Plenty of banks are incorporating personal financial management software into their Web sites, but Geezeo Inc. wants to convince them that the technology is not just an add-on feature — it should be the heart of an online banking service.
Standard online sites let customers view transactions and other activity in their accounts. PFM software does that and a lot more, and Geezeo is betting its future that firms will agree that their Web sites should evolve into financial management services.
"There's a strong demand in the market for a next-gen online banking platform that has integrated personal finance management," Peter Glyman, a Geezeo co-founder, said in an interview. "At more and more clients that we talk to, people want that Geezeo dashboard … to be front and center, not secondary to the online banking experience."
The Framingham, Mass., company got its start offering online PFM services to consumers for free, and this year began selling a version of its software that banks could integrate into their Web sites. Now it is developing its own online banking application that looks and functions like a PFM product, and which it expects to introduce in the first quarter.
Last week Geezeo announced a deal designed to help its transformation into an online banking company. Under the agreement Geezeo will integrate bill-payment software from iPay Technologies LLC into its own product.
As part of Geezeo's reinvention effort, next quarter it will drop its free consumer PFM Web site. That site was the company's only service from 2007, when the site went live, to early 2009, when Geezeo began selling software to financial institutions.
"We proved our ability to be successful with the direct-to-consumer model, but in terms of focus, and especially being a smaller company, we need to put our resources very specifically on the tasks at hand — and anything that distracts us from that is a problem," Glyman said.
Consumers who already have accounts with Geezeo would get to keep their accounts, but the company would not accept new ones after it transitions to its new business model.
PFM applications typically aggregate banking data from multiple accounts, and give users a clear picture of their financial situation. Most of these tools use this information to help people track their spending and plan budgets — for example, showing someone how much he spends in a month at restaurants or on groceries.
This is an improvement over basic online banking services that show people their recent transactions but cannot analyze the spending data, Glyman said.
Edward R. Woods, the principal at Mindful Insights LLC, a research firm in Portland, Ore., said many banks have realized that there is little to differentiate most online services, and they are looking for ways to improve their sites.
Some bankers "look at PFM to help them to achieve that goal for consumers, and that can only happen from an integrated experience" that makes the financial management capabilities the main function of their services, he said.
However, Geezeo will face stiff competition from older and more entrenched vendors. "It's a very competitive market with long sales cycles," Woods said, though Geezeo "will be highly differentiated from the others."
Geezeo and other providers of free, online PFM services have had trouble finding a viable business model, Woods said. Mint Software Inc., one of Geezeo's rivals, was sold to Intuit Corp. last week.
"Online PFM vendors, I think for them to survive, they have to do something different from what they are doing today," Woods said. Geezeo's plan "is the best way for them to have control of their own destiny."
