SpringCoin Bridges Gap Between PFM and Debt Coaches

As consumers look to shore up their financial wellness following years of recession-based distress, more startups are hitting the market with different flavors of personal financial management tools.

One of the latest entrants, SpringCoin, offers automated personalized coaching to help consumers reduce debt. The firm, which sells consumer direct services as well as white label partnerships, is targeting what it sees as an opening between PFM firms that offer access to transactional data and user-driven budgeting tools, and traditional debt counseling firms that SpringCoin claims don't adequately leverage new data as part of their services.

"Credit counselors aren't taking advantage of the new technology that is available," says John Sun, CEO of SpringCoin. "You have to make real-time recommendations today, rather than sitting down with someone every few months to talk through your position. "We can offer feedback on a regular basis."

The SpringCoin platform was built by a debt management tech firm called DebtEye, which is rebranding as SpringCoin with the product's release.

SpringCoin works a bit like a personal financial management tool, combined with customized tips and action items to improve personal financial performance. Through an internally built platform and account aggregation from Yodlee, the site displays account information and transaction histories and makes debt-reduction suggestions that become more detailed and personalized over time as the consumer uses the service and accumulates new transaction data. "We use and automate a lot of best practices from credit counseling, such as how to budget, with advice on spending categories," says Sun.

SpringCoin charges $8 per month and offers real-time feedback linked to a consumer's progress toward financial goals. It also offers weekly challenges and quizzes as part of a suite of educational tools.

"It tells you if you are heavy in some spending categories and light on others, for instance if you are spending too much on entertainment, it will recommend ways to reduce that," Sun says.

SpringCoin plans to offer the service as part of a pilot with credit unions in the Bay Area; it's also targeting banks with its white label services.

SpringCoin believes it has a substantial market to tap. The Corporation for Enterprise Development reports more than a quarter of all households lack the funds to cover three months of basic expenses if they were to lose their income, and that more than 40 percent of households are one unexpected financial event away from having to carry high interest debt.

In addition to debt consultants, SpringCoin would also be a competitor to PFM firms like Geezeo and Mint.com, and companies like SmartyPig that use social networking as part of a strategy in which consumers set and work toward financial goals. "[PFMs] are good for people who like looking at bank statements, but they're not good when you're in a negative situation," Sun says.

Among competitors, Geezeo Chief Marketing Officer Bryan Clagett says, "we see our integrated marketing platform supporting a wide variety of messaging opportunities, to help financial institutions demonstrate advocacy. We have always viewed PFM as a data centric tool that needs to be leveraged by FIs to help consumers make the most of their money. It makes perfect sense from a debt management and wealth management perspective."

Mint.com, which didn't return requests for comment, on Tuesday began partnering with DailyWorth, a financial management site for women. Mint.com will include financial advice from DailyWorth, and vice versa.