Mint: I heart you.
Posted by Trey Reeme on September 19th, 2007
This Techcrunch post announces Mint as the most bad-A of the TC40.
Why should you care?
Look at the screenshot on said Techcrunch post and say with a straight face that isn’t impressive.
Most FIs will be calling an emergency meeting (right after you sign up for the service, because you know you will).
FIs have long known “our customers/members won’t switch – switching costs are too high.”
Not anymore. Underwhelmed customers/members can now put a dollar amount to what you’re costing them.
As Tony puts it, “THEY will find the best deal for YOUR members. Shouldn’t YOU be doing that?”
“Switching cost” is now “switching savings.”
First off, don’t confuse “switching costs” for “transferring costs”.
Tools like Mint, etc. make it easy for consumers to move money between accounts. But that hardly means that consumers will close out those accounts and “switch”.
Second, don’t overestimate the number of people who actively manage their money, and of those that do, will sign up and use tools like Mint in the near future. (I’d normally throw out some statistics here, but I’d leave myself open to be mocked again by Charlie or Brent—not going to let that happen).
I whole-heartedly believe that sites like Mint and Wesabe will revolutionize financial services—but it’s going to feel a lot more like evolution than a coup.
Ron,
I think the issue at hand here is that there are some incredibly powerful tools in aggregation services like Mint.com. The services are high-end and serve immediate needs. My point in my post was that if credit unions don’t catch wind of this soon – they will be playing catch-up in an industry that they should be leading.
I think there will be a coup if CUs don’t start participating and innovating. The reason I say this is Mint.com has a button titled “Ways to Save” where with a click – you may find out that your CU credit card is not the best rate that you qualify for (goodby primary cardholder relationship). You may also find that you can get a better yield on a savings product at ING and click here to set up and transfer your account for free (goodbye retirement accounts).
Mint.com and sites like it will take the legwork and pain out of switching FIs in the immediate future. I think it would only be a few years to have the whole process automated from simple applications like these. No more switch kits and hello informed savvy consumers.
Credit unions will have to polish up their game or get on board. But that is my opinion.
Tony: Bankrate.com has been around for years. I just went there, searched for the best savings rates in the Boston area, and didn’t see any local bank in the top 20. The leaders were AmTrust (!), iGoBanking, GMAC, Countrywide, and INGDirect.
Has Bankrate caused a run on the big banks like BofA and Citizens around here? Uh, no.
And why would you presume that someone didn’t check out the rates on their credit card BEFORE applying for it? By, say, going to bankrate.com or money.com or
- gasp! -the providers’ web sites (which takes all of about 10 minutes).And what if that customer actually values the reward program over the rate—as a large percentage of customers do (I’m not allowed to tell you that number on this site)?
So tell me again why Mint.com
- or some other startup -is going to the great catalyst to cause this upheaval in financial services? And why CUs are going to be the ones that suffer if they don’t “get on board”?You’d be surprised at how many people say that wouldn’t move money for anything less than 3-4 percentage points better than what they get now—or that wouldn’t move their money at all, for any better rate.
I don’t doubt for a second that sites like Mint offer great functionality. And I do believe that not only CUs, but all FIs will have to “polish up their game”—but for right now, this launch is a WHOLE lot more interesting to the blogosphere than it is to the masses.
I agree w/ Trey that the screenshots are really impressive—so were the screenshots from Yodlee six, seven years ago. They haven’t had the impact they were trumpeting either.
I think that perhaps Trey and Tony are over-reaching when it comes to Mint’s impact. I don’t say that because they are a competitor, (they are) but because I’ve drilled into the service and I have a good sense of its strengths and weaknesses (I’d be happy to elaborate those in person in Indiana). All Mint has done is put a dollar sign in front of the benefits of switching (leaving aside the funny math). This is a benefit to the users, but I agree with Ron, and don’t think it is a game changing feature.
If you are an FI, the ground is moving under your feet – some call it an earthquake and others a tremor. What I am 100% certain is that the landscape is going to look very different in five years, and you won’t recognize it in 10. I am equally certain that, for the most part, it will be the same set of FIs at the top (large companies can “literally” afford to make mistakes). The question for readers of Open Source CU is what impact will this change have on your credit union? Are you harnessing the change in online banking for both your organization and your members’ benefit? If the answer is no, the 10 year forecast might look a little grim.
We are in the early stages of a category build, and its participants have varying relationships to CUs and FIs. Mint’s is transactional “pay me and I’ll recommend you.” Wesabe’s is non-existent, but we are trying really hard to form relationships with the CUs that care about using the Internet to improve the lives of their members. I have an ever expanding spreadsheet of competitors who think that consumers have been ill serviced by FIs , and see opportunity. The attention being paid to our value proposition in the market is increasing, and people are responding.
I think Ron makes the best point: impressive screenshots aren’t success. Looking pretty won’t generate mass appeal (take eBay for example). Success will be the result of companies that truly improve their members lives…everything else is just jostling for position.
