians and derivative math folks continue to march ahead towards increasing automation, but making these powerful tools accessible and understood by a larger educated bunch of users. We are and always will be obsessed with numbers. In chatting with a friend about this, there are quite a few simple tools that greatly benefit the users — like standard deviation, averages and sorting functions. Think of your college Stats 101 class.
Rich Internet Applications (RIA)
To make things more visually appealing, all of the companies are using RIA to make it more consumer friendly. From moving around modules, to having customs skins, and visualizing data, it all adds up to a slick application that is appealing to build stickiness. This provides some real differentiation in terms of who they have brought on for User Interface and User Experience since these are critical to getting users familiar with the features and either cursing or praising the ease of use or functionality.
Crowded Spaces and End Game
I am curious to know what the end game will be for this overly crowded space. While I think all of these companies are providing value, it will definitely come down to a few key players in the market. Financial information is personal like a mobile handset, establishing a high trust model from the start is essential if that site is aggregating your personal financial information, and performing statistics and metrics to advise you on spending, saving, and overall performance. While these “dashboards” are convenient, users might just prefer the cumbersome process of using all of their sites they have bookmarked already in their browser.
Another way to differentiate, but will quickly get crowded as well is to have a presence in mobile and social networking, namely an iPhone and Facebook application, respectively. Mint.com for example has an iPhone application and KaChing has a Facebook application. Providing more touchpoints and access to PFM is a good idea, particularly with mobile, as much of society is around a mobile lifestyle where our handsets are the remote control to the world for us.
This could be particularly handy for corporate use as in the case for Expensify where you can track receipts and submit expense reports.
My personal believe is that all of these tools will fall into one of two categories:
The first point is self-explanatory, the second might be odd to see SAP and Oracle on that list, but as these companies get larger, I strongly believe that they will grow both their mobile and consumer strategy in order to diversify and grow revenue.
Perhaps I am a late adopter of these sites, or the utility I gain is minimal and thus not worth changing my user behavior at this time.