Jwaala on PFMers Wesabe and Mint
Posted by Trey Reeme on September 28th, 2007
On a post on the Jwaala homepage -
Are we really all just friends?
If you are a bank or a credit union, you’ve probably heard about the new slew of straight to consumer personal financial management sites, places like Mint.com and Wesabe.com. If you have’nt heard of these sites, then buckle down and do some research already.
Again, if your a bank or credit union, don’t be fooled into thinking that we’re all just friends, that sites like Mint and Wesabe are your buddies. . . .
Once one of your customers start using Mint, they are just a heartbeat away from switching their deposit accounts to some other institution that Mint recommends as a better choice. And it will all happen without you even knowing why, one day the money will drain from your deposit accounts, never to return, and years later you’ll realize, “hey, Mint recommended all my customers leave me”.
They include a link back to this Mint post. As Jwaala says, they don’t shy away from competition. Watch the video and see what I mean.
Will be interesting to hear of the discussions coming from all three PFM (personal financial management) groups next week. Jason Knight from Wesabe will be at our Symposium, and Mint and Jwaala will be presenting at FINOVATE 2007. BTW, the only reason I’m not going is schedule overlap. Jim, you know we’d be there if we could!
Expect to see a lot of conference coverage and idea sharing throughout the ol’ FI blogosphere next week.
Wow. Talk about fear mongering. Just add in there Mint is going to kill your spouse and kidnap your children and it’s complete.
The whole “don’t let your customers use Mint, they’ll leave you in the night thing” is like saying don’t let your family leave the house, the kids will be shooting heroin and your wife will leave you for another man as soon as she gets the chance.
If your customer is ready to leave you just because they see a better rate, you’ve already lost that customer and keeping them from Mint isn’t going to change this.
It seems to me, while Mint and Wesabe are saying to banks and CUs: “Be more competitive. Fight for your customers. Be so good your customers will never leave you,” Jwaala is saying is “Do everything you can to keep your customer away from the market. They might see something they like more. We’ll help.”
As a consumer, which do you think I’m going to go to?
For me using Mint made me realize just how excellent of rates I’m getting and thus I’m enjoying my financial institutions even more now.
But for those that can’t compete on the rates, they still shouldn’t shelter their customers – they should kill the competition through total product and brand experience. Then no Minty suggestion is going to make people switch.
However, if they can’t compete on product or product experience, I think they should seriously consider why exactly they deserve their customers over someone who can serve them better.
@Brandon – I totally disagree and agree at the same time. I agree that the customer who jumps ship because he/she sees a better rate was going to leave us anyway. The most important point, though, is the person who decides to use a website like this is a rate-shopper. Except in the most extreme circumstances, this person will push all loyalties aside for their own personal financial gain. Very few, if any, brands can keep a rate-shopper loyal just for loyalty’s sake. For that type of member/customer, rate is everything.
@Credit Union Warrior – I completely agree! Actually I deleted and rewrote something similar about three times. Indeed there are people who it doesn’t matter what you offer in experience, the bottom line is what matters. However I think that keeping these people by keeping your entire customer base from a service in order to keep the rates shopper sheltered from Mint will likely have a total negative effect on your client base.
And in the end the shopper will still leave you as soon as they find the better rate – so if you’re not going to play the rate game, why even go to such lengths to try and keep such a minority?
(and I’d argue they’re a minority just looking at the horrid average rates in Mint – haha)
You guys both make great points. The only thing I would quibble with is Brandon’s characterization of Jwaala’s post as “fear mongering.”
After all, isn’t this what Mint.com is promising, or at least implying, that its users will jump ship based in its recommendations?
To me, it’s not really Jwaala inciting those fears, but Mint.
My super-cynical reaction: Jwaala is trying to sell their services, which compete with Wesabe & Mint, by persuading CU folk that by offering Jwaala, they can keep their members away from similar services.
(I often embody Ron’s “Mr. Cranky” turned up to 11.)
