The app store concept is already giving a development boost to small banks and credit unions, and Yodlee is using its considerable account aggregation heft to providing a venue for new and existing tech firms to develop, grow and deliver new applications.
The tech firm powers much of the personal financial management (PFM) marketplace, giving it a data management and analysis engine that includes millions of records of financial transactions. The company has started a new unit called Yodlee Interactive that offers an Accelerator program for new tech applications, or FinApps, developed by new and existing companies. It also offers an Incubator program for startups to develop new technology and benefit from Yodlee's distribution network and access to financial institutions.
"We can switch you on and you can start developing right away," says Joe Polverari, Yodlee's chief strategy officer. "And you can find out if your financial app can have value in the money management space or a related field. We'll put you on a platform that doesn't cost you a thing and you can develop and think about how your tech can make sense [in the market]."
The Yodlee Interactive application programming interface (API) provides permission-based access to transaction level financial data covering bank accounts, insurance, rewards programs and investment accounts across multiple channels. "We have a deep domain expertise in payments and success in delivering products to the bank channel," Polverari says.
Polverari says in addition to Yodlee's growth in its financial institution PFM business, it's also been able to expand its non-bank FinApp business in recent years, which forms the basis of Yodlee Interactive.
Yodlee Interactive has already signed up more than 200 customers and 300 registered FinApp development partners, including H&R Block, Concur, LearnVest and Zoho.
Yodlee Interactive's Accelerator program allows companies of any size or development phase to license and develop for free, following an initial screening. The Incubator program also provides development access and assistance, which in some cases includes distribution and other support.
The first two publically released firms to use the Incubator program are MyRewardsTree and miiCard. MyRewardsTree is a destination site and a future Yodlee FinApp. It lets consumers and small businesses organize loyalty programs, as well as locate and optimize rewards programs that have been underutilized.
"[A large portion] of the value of rewards programs gets wasted," Polverari says. "MyRewardsTree helps a firm find out what those programs are, where the accounts are and how to leverage those programs to a greater effect."
Another firm, miiCard, uses the Yodlee platform to deliver a federated identity. miiCard lets web users prove their identities in a completely digital format, which can be used for account openings and general fraud prevention. The product is currently available as a consumer managed digital passport. A financial institution-driven risk management version of miiCard will be available in the U.S. and Europe this summer.
"If you are a fraudster, you won't have the history of transactions so you won't have the ability to prove you are who you say you are," Polverari says, adding the longer trail of transactions is "highly predictive" in identity management.
For Yodlee, the benefits include the broad participation of other firms, which adds more data and analysis power to its aggregation and data management engines. Yodlee sees the participating tech firms as partners, and is not planning to take an actual financial stake in the new tech firms, though thte company has not ruled it out. "If there's something that's a little less obvious [in terms of developing market potential], or if it's a different feature or function, it may require more support and resources and we may want to participate," Polverari says. "But that's not the idea. The payoff for Yodlee is the services are being powered on our platform, and that's good for us."
Other efforts to bring the "app store" concept to financial tech development include Open Solutions, a Yodlee partner whose app store model has attracted hundreds of community banks and credit unions to build, share and sell lower cost tech products.