Quicken Online - The 800-lb. PFM Gorilla (Part 1)

This week, Intuit officially launched Quicken Online, an web-based version of their popular Personal Financial Management (PFM) software. “Wait a minute,” you say. “Doesn’t Intuit already have a web-based product offering? What about Quicken.com?” True. Intuit does offer an online view of your accounts at Quicken.com. However, it was not a stand-alone product - it synced with the user’s copy of Quicken residing on their desktop. If you didn’t use the desktop version, then you could not view your accounts at Quicken.com. Quicken Online is a different beast altogether - it offers the account aggregation features to link up your bank accounts into one view. It also offers a robust alerts and messaging function to inform you when you are approaching an overdraft situation. You access it from any browser, including most mobile devices. All for $3 per month

Intuit’s product announcement has significant market implications for PFM software and, more importantly, online banking. This posting will cover the impact on PFM. Our next posting will describe the impact to online banking.

The impact on personal finance management software
The world of PFM tools has stagnated on the desktop over the past decade. If we roll back the clock to mid-2006 and took a scan of the marketplace for web-based PFMs, there were no credible replacements for desktop versions of Quicken or MS-Money. Keep in mind that this is the same period in which the first full, robust, AJAX-enriched Web 2.0 apps (Google Docs, Zoho Suite) were launched. The .OFX file format for financial data exchange had been well established (Yodlee has performed account aggregation for years before abandoning the consumer model and going as a white-label service for banks). In other words, between AJAX and .OFX, we now had the technology to replicate the desktop user experience found on Quicken and MS-Money. So....where were the Web 2.0 newcomers to the PFM space?

To fill this obvious gap in the market, several Web 2.0 startups emerged. Most notable are Mint, Geezeo, and Wesabe (you can go to NetBanker to keep up with the growing list of entrants). Most of these startups offer PFM functionality for free. Their business models are along the lines of banner ads and/or referral fees (e.g., Mint’s “suggests” that you can find a lower credit card interest rate with ING). Some of them have very compelling user experiences, chock full of AJAX and Flex widgets and components. In short, they go far to replicate much of the user experience currently found on desktop versions of Quicken.

Quicken Online’s initial release is very limited - account aggregation and minders/alerts are the key features. Intuit’s Product Manager, Jim Del Favero, indicates that their target audience are Millennials (young adults in their 20s to 30s), who are focused on “knowing” their current balance versus trying to plan for retirement. We expect Intuit to flesh out this product with enhanced functionality that will appeal to other target audiences. In the meantime, the Mints and Geezeos of the world are obviously worried how Quicken Online will attract their users, partners and advertisers.

Our opinion is that the newcomers should continue to focus on refining their user experience, while Quicken Online plays catch-up. For example, Mint’s auto-categorization of transactions still needs help. Same goes for cross-browser quirkiness. UX development is no trivial feat - it takes months to develop and test AJAX and Flex apps. As long as the Web 2.0 newcomers can continue to deliver a superior UX, they have a chance at winning in the online PFM space.

Our next posting will describe Quicken Online's potential impact to online banking.

Howdy

In this blog we will cover topics that are near and dear to our consulting, design and development hearts:

• Web 2.0 product strategy - leveraging existing intellectual property to create new product/service offerings, mashups, SaaS
  
• User Experience design - graphic design, interaction models, information architecture
  
• New venture creation - the art and science of birthing a new business
  
• Application development - trends in AJAX, Flex, Silverlight to develop compelling user experiences
  

Because this is a two-way dialogue, we look forward to hearing your comments and insights.

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