I think I have more to say, but I don’t think it’s coherent enough to share yet.
I agree with Brandon. Any business strategy to retain consumer loyalty that requires consumer ignorance is not realistically sustainable. Broad information is only a click away for any person with access to the Web, regardless if they are using Mint or not.
I am a firm believer in letting competition do its thing so that consumers get the best value possible and companies must continue to aggressively evolve, improve and earn their consumers’ loyalty on every interaction.
To act within their tenets, credit unions really should do what’s best for the member by helping them evaluate and select whatever financial management tool works best for them to manage their money. Either they have already earned their member’s loyalty or they risk losing their business every time the member is exposed to a better rate, compelling post or other information that causes them to reflect on where they should be doing their banking.
In this digital age anyone can check rates. I work in Sales for our credit union and I am finding that our members are becoming more and more educated. Which means I have to know what is going on, I have lost the sale. I believe we have the best services and the best products; so I often challenge our members to find the best rate and if I don’t have it then let’s work so we do. If there is a system that is doing this and more for our members great! All I can say is—-why didn’t I think if it first.
If we are not willing to step up and embrace these new technologies I think we are going to be in trouble. Wesabe and Mint are just the beginning, they have a new blue ocean; before long someone else will create one that will do what Mint can do times 10 and all of our members will beg for it. Then we will all wish we had got in first.
These programs are not going away; they are just going to get bigger. Either we fight the internet for educating our members or we start educating them better. At our credit union we arm our tellers with the rates of all the competitors in our market so they can do just this.
Well, stepping down now
Excellent dialogue here and agree competition is a good thing. While on the topic of Mint, anyone else worried about how Mint screen scrapes? I am not totally alone as see this post I hear that they partner with credit unions and banks yet I can’t find anything on their site listing who they have partnered with nor how a credit union would even inquire about partnering. Perhaps, I am just missing it. The push for better multi-factor authentication has to put some type of damper on the screen scraping.
Quick poll:
Should credit unions somehow respond to services like Mint, Wesabe, Geezeo, Expensr ?
Wow – great discussion… I just want to respond to Andrew’s quick poll by saying this.
Credit unions should respond to services that allow consumers to understand their finances better by:
If your CUs are as good as they should be, you shouldn’t be afraid of the transparency that PFM tools could bring.
Amen
We should all be scared of commoditizing our products/services…If you think consolidation in the industry is bad now, just wait!
The thing is, we should be selling the credit union difference, not just a hot rate. While it should be agreed that this is certainly the wave of the future, I am truly fascinated that folks in the industry would be excited about it. If the best rate always wins on such a site, I would argue that member/customer service is history – an FI is forced to cut all service costs to compete solely on rate.
I would rather counter these sites than embrace them.
Again, good dialog here.
I think some of you are reading something into this that isnt intended. Andrew’s post doesnt look like fear mongering to me. I think he is simply trying to say that these new companies (Mint Wesabe) are not the “partners” of financial institutions that they claim to be; and I agree!
Theres no “partnership” about it. Either you join in with them or you get left out. So in that since yes, the institutions need to compete on Mint. I dont see anywhere where Andrew implies that banks or CU’s should try to hide Mint and Wesabe from their members.
It appears that Jwaala has a product FOR FINANCIAL INSTITUTIONS to add features to their existing online banking application. From what I can gather they are extending this application to provide most of the services that Mint and Wesabe offer. Online banking is definitely in need of improvement. If an institution can install these features and also get some Mint and Wesabe capabilities….....well shoot, bring it on!
If you think of it from an institution’s perspective, offering these tools can certainly breed loyalty. Hosting an outdated banking app, is cause for people to switch.
Look beyond this Mint and Wesabe discussion. The business of banking is beginning to change! AS AN INSTITUTION the goal is to provide your customers with the services and tools they want to make them happy.
@Warrior: The products are already – and have always been – commodities. What isn’t commoditized is the service (post- AND pre- sale) associated with the products.
