When financial technology developers at startup companies began asking Yodlee for help with ideas for new apps, the company took a page from large software developers: it started an incubator program.

"We saw a lot of interesting companies to whom we could give access to different technology, some coaching and [potentially] distribution to banks," says Joe Polverari, general manager of Yodlee Interactive, an offshoot of Yodlee that provides the platform's application programming interfaces (APIs) to FinApp developers. FinApps are software applications developed by new and existing companies that run on Yodlee's platform.

This month, Yodlee expanded its incubator into a three-phase program called NEXT. The three phases are incubation, acceleration and cultivation.

The original program was designed to help select entrepreneurs develop their concepts, spark innovation within financial services and potentially land Yodlee, a company that counts large banks like Bank of America and Citibank and direct-to-consumer companies like Personal Capital and Credit Karma as partners, more users.

For about the past year and a half, the California company has offered chosen developers six months free access to its API (which provides permission-based access to transaction level financial data), mentorship and other perks tailored to the participant in what it calls the incubator program. The program requires entrepreneurs to apply and has a 20:1 ratio of acceptance, but participants do not have to cough up equity, nor is there a set end date.

"We intentionally wanted a more open-ended system," says Polverari.

Early-stage startups chosen are evaluated on the power of their ideas, potential value to financial services and/or commerce, the strength of their business models and their ability to benefit from the Yodlee Platform.

Since the launch, 16 companies have participated in the program and Yodlee has made a small investment in two participating companies. It's also learned how to tweak the program to better satisfy developers.

"People said they want more," says Polverari.

Yodlee Interactive's extension to its existing incubator program includes hosting formal mix-and -mingles for press, developers and investors at organized events. One gathering recently took place in San Francisco at a Giants game. The next one is slated to take place this fall in New York.

By yearend, Yodlee plans to add another wrinkle to its program: those who have benefited from the incubator will be asked to help mentor the next batch of newbies. "It's an interesting case study to get smart developers and entrepreneurs in a space for an industry that has lacked innovation," he says.

The expansion of Yodlee's program comes at a time when accelerators designed for fintech companies are slowly emerging and banks are launching their own app stores.

The tiptoeing trend of banks and their vendors offering support to outside developers points to a desperate need to innovate the industry. "Banks are struggling to figure out what customers want," says Stessa Cohen, Gartner research director. "How do you innovate in a legacy environment like banking?...The industry is looking for new ways to generate ideas."

Yodlee points out it can help startups — or entrepreneurs whipping up apps in their garages — learn from its experience and gain coveted connections.

Existing incubator participants praise Yodlee's program for its mentoring.

"It's been amazing. Everyone in the company is flexible and supportive," says Mike Vichich, chief executive of Glyph, a card rewards startup. "If we have any questions, they get answered.

Another participant, PFM startup Planwise, has also been pleased.

Niall Wells, business co-founder of Planwise, says the ability to ideate, build the product and share knowledge with fellow startups helps make for a short feedback cycle and product innovation. Wells says Yodlee is proactive with its partners (which includes companies already working with its data, proposing to work with it or being incubated by Yodlee) to form networks with like-minded individuals striving to innovate and credits the program for its growth.

Banks struggle to work with small companies directly, and the cost of working with startups can be a deterrent.

"A lot of times, banks need solutions to come through their current providers," says Jim Bruene, author of NetBanker blog and founder of Finovate. "That model isn't going away anytime soon."

He's observed the need for such training programs. "Startups need to know how banks think so they can build the right thing and sell it to banks," Bruene says.

The next batch of Yodlee incubator hopefuls were made public this August. They include PFM startup Persint; Rental Kharma, which provides software designed to help renters build their credit; Retail Intel, which offers a tool meant to improve merchants' analytics; and StockSmart, a startup that's designing software to improve stock selection and portfolio management.