Currently, the Visa Mobile Android application is available for select Chase Visa cardholders who use the T-Mobile G1 handset.

Are Mobile Financial Apps Safe?

As great as the Visa mobile app sounds, those over at Phandroid discovered something in the fine print that sounded a little troubling. Buried in the terms of service, there is a line that reads:

"...unfortunately, no data transmission via a mobile handset can be guaranteed to be 100% secure."

Of course, nothing is 100% secure these days - that's a given - but what does this mean for consumers using the application? Is Visa trying to cover themselves in case of any liability? That's the conclusion Phandroid come to. Visa is probably just trying to make sure that they aren't held responsible in case an error on T-Mobile's part leads to a data breach of some kind.

Still, it's interesting to read how the original press release about the application had an entirely different message. In it, there was a statement from Elizabeth Buse, Global Head of Product at Visa, where she noted that the mobile application "makes the consumer payment experience more convenient, more secure and more rewarding."

It's probably nothing to worry about, but the tone of concern in blog posts reminds us of the fears that people had when online shopping, banking, and bill pay services were first introduced. If you'll recall, there was an initial period of skepticism about the safety and security of performing financial transactions over the internet. The next frontier for fighting those same concerns may be mobile. Will consumers fear that mobile apps managing their financial data are insecure, too?

Making Mobile Mobile Secure

Consumers may have good reason to be hesitant though, and not because of Visa's pseudo-CYA line in their Terms of Service, but because mobile phones are often lost or stolen. If you're managing your financial data through mobile applications, there need to be some safeguards in place so that thieves can't access your credit card numbers and steal your identity just by snagging your phone.

We would also love to see remote backup and shutdown features built into applications such as these in the future which would allow you to quickly deactivate the app remotely in the event your phone goes missing. Even better, why aren't handsets manufacturers building these features into their phones? That would be a huge selling point for consumers when shopping for a new device.

It's not as if the technology doesn't exist. For example, at this year's DEMO conference, a startup called Maverick Mobile demonstrated a mobile security application that backs up your phone book and messages remotely in the event you lose your phone. It can also send activity reports via SMS as to what was happening with the handset - like if it was being registered to a new carrier and who that carrier was. It even let you remotely lock the phone or pester the thief with a loud alarm that couldn't be disabled without removing the battery.

We think more applications like that should be introduced to guarantee the safety and security of our mobile devices before we're hit with a ton of mobile apps for managing our finances. It would definitely make us feel more comfortable. Still, it's good to see innovation taking place when it comes to what these smartphones can do. An app like that from Visa means we're only one step away from actually being able to use our phones to make purchases...and that's really something to look forward to.

In addition to displaying account balances, this new gadget, now available for download from Fidelity Labs, can also be configured to display alerts on certain account-related activities, including trade notifications and price trigger alerts. Customers can choose to either add the Secure Gadget as a standalone gadget or they can click a button to add a customized Fidelity Tab to their iGoogle. The tab includes the gadget itself, plus two RSS feeds from Fidelity: Fidelity Investor's Weekly and Fidelity Investment Insight Podcast.

Fidelity iGoogle tab (click to view larger):

To use the gadget, customers log in using their SSN or Customer ID and PIN, as they would do online. That information is not saved on Google's servers on any other 3rd party servers, says Fidelity.

The Fidelity Labs web site states that they developed the gadget, but it looks to us like it came from WorkLight, an enterprise 2.0 startup whose banking 2.0 survey data we reviewed earlier this year. At that time, the survey results showed that nearly half of the respondents said they would use web 2.0 tools if offered by their current bank. We also took note of the secure banking gadgets they had under development - gadgets that greatly resemble this one from Fidelity - which we considered to be very promising technology.

The release of Fidelity's gadget may hint at the beginnings of a new trend in banking - making banking 2.0 mainstream. Along with numerous web 2.0 services for managing finances, many of today's banking customers can manage their money from their mobile phones while other customers are receiving personalized recommendations on their iPhones, as well. However, none of the services offered so far have the potential for mainstreaming banking 2.0 the way a Google homepage gadget could. It's already a technology most everyone is familiar with and it's being offered by the financial institution itself, which should help customers feel comfortable about its security. We hope more financial institutions will start offering gadgets of their own in the near future.

The proliferation of these types of apps would have you believe there's a big demand for web-based financial tools. But is there really? We would hope so, considering how their advanced technology can provide detailed analysis about your money (or lack thereof). However, we secretly wondered if the only people logging in to sites like Mint.com and the like are the young kids of Gen Y. Do adults with mortgages, credit card debt, and 401Ks even know how to use these tools?

To find out who's using the banking 2.0 tools and why, we started with Mint.com, who recently gave us a peek into their company's data. As VentureBeat noted, Mint.com's nearly 500,000 users are cutting down on expenses - they've spent an average of $300 less per month in August than in January this year, a 6% drop. However, they believed that early users of this site and those like it were sure to be younger and more tech-savvy. We believe they are tech-savvy, too, since it does require the use of computer and browser, and we know that not everyone can handle such complications. But we wondered: how young are the users really? 

