PFM discussion at BarCampBank SF

The following are my rough notes typed during session two of BarCampBankSF, held in the Wozniak Lounge of the UC Berkeley campus. BarCampBank SF was an unconference devoted to innovation in personal finance. Here is the wiki page and the CrowdVine page. More photos can be found on the BCBSF Flickr Group. Attendance was around 60 people, including Andy Kaufman who found out about the event that morning at 9 am (because someone who had already arrived was twittering about it), and arrived in time for the last two sessions of the day.

One of the most remarkable things about this session is that we had several different Personal Financial Management (PFM) companies represented at one table, along with two companies in the personal retirement/net worth site category. (And Zopa, and someone who formerly worked for a personal finance division of Yahoo!) While there was a small amount of guardedness re: business plans, there were also a lot of kudos given, and much sharing of ideas. This was probably mostly due to the consensus that this type of site is just in its infancy.

Personal Financial Management Sites session (Session two of the day)

Areas to be discussed during this session:
1 – account aggregation
2 – making it simple
3 – customization
4 – mobile
5 – security

Notes from what was actually discussed:
Let’s introduce all the PFM companies here at the table:
• Expensr – build awareness for each user – compare expenses to people like me
– tag yourself — manually enter or bank ofx download
• Wesabe – Prospective tool, helps you going forward (compared to Quicken is rearview mirror)
– banks think of PFM as a tool to sell more products to customers, lock them in, etc.
– Wesabe really wants to help people
• Networth IQ — track your net worth – track, share, compare your networth
(Also at table: Boulevardr, VaultStreet)

Other PFMs not here:
• Geezeo
• Mint – the positive about Mint: drives through to a result

Wesabe & Expensr, shoot for a positive customer result FIRST, unlike Mint which built the right side of Google before the left side

users want to analyze data – in a consumer form –

what’s the value proposition of PFM sites?

difference in these types of tools for investment vs expenses – who am I comparing to? large, global community versus small tight-knit community like me

different people in different life stages and income want different things out of these tools
(college students budgeting pizza and beer vs. older folks looking at financing kids’ college)

trust level with the PFM tools- younger professionals totally trust, not a big issue. Issue is for older folks.

with Wesabe – security – decouple person’s name from financial data
Jason is worried about one security corruption by ANY one PFM company blows up the entire industry

what is the ideal way that transactions SHOULD work for PFM sites?

Jason -wesabe – wants customer transaction to belong to CUSTOMER – token given to Wesabe once by customer so that bank then gives JUST transactional data to Wesabe and nothing else
suggestion: why not create a consortium of PFM’s for this platform of interoperability standards (BITS – banking industry technology secretary) bitsinfo.org

Credit card companies – don’t know Expensr and PFMs exist
Wesabe – big banks know this is happening, some things are great about it, some things they wish they could make go away

Yodlee – good at building sucky tools. Yodlee plateaued at 1 million users

Jason – what is a PFM tool at end of day? Decision support tool. Interested in helping people make good decisions about money. helping people about making good financial decisions. Overcome ability to actually transact (like bill pay)

People don’t like to manage money. how do we overcome inertia?

Is Wesabe and PFMs where it’s going?

Jason – people aren’t going to chose their bank based on PFM (ie Mint is wrong/bad)

Banks have snouts in trough with customer fees – banks will eventually have to take snouts out of trough and actually help people with their money

Jwalla PFM – through CU online banking side

PFMs will be like Bill Pay is now – another tool/product, which hooks you into the instutuion so the customer won’t leave

Wesabe in discussions to partner with CUs

Takes forever to get trusted in the financial space – Yahoo didn’t have that. – at the end of the day made by brand name is all that matters, even when product is inferior

PFM only at the very very beginning of what this space is/will be (Wesabe, Expensr etc)

Social aspect is where it’s at (for both Wesabe, Expensr) (not about wizards and tools) community gives emotion, sticky & voyeuristic

Life events are what drive people to PFM (graduation, marriage, etc), not bottoming out

How do we make PFM fun? video game-like? what’s the pain point? notifications that are in my best interest. get rid of pain, maximize opportunity