Wesabe Inc. has developed an iPhone version of its software that lets banks offer financial management tools under their own brands.
The San Francisco company is expecting to receive approval today to market the personal financial management application through Apple Inc.'s App Store directly to iPhone users. Wesabe also plans to offer a white-label version that banks can offer under their own brand to their customers to keep track of accounts.
Though many companies offer mobile banking services, downloadable applications offered through Apple's App Store are less common. Financial companies that do offer such tools, including Bank of America Corp. and eBay Inc.'s PayPal, say the applications are popular — PayPal said in January that the launch of its iPhone application last year caused its mobile payment volume to quadruple.
Bankers want "some contact with customers when they are not just sitting in front of their computers," Marc Hedlund, Wesabe's co-founder and chief executive, said in an interview last week.
Wesabe already offers its financial management technology directly to consumers online, along with a version that banks can offer through their Web sites. The software enables users to keep track of their deposits and purchases through multiple bank, investment and credit card accounts.
The iPhone application lets Wesabe users access their account data with their phones.
Banks that offer Wesabe's software through their Web sites can also purchase and brand the iPhone application.
The Wesabe-branded version of the iPhone application, like many financial management tools, will not let users move funds between accounts.
However, Hedlund said Wesabe has written code that would let banks customize the software with additional features, including payment-related ones; the most frequently requested feature from prospective bank customers is an automated teller machine finder, which is not included in the Wesabe-branded version.
"We think that financial institutions will be able to provide a better experience than Wesabe can provide on our own," he said.
Hedlund said some of the features, such as a chart that show users' spending and saving trends, should help Wesabe win bank customers.
"What people are coming to us for is not, 'Can you do transaction processing for us?' Because that's not what we're known for," he said. "What they're coming to us for is, 'Can you speak to our customers? Can you tell us how to do better with talking to the needs of our customers in this economy?' "
People can also add labels to specific transactions to help them keep track of where they are spending their money, and the application can link to the iPhone's location features to show nearby merchants, whose name can also be attached to purchases.
In an upcoming version, users will have access to a mobile version of Wesabe's Web community, where people share financial tips.
In the next update, Wesabe plans to allow users to view their investment accounts, which are visible today in the online version. In a later update, Wesabe plans to turn the application into an "uploader" that lets users store their bank passwords on the phone instead of on a Wesabe computer.
Wesabe expects to announce its first bank customer Tuesday, though Hedlund would not name it. He said the customer has signed on for all of Wesabe's technology, including the mobile application.
Ron Shevlin, a senior analyst at Aite Group LLC of Boston, said Wesabe's application will hold the most appeal for banks that are considering adding personal financial management elements to their Web site but have not chosen a provider.
"If you're a bank and you are going to partner with an external PFM provider, you want to be sure that you're dealing with somebody who's got the technology capability to expand and be innovative into new areas," he said.
By focusing on the iPhone, Wesabe can help banks reach a younger audience that is more receptive to mobile banking than users of other phones, Shevlin said. "The iPhone is a better device than most other smart phones," and users "try to make it a part of their lives."
Despite these advantages, some banks may be hesitant to adopt the technology, Shevlin said.
"It still comes back to the bank saying, 'How do we monetize this?'" he said. "It's a leap of faith to the banks to say, 'We're going to offer this to the consumers, and they're going to love us and do more business with us and never leave us.' It's a leap of faith because they've been down this road so many times: online banking, online bill pay, e-bills. Every little thing that's come along … they have a huge challenge in figuring out what's the real business model here."
In Wesabe's favor, Shevlin said even if the business case is difficult, banks do need to embrace the sort of technology it offers.
"A major thing that the banks need to have been doing all along is providing more value to customers about how they manage their money and financial lives and not simply offering them checking accounts and savings accounts," he said.