Mint.com Is Slowly Aging

Although Mint.com doesn't require you to fill out anything more than a zip code and email address in order to sign up, they've conducted multiple user surveys in order to get a grasp on their company's demographic data. The end result of those surveys has given them a good idea of who uses the site.

Mint.com admits that they, as a web company, did indeed "launch young." In the beginning, their audience was primarily Generation Y. However, over the past year, their user base has been gradually aging. At launch, the average age of the user on the site was 27, the same as their CEO at the time, Aaron Patzer. Today, the average age is 28, only a year higher, a year later. So are they really growing up?

Maybe they're not aging overall as a site, but when you look at the breakdowns by age range, you can see that some of the older age groups are trending upwards. Look at the 40-year-olds and up, for example - there is some growth to be seen there. Below, you can see a chart that tracks changes between September, 2007 and July, 2008:

Another trend that points to the aging of Mint users is the fact that more users now report owning their primary residence. In December 2007, that number was 39%. Today, 43% report that they own their own home.

Why It Works: You Can Actually Save Money

When we first reported Mint.com's announcement that they had saved users over $100 million while managing $12 billion in transactions, some of you were skeptical. But the company is maintaining those numbers are accurate. This is in part to due the fact that when you take into consideration the number of accounts maintained at Mint (checking, savings, credit card, 401K, mortgages, car loans, etc.) and the number of users (now about half a million), it isn't very hard to push that number up. However, it's also high thanks to Mint.com's wealthier-than-the-average-American user base. As of July 2008, the user's average income level was over $100,000/year and 39% had investment assets over $50,000.

But that's not to say that Mint is only a tool for the wealthy tech elite - anyone can save money with the service. According to a company representative, 1 out of every 10 Mint.com users changes accounts after signing up for the service. This means that those users are tapping into Mint.com's feature where the service recommends them a better offer. For example, a person with a credit card who charges a lot of airline tickets might be offered a different card with travel points. Another person might be recommended to switch from their Bank of America savings account to ING where they would get a better rate, perhaps. And yet another person might be recommended a credit card with a lower rate. And don't be mistaken - those recommendations aren't simply taking into account the introductory period where the credit card company slashes the rate to entice you, but looks at the credit card rate over the course of an entire year before determining whether it would really save the user money.

What About The Other Startups In This Space?

Given Mint.com's user base of around 500,000 and their traffic numbers, they are one of the biggest, if not the biggest, personal finance/money management web service. They achieved this growth through smart advertising campaigns that reached out to the mainstream, especially women, in magazines like SELF, Real Simple, and Reader's Digest. That appeared to have worked - today, 40% of new users on the site are women - that's a much higher number than back in 2007, when only 15% of the users were female.

So, what about the others? We reached out to some of the other banking 2.0 sites to see what sort of data they had, too. Out of the ten apps we previously featured, only Wesabe, Rudder, Geezeo, Xero, and Expensr had data on hand. iThryv is still preparing to launch and the rest did not respond to our request.

Here's how those sites compared:

Wesabe

• Over 100,000 users
• 56% male, 44% female
• Median income: $60-80K
• Age: 60% are 30 or younger
• Misc. - 75% have a college degree or higher, 43% are married

Rudder

• The company just launched at DEMO last month, but already have 15,000 users.
• They don't collect demographic info.

Geezeo

• 30,000 users
• 54% male, 46% female
• 30% 18 - 34 years old
• 38% 35 - 49 years old
• Site attracts less affluent users
• More info here

Xero

• Xero has 2200 paying customers
• Their number of customers has grown 132% since March 31, 2008
• Xero will not disclose demographic data.

Expensr

• 25,000 users
• Users in their 20's: 66%
• Users in their 30's: 24%

Great Tools, Now If Only Banks Would Tell People They Existed...

Overall, we can tell there are some general trends here - banking 2.0 sites are still young, but are starting to gain traction among older users. More women are starting to use these applications which makes sense, give that they are typically the ones holding the household purse strings.

However, we think that there should be more of a push by financial institutions to recommend these types of tools to their customers, instead of sticking with the old stand-bys that include desktop software applications like Quicken. As Alistair Newton, Research VP and Industry Services Director at Gartner noted earlier this year, "with banks coming under increasing pressure to deliver a range of short-term cost savings, the ways that banks interact with their customers will become increasingly important in managing costs downwards. There are a variety of ways in which banks can help customers save money and better manage their exposure to debt while saving the bank money by encouraging greater use of self-service applications."

Gartner also maintains that communities such as Mint.com, Wesabe, and Geezeo can be of long-term benefit to banks, especially as they help the more debt-exposed clients to manage their funds more effectively.

We couldn't agree more. Our hope is that in light of the country's economic meltdown, these apps will get the push they deserve.

Image credit: Cash, courtesy of: spcbrass

These sites aren't just simplified versions of our former desktop apps, either. Instead, they offer a number of features that take advantage of their "always on" status. Forget downloading updates and typing in your transactions line-by-line, these new banking 2.0 sites can offer you better insight into your financial situation with no additional effort on your part beyond just logging in.

