I recently had the opportunity to look at a demo of Intuit's new software called FinanceWorks. In true social-media-aware fashion, the nice folks at Intuit were listening close to the Twitter feeds for any mention of their product. So sure enough, when I mentioned FinanceWorks (FW), they began following my feed and invited me to take a test drive.
First, a little background. In February of 2007 Intuit closed on the acquisition of Digital Insight (DI) - a deal worth approximately $1.3 billion. DI is a third-party provider of online banking software. By "third-party" what I mean is that they are not a core processing provider to financial institutions. Core processing can be defined loosely as the accounting software banks and credit unions use to actually track each and every account and each and every transaction within those accounts. Most people don't realize this, but unless you bank with a very large bank or credit union, your data isn't likely to be stored at the bank itself. Rather, the data is stored within the data center of one a core processing company such as Fiserv, Metavante, Jack Henry, etc. In most cases, banks under a billion or so in assets will outsource their core processing to one of these companies. In some cases, banks or credit unions will purchase the software from these same companies and run it in-house while much larger banks will actually write their own software.
In order to fully appreciate the complexity of online banking and where all these various players fit into the puzzle, it is helpful to understand all the different pieces. The unfortunate bit in this whole story is that it is fabulously, unnecessarily complex. In-fact, it's really not complex at all. Everything hinges on the core. The core is where all the data resides. What complicates things is that the core providers really don't want anyone else interacting with their data. Before I get up on my soapbox, let's just say that DI did the dirty work of connecting with these core processors and that banks and credit unions now have a third-party choice for online banking and bill-pay.
One thing that online banking and bill-pay all have in common is that they are simply transaction processing systems. Some work well. Most are abysmally poor examples of user interface design. DI's happens to work pretty well. One other thing they have in common is that they don't offer the kinds of analytical and planning tools you might find in software or online tools like Quicken, Money, Mint, Wesabe or Thrive. The downside to all of these tools is that they don't allow users to see their data in real-time. They each can connect to your bank on demand and download a batch file of the latest account data, but it's just not the same as real-time.
In-steps FinanceWorks. Intuit took DI's knowledge of core connectivity and bank/CU relationships and built a tool that takes features from Quicken and puts them at the bank alongside the online banking system. FinanceWorks is sold to banks and credit unions who then provide the service to end-users. From what I've heard most banks and credit unions are providing the service to account holders at no cost.
As you can see in Scenario 1, most PFM tools require users to download and import a batch file containing recent transactions. Most software has this process fairly automated. What FinanceWorks does that none of the other tools do is provide users with a real-time connection to their account data.
So, what does FinanceWorks do? FinanceWorks seems to be a subset of features from Quicken. It allows users to set and manage budgets, categorize spending and keep track of bills by setting due dates and notifications. FinanceWorks does not provide bill-pay and does not interact with your banks bill-pay in any way. You can set a reminder in FW to pay a bill but you then must leave the system and log into your banks online bill-pay system to pay the bill.
I liked a feature called RealBalance. RealBalance allows you to adjust a slider back and forward in time to show what your balance is (or would be) based on bills and deposits it knows are coming up. I also liked the fact that you could add accounts from other institutions. This “account consolidation” feature is common and exists within all the third-party PFM tools such as Mint and Wesabe.
While the features within FinanceWorks were nice, there wasn’t anything
earth shattering or new. Overall I thought it was a good application.
The biggest benefit so far lies within their business model – not
within the features. Understand that FinanceWorks is sold to banks and
credit unions – not to end-users. However, banks and credit unions will
have a significant leg up on their competitors by offering a PFM tool
that’s “Powered by Quicken”. As far as end-users go, if you already
own MS Money or Quicken, you probably won’t find much of a reason to
start using FinanceWorks. Convenience and real-time data are the two
big draws. The desktop versions of both Money and Quicken have a much
richer feature set.
- Real-time connectivity to core processor
- Solid personal financial management tool
- Can be branded for your financial institution
- “Powered by Quicken” had brand recognition that will help financial institutions market this service to end-users
- RealBalance feature shows accurate balance given upcoming deposits and expenses
- Features still have a ways to go compared to desktop personal financial management tools
- Not integrated with bill-pay
- Still a “view only” application – you can’t perform any transactions such as paying bills or making transfers
Banks and credit unions might view tools such as Mint and Wesabe as competitors. FinanceWorks gives banks a tool they can provide to their end-users that would give users the features they want in a tool branded by the bank. Do I think FinanceWorks has addressed all customer needs? No. There's a long way to go, but they do provide a solid solution for financial institutions to get into the game of supplying a personal financial management tool to their end users under their own brand. The fact that banks even see a clear need for this is a positive step in the right direction towards taking a consultative approach to banking rather than being simply a transaction processor.