Which is possibly what you’re getting at with your “selling the CU difference” comment.
But, from an outsider’s perspective, this “difference” is too intangible for me, and perhaps, for many prospective members.
I’m sure some people care about “THE CU difference”, but I’m willing to bet that a lot more want to know “YOUR CU’s difference”.
They don’t care that you belong to some secret society called credit unions, and that with your secret handshake, you’re somehow better than the big bad banks down the street.
If prospective (and current) members don’t experience this so-called difference, than touting it is really just blowing a lot of smoke.
@Ron – Exactly. And posting rates on Mint is doing nothing to differentiate this “CU Difference.” It’s saying, “Yeah, you’re right. Our products are the very same as everyone else’s…so we’ll just compete on price.” Embracing a website like Mint, to me, is like admitting once and for all that there is no difference between financial institutions. I’m not ready to do that yet.
That being said, if your rates are in the top 1% of FIs and you can compete in such a forum, more power to you. And if you can then make the price-shopper a loyal member, this Bud’s for you!
...as an aside, it’s good to know that in a battle of rates credit unions often win.
I’ll put a stake in ground…
When a credit union’s own members stop visiting the credit union site and start visiting Mint, the credit union has lost the members “eyeballs” and this is not good for the credit union (regardless of rates). Just plain old not good.
Let’s face it, the internet is the KEY touchpoint in today’s market, people seldom visit branches, they don’t look at mailers, they don’t want a bunch of email marketing.
But they do check their accounts online, and signup for alerts. Well, when you get that all thru Mint, the credit union is now almost completely invisible and in a very precarious spot indeed. Who could blame a member though for doing it all thru Mint? The site is quite good, with tru PFM and indeed seems very interested in helping users to better with their money.
I would love to hear someone explain how this is a good situation for credit unions.
On another note, I think one great thing that Mint and Wesabe (and others like geezeo and expensr) are doing is waking everybody up. It’s hard to believe that it is 2007 when you look at most online banking solutions, it’s as if everybody said ”’good enough” and stopped trying to improve. Mint and Wesabe finally show that things can be better.
@Andrew – 100% right. Don’t embrace Mint. Respect it. Learn from it. Sit back and say “man, that’s cool!”...but cheese and crackers, gang, credit unions have to come up with the next big killer app that out-cools Mint.
@Doug True – I wasn’t aware that Yodlee (and thus Mint) used screen scraping. From what I understood they partnered with banks to get their information. However, seeing the post you linked, they do! Whoa, sure makes all of the crazy questions they ask make sense.
Even still, I don’t find myself terribly concerned with it and the effects of multifactor on it. Yodlee has done a great job with keeping up with measures put in place over the years (though it can get ridiculous – just try and add an ING Direct account. Sheeeesh – that’s a ton of questions). However, as things such as BioPassword start becoming popular – yeah, Yodlee is going to have a very hard time keeping up with that. However, I can see people starting to select banks based on the tools they use (Just as people choose banks now that work with MS Money or Quicken for no charge)
What is funny to me is all the bloggers that I’ve seen decrying Mint but never mentioning the fact that, if I’m not mistaken, Quicken uses Yodlee to power its account services and has done so for years (nearing 10 unless memory fails me completely). So all concerns about Mints methods should be tossed onto Quicken and friends as well. As in the end Mint is, for the most part, just a pretty presentation layer just like they are.
while i think sites like Wesabe and Mint are great, i don’t know anyone outside the FI blogosphere who uses them.
i still come across a lot of members, friends and family who are reluctant to use online banking or financial management tools.
i did a quick survey this morning on Yelp (Seattle) and so far no one has heard of Mint or Wesabe.
what’s my point? not sure. just that other than checking their statements online, i know few people who are very engaged with managing their finances online. hopefully these tools will help change that. and i whole-heartedly agree that our homebanking systems need to improve by about 100%.
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