Oh, and it is GREAT to be back posting on OpenSourceCU…it has been too long.
OK, so I too heart Mint…but at 11:00 PM, putting the finishing touches on a Board presentation, I cannot for the life of me stop thinking about these technology changes and a credit union’s closed membership. Seeing how much you can save at a particular credit union versus another financial institution is one thing, but being able to join that credit union to experience said benefits is quite another.
Are sites like this (and the doors they open/close) the end for small to medium-sized credit unions who are struggling even today for deposits/loans? If not, how does one reconcile open competition with closed membership?
I heart Mint too. Why? Cuz it’s pretty and it’s fun and Bankrate.com is so…...so…bank-like. Puke. Plus, the word BANK is in the title. Sorry Ron, I hate it.
Mint feels like a neatral community. Like Wesabe. It’s there to help.
Ron: What charts and graphs do you have that PREDICT that the future consumer is going to be as complacent as the consumers of the past? I’d love to see that. All the generational research I’m reading says just the opposite. Gen Y will bring us back to the values of saving. They HAVE to. We can’t handle more debt!
Banking is so ripe for RE-volution. This is not going to be an EV-olution as you put it….we don’t have the time to keep tweaking a 100 plus year-old model.
When I first read this post it make me pause. Wow. It’s happening…...someone is looking at this thing we call “banking” and saying “Why does it have to be so dang boring and hard?”
Is anyone else going to Finovate in NY? http://www.finovate.com/index.html
This should be a great showdown or showoff between the traditional vendors DI/Intuit, Metavante,ORCC and startup’s like Mint!
@Ron – I guess I wasn’t clear but I have really been trying to trim down my verbose posts (really I try).
I don’t think that Mint.com is the final incarnation of this aggregation trend. In fact, these systems are nothing more than MORE sophistcated “Portal Systems” that all the credit unions and banks were told that they would need 6 years ago.
You are right though – screenshot will not predetermine success. But they do give us a glimpse at future possibilities. What Mint can’t do – the next company will.
You are right that this isn’t making a big splash now with the whole world. I am saying that we might be looking at the incoming waves of technology that will wash over the financial industry. And that it would be wise to batten down the hatches or get washed away.
Now, for the points I disagree on – youth members do not go to bankrate to get credit cards. They sign up for the free t-shirts (I am sure that you have seen tht data). Most of them don’t compare at all until they make that first late payment and their intro rate goes from 9% to 29%. Then they will flock to a service like BankSwitcher or Mint or Wesabe to transfer that debt to another lower rate card. It only takes a handful of college kids for this thing to take off like wildfire in the dorms.
Second, they don’t care about rewards either. What college kids care about AAA, purchase protection or rent-a-car discounts? Flyer miles maybe – but even that is pushing it. We know historically that these kids are not good stewards of credit card debt. The service that rises to the top is going to be the one that allows online debt transfers for 0% down for 12 months for credit cards.
The future is not determined by the needs of the 50, 60 or 70 year old members. It is dictated by the 10, 20 and 30 year olds. And they grew up on the internet. They trust it. Their cells phones are their link and the internet is their culture.
I am usually right on track with you but in this case I have to disagree. But I love you anyway :)
@Denise: Bankrate.com is so bank-like? First off, you must be kidding. Personally, I think Bankrate’s design is way too busy, but it’s hardly “bank-like”.
Second, even if it was “bank-like”, I’m not sure that’s an insult. Compared to most bank sites, way too many credit union sites look like they were designed by a third-grader. (my apologies if I offended any third graders).
And third, you don’t like it because it has “bank” in the title? C’mon. Jwaala and Geezeo are much better, eh?
It’s not about what YOU like (sorry to burst your bubble). Millions of consumers looking to compare rates on financial products have gone to the site, and what name better signals rates from banks than bankrate?
Im not sure what to make of all this discussion other than, I’m confident the FI industry is going to be changing from what it is today. But then again, I realized this a year ago.
The new kids on the block (wesabe, Mint, billeo, lendingclub, etc) are not here to help, folks! They are going to force change and make things even more difficult for the FI’s to turn a profit. Unless an FI can make money on deposit accounts alone, I dont see how they can avoid getting into the game (meaning= compete).
In today’s world it is about eyeballs! If these sites attract the eyes with cool technology, it is extremely easy for them to offer competing services in a convincing way. Ron, you are correct about the 3rd grade websites of most CU’s. They are way too typical of the banking industry. Stale, stagnant, boring come to mind. Dont mean to be rude. Im just being observant. Look at Web2.0. Financial institutions can do some amazing things with technology. Mint for example, why didnt an FI do this and market it? Think of how many new accounts you could open as a result of that.
FI’s will have to counter the new competition with solutions of their own. You have companies like Mint offering custom views of your finances (among other things). The FI’s have companies like Jwaala that can add that functionality.
Give consumers the tools and they wont be so motivated to go check out other sites.
You can argue this all day long, but Im going ALL IN on online services DRAMATICALLY changing the way consumers bank!