Ten months after launching a service that lets consumers comparison- shop for credit cards on the Internet and by telephone, a company calledGetSmart has begun an analogous mortgage service.
"This is the first-ever independent mortgage marketplace," said William Fisher, the company's founder. "We're not a mortgage lender or broker."
Mr. Fisher, a former executive vice president of Wells Fargo & Co. and head of its branch system in Northern California, has become a Web entrepreneur. His 30-person company in Burlingame, Calif., develops marketplaces where consumers can find the financial products best suited to them. In the process, GetSmart gathers information about their preferences- anonymously-and sells it to banks as market research.
GetSmart, a division of BFC (Bill Fisher Co.), is one of a growing number of services that compile consumer options and present them on-line and by telephone.
For example, Auto-by-Tel and Microsoft Corp.'s CarPoint are Internet services matching vehicles and dealers to prospective buyers. Charles Schwab & Co.'s OneSource serves the same purpose for mutual funds, and Intuit Inc. has InsureMarket for insurance products.
In home loans, MortgageMart is a Web site run by a California mortgage banker that aims to match consumers with mortgage lenders near them. And RAM Research Corp., Frederick, Md., operates a site where consumers can find low-interest-rate credit cards in their states. (Unlike the RAM site, which advertises special offers of the day, GetSmart primarily lists standard rates).
But Mr. Fisher calls his approach unique. "It's an actual marketplace rather than a billboard," he said. "Our vision was not to build a library."
Like most Internet enthusiasts, Mr. Fisher, who is chief executive officer of BFC, believes the medium will become a significant delivery channel for financial services. To the doubters, he offers a provocative thought: "By the time television and the Web merge, it will all be one channel."
Mr. Fisher also cites statistics meant to show that consumers are already getting wise to the Web's advantages. To his surprise, he said, 40% of GetSmart customers have been using the Internet to gain access to his credit card service; 60% use the telephone. He had predicted 20% and 80%.
While Mr. Fisher will not say how many people have visited his site or filled out applications, he said he is "on track" to process 100,000 approved credit card applications a month in 1998, plus 20,000 mortgage applications a month.
Mortgage lenders and card issuers pay GetSmart a fee when a consumer applies and is approved. Mr. Fisher described the fee as lower than typical customer acquisition costs. The service is free to consumers, and companies do not pay to be listed.
The credit card marketplace includes 867 products, which Mr. Fisher described as more than "90% of credit cards that are out there." After summoning the GetSmart Web site or calling its toll-free number, consumers are asked to rank their preferences in a credit card-rewards, low fees, multilingual customer service, etc.-and to state their ZIP codes. The data base then presents cards that seem suitable and serves up an account application for each.
On the mortgage side, 68 loan products are available, and Mr. Fisher anticipates offering "100 to 120 separate mortgage products by yearend, covering all the available niches."
"The vision was to put the power of information in consumers' hands," Mr. Fisher said. To get the same comparisons his service makes available, "you would have to call each company individually." To explain andpublicize the service, GetSmart has begun advertising in Money magazine and elsewhere.
David E. Weisman, an electronic commerce analyst at Forrester Research in Cambridge, Mass., said comparison shopping is "something that people will look for on the Internet." He predicted that matchmaking companies and services will "play a role on-line" but that established companies might well beat out "freestanding" ones.
Companies like Intuit and Schwab, with their existing customer bases, have big advantages over newcomers like GetSmart, Mr. Weisman said. "The problem that a lot of these smaller start-ups face is, 'How do I get enough traffic to my site to be able to get enough financial services companies to participate?'" he said.
As for financial institutions, "They're going to have to deal with the fact that there are going to be new intermediaries selling their products for them," Mr. Weisman said.
For consumers, he said, the Internet is "clearly exposing the commodity nature of a lot of financial services products. It's going to be clear that these things are basically the same and that the few differentiators are going to be things like rates and bonuses."
Mr. Fisher disagreed that marketplaces like GetSmart would dull consumers' appreciation of the variety of financial products. On the contrary, he said, by pointing out product nuances, "we think this can slow or reverse the commoditization of the marketplace."
Jerry D. Craft, president and chief executive of Program Management Corp., an Atlanta card portfolio management firm, said services like RAM and GetSmart on the World Wide Web could be good news for banks that have the most appealing products.
"The Web is a great distribution and marketing channel," Mr. Craft said. "It also has the potential to separate out the best issuers real easily for the accomplished user."
Yet the information GetSmart has amassed seems far from exhaustive. On the credit card side, the service seems to include only one card with a cash-back rebate, and it issues the rebate annually (a GetSmart page of tips on credit cards urges browsers to consider cards that pay rebates monthly). People looking for cards with air miles attached will also find limited options.
On the mortgage side, offerings are even patchier. A consumer interested in a loan for a New York City apartment, for instance, will find that none is available (which may come as no surprise to New Yorkers).
Mr. Fisher said the mortgage service is in its infancy. "We started with a product set that fits the widest possible audience," he said. "Although we do intend to offer product sets that will fit co-ops, condos, and mobile homes, we wanted to get out quickly with what matters most to the most people."
By tracking the clicks customers make on the GetSmart Web site and the opinions they express using the telephone service, the company is also building a data base that it has just begun selling to banks.
An advertisement for the service, formally unveiled at last month's American Bankers Association bank card conference-stated that "with thousands of new customers and transactions coming in every hour, the Smart Data Mart is getting smarter every day."
Under a new agreement, SRI Consulting of Menlo Park, Calif., will analyze the data GetSmart collects and compare them to national benchmarks. "We're really excited about it," said Larry Cohen, SRI's director ofconsumer financial decisions. "It's a great chance to witness the expansion of a new medium for financial services."
Mr. Fisher has meanwhile been rounding out his management team. He started the company with senior executives from Wells Fargo, Levi Strauss & Co., and the Mitchell Madison Group. He recently added Tom Proulx, a co- founder of Intuit and author of the first version of Quicken, to his board of directors.
"Where we go next will depend on feedback from financial institutions," Mr. Fisher said.