Online Banking

White-Label PFM's BBVA's White Horse

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It only took a couple of months for consumers to flock to BBVA's white-label offering of online personal financial management tools - further bolstering the argument for PFM as a major new appendage for online banking.

"PFM's critically important, it's a vision of the future of online banking," says Emmett Higdon, a senior analyst at Forrester Research focusing on e-business and channel strategy, who says that about 50 percent of the banks the research firm talks to are interested in PFM, a dramatic expansion from the early days of 2006 when BofA first used its Yodlee-powered MyPortfolio account aggregation service to deliver PFM. BBVA joins a growing group of banks aggressively pursuing PFM that also includes Citi - which is reportedly developing a site with Microsoft.

The BBVA product, called Tu Cuentas ("you count"), is a free PFM tool that was built on top of tech vendor Strands' personal finance product. Launched last year, Tu Cuentas was a fast success for the $783 billion asset bank. In less than a year, the product signed more than 400,000 users, with about 100,000 in just one week. And after introduction, users' time spent on the bank's site doubled. "There's consumer confusion because of the economic downturn, people want new ways to understand their finance...they want to do something more than what they are used to doing," says Atakan Cetinsoy, vp of personal finance products for Strands, who says Strands is also in discussions with ING to offer a similar platform.

Tu Cuentas, currently available in Spain but slated for international expansion, includes graphical representation of customers' financial health, breaks down income and expenses - and charts the evolution of these data points over time to give consumers a view of whether they have done better or worse than planned in a given span. The product also groups transactions into categories and allows consumers to use personal tags if desired as a guide to make financial decisions. Consumers can also be compared to similar peer consumers to put their own financial profile into context.

Additionally, an alert feature allows consumers to configure their own financial alerts - which can be combined with budget goals - and BBVA Tu Cuentas will notify consumers when they cross predefined limits. Tu Cuentas also offers an automatic selection of personalized suggestions such as tips to inform customers before they make spending choices, a short list of most-liked products matching each customer's spending patterns, financial products and services that may better address customer needs and relevant facts and aggregate stats based on community behavior. Future development includes greater use of third-party data to allow users to browse properties for sale or rent, including maps, different traits for properties - presented next to mortgage offers on the site.

Cetinsoy obviously advocates the private label option for banks looking to adopt PFM, saying firms such as Strands and its competitors are faster to adopt new functionality. But banks can also advance the PFM model on behalf independent firms, given banking's depth of transaction history and ability to allow customers to easily navigate from PFM to transactions while online. "Banks are in the best position to offer these tools to consumers who want to consolidate their financial chores and simplify the financial aspect of their lives," says Mark Schwanhausser, a research analyst at Javelin Strategy & Research.

Other PFM providers include Yodlee, which in September launched Yodlee 10, a PFM platform that "surfaces" information such as transactions, account balances and bill reminders in a personalized dashboard. It's also developed add-on widgets including customized themes and views, social features, tax planning and financial planning and advice.

Peter Glyman, co-founder of Geezeo, says his firm will develop its own online banking platform to accompany its PFM tools, which went live at Stanford University's credit union earlier this fall. He adds Geezeo has also built a cross marketing platform for institutions - a bank that wants to offer a HELOC in a targeted fashion, for example, will have access to consumers with a specific profile.

When it was independent, Mint.com didn't offer a white label PFM product to banks, but Intuit's recent acquisition of the successful direct-to-consumer PFM site will propel its functionality into the online banking world via the products offered by Intuit-owned Digital Insight (which already offers FinanceWorks, a Quicken-like online PFM tool). The demand for the service, given the economy, is clear, says Mint founder Aaron Patzer. "Every time the market would drop, our signups would go up. There's almost a direct correlation."

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