Financial management tools are becoming more common on Web banking sites, but smaller banks have smaller budgets and fewer options when it comes to buying them.
Yodlee, a Redwood City, Calif., company, developed its PFM tools for big banks and only sells directly to 200 of the largest U.S. financial companies; last year it struck deals enabling S1 Corp. and CBG Holdings Inc.'s Q2 Software Inc. to resell its products to smaller banks as part of their own online banking software.
However, it is those partners — not the banks they target — that decide which features of Yodlee's software to integrate into their products, an approach that means banks cannot request specific capabilities that might especially appeal to their customers.
First Bank, a Troy, N.C., unit of First Bancorp, which has used Yodlee's software through both the S1 system and Q2's (it switched to the latter in April), said that banks do not want a one-size-fits-all product.
"Nobody wants to be a me-too," said Cathy Dudley, a senior vice president at First Bank.
But Dudley said her $3.5 billion-asset company's budget gives her little choice. "Banks the size of First Bank and under, we're going to have to go toward buying something off the shelf," she said.
Joe Polverari, Yodlee's senior vice president of strategy and development, said that it offers the same version of its financial management software to both large and small banks. But "if you're a smaller bank, you can't configure exactly as you would a larger bank," he said. The vendors Yodlee sells through "sort of have to pick what they think the best mix of features and functions is" for their clients.
Yodlee is still in "version one" of its small-bank strategy, he said, and is revising its software so its online banking partners need not filter out features their small-bank clients may want.
Dudley said First Bank was pleased enough with Yodlee's software that it chose to upgrade it as part of First's transition to Q2. "We really want to try to have the same kind of products that our customers would expect from larger banks," she said. On S1, the banking company used a more basic version of Yodlee's software, which did account aggregation but lacked the tools to analyze the added financial data.
Her main gripe is that the PFM software is not presented as a seamless part of the online banking experience.
First Bank is not yet promoting it, but many customers have found it on their own. This speaks to the appeal of the product, she said, but enrollment would be even higher if the features were more visible.
"Customers don't want to go there and click and click and click" to get to the tools, she said.
Polverari said that Yodlee plans to introduce an updated version of the software within three months and that it should let small banks better customize the product.
Ultimately, Yodlee wants to put customization in the hands of the end user, so individuals decide which features to include and which to omit. Bank-level customization will come first, he said.
"What you'll be able to do tomorrow is really sort of leave it more up to the individual bank, whatever the size, to pick and choose what's represented in their PFM solution," he said.
