Several vendors offer personal financial management applications, but banks and credit unions that are among the early movers here say these products are too generic.
Some have pushed their vendors to customize the software, while others have tweaked the applications in-house. The goal, bankers say, is to maintain their lead with this emerging technology by delivering services their rivals cannot easily copy.
"Your Web site should reflect the personality of the organization, and if you go with these cookie-cutter things you really sort of hand that over to somebody else," said Stu Fisher, the senior vice president of e-commerce for Addison Avenue Federal Credit Union. "I don't think people should do that with their branches — just stamp them out so that they all look the same and they are undifferentiated — but somehow when it comes to the Web we tend to do that."
Addison Avenue, of Palo Alto, Calif., is preparing to roll out by September a financial management product based on technology from two vendors; it is adapting software from Jwaala to develop the basic tools to help its members monitor deposits and track spending, and is adding community features developed by Wesabe Inc.
Fisher said that working with two vendors is a challenge, but the credit union wanted to create a unique financial management product. "We've chosen to take a bit of a harder road in getting this work done but feel that, at the end of it, it should reflect the personality of Addison Avenue," he said.
Mark Schwanhausser, a research analyst for Javelin Strategy and Research in Pleasanton, Calif., said Addison Avenue and other financial companies working on financial management tools now are in the vanguard but would quickly lose their advantage over the competition if they relied on off-the-shelf products.
"The barrier is much lower to being able to match" a rival that hasn't customized the software, he said. "The whole goal, in many cases, is to be distinctive."
Banks have tried in the past to introduce personal financial management tools, but these earlier efforts gained little traction, largely because they offered few of the features that are becoming popular now.
The products, then and now, are typically based on aggregation technology, which presents in one place account data from various financial companies. But the earlier products did little to show consumers how to interpret this information.
In the past two years, Web sites operated by nonbank providers such as Wesabe and Mint Software Inc. have become popular destinations for consumers who want to keep tabs on their finances; these companies use aggregation technology originally developed for banks to gather users' financial details and then apply their own software to help people make sense of the data.
Joe Polverari, the senior vice president of strategy and development for the technology vendor Yodlee Inc., said this combination is helping financial management tools catch on with mainstream users, and that many banks are taking the same approach. (Mint is a Yodlee client.)
Polverari agreed that banks need to differentiate their offerings. If they thought that offering generic personal financial management tools was all it took to satisfy their customers, "they would just put up the hosted solution as fast as they could, and market it as quickly as they possibly could and be satisfied with the result," he said.