Mint

Mint.com may be the most popular of the online banking apps today...or perhaps it's just the most hyped. The site currently claims to serve nearly 400,000 users, manages over $12 billion in transactions, and has saved $100 million+ for its users. On Mint.com, you can manage your bank account, credit card accounts, loans, brokerage and investment accounts, and more. The site also provides guides that can help you make big financial decisions like buying a new car or home. The feature which makes Mint unique is their ability to scan through your bank account and credit card transactions in order to help you find savings. They do this by matching you up with offers for new credit cards with lower rates or by negotiating a lower rate with your current company.

Wesabe

Wesabe takes what's normally a private activity - financial management - and makes it social. Like other online banking apps, Wesabe lets you see all your bank accounts and credit cards in one place. You can categorize your transactions and see spending and earning summaries. Where Wesabe is different is that it takes your data, anonymizes it, and shares it with the Wesabe community. That aggregate data is then analyzed for patterns and those results are shared with everyone. For example, Wesabe can show the cost of an average transaction at a particular merchant.

Geezeo

Geezeo is very much like Mint.com in that it offers a centralized site to access all your financial accounts including banking, credit cards, loans, etc. Where they are a bit different is in their community aspect. Instead of anonymized data, they offer community-focused areas like Groups and Goals where you can socialize and learn from others who have the same financial concerns that you do. Geezeo also stands out for letting you upload your own bank account data, if you so desire, instead of having to set up accounts to upload into Geezeo automatically. Transactions can also be manually entered. Geezeo offers a mobile app too, that lets you check your balances and available credit from your mobile phone.

Expensr

Expensr is an online personal finance application which was recently acquired by recommendation engine Strands. The site is now being integrated with Strands' recommendation technology to produce a new product, moneyStrands, which analyzes your financial history in order to recommend products and services you may find appealing. The site lets you import your bank account files into their system using a secure uploader. The app will then auto-categorize your transactions. You're presented with a variety of pie graphs and bar graphs that break down your spending to show you where your money is going. You can compare yourself to your peers by tagging yourself with keywords like "young professional" or "college student" and then look at your spending habits versus the average from that particular group. Expensr also offers budgeting tools which can help you plan for the future.

moneyStrands

After acquiring Expensr, Strands has been working to combine its technology with their own recommendation engine. The end result is moneyStrands, still in private beta. Ultimately, the site will offer you a way to aggregate your financial information in one place and see instant snapshots of your finances. Recommendation technologies will present you with services you may be interested in and you can anonymously compare your habits with others. At the moment, Expensr and moneyStrands appear as separate web sites, but perhaps they will become more integrated in the future.

Xero

Where Mint.com may appeal to former Quicken users, Xero.com appeals to former Quickbooks users. This kiwi startup offers daily bank reconciliation as well as invoicing, reporting, A/R, A/P, expense claims, and other bookkeeping tasks. For those considering the switch, a handy page on the Xero web site lets you show your accountant exactly what Xero can and cannot do so that you can analyze whether or not their service is right for you.

Rudder

Rudder made their official debut at the recent DEMO conference in San Diego. Unlike the other apps reviewed here, Rudder focuses on bills more than banking. With Rudder, you can determine how much money you have available to spend while still paying all your bills. The app aggregates your banking and credit card accounts, but the focus here is not on what's taken place in the past (historical trends, spending habits, etc.). Instead, Rudder focuses on the future by letting you know what's left in your account for spending and saving. The best feature about Rudder, though, is that it doesn't force you to log into their site to get this information. The app delivers balances, transactions, and upcoming bills directly to your email inbox.

Green Sherpa

Another app which debuted at DEMO was Green Sherpa. At first glance, the app appears to be very much like its competitors with bank account aggregation, reconciliation, and budgeting tools. However, Green Sherpa offers a combination of features which appeal to those who are making the transition from desktop apps. The app lets you input transactions manually and offers a more advanced cash flow projection than Mint.com does. However, the app's most unique feature is its sharing aspect. You can choose to give other people (like a family member or accountant) access to your data. While that makes Green Sherpa stand out, they've entered a crowded space where competitors already have solid leads, so it may not be enough to win people over.

Buxfer

Buxfer is another app offering a home to all your accounts. It will auto-download your data, categorize your transactions, and help you budget. Buxfer addresses the privacy concerns that many have with banking 2.0 sites by integrating with Google Gears. The app uses Google Gears to store your account login information on your own computer, only syncing back the data collected, not your private credentials. They also offer a groups feature which will appeal those sharing expenses with others, like roommates, for example. You can use Buxfer to track and settle IOUs with others through the site. This makes the app more appealing to a younger crowd, as does its mobile integration. You can access Buxfer via SMS, Twitter, email, on on the mobile web.

Shryk

Shryk is a company which just launched at the TechCrunch50 conference. Their two-pronged approach is designed to help kids achieve financial literacy. The first part of that approach is a service called iThryv which teaches kids about earning, saving, and managing money. This product is sold through banks and credit unions and is also available free to educational institutions. The second part of the Shyrnk platform is WeProsper.org. This is an online community where teachers, schools, and financial institutions can come together and develop new tools and methods to promote financial literacy.

Security Concerns?

For obvious reasons, some people will find the thought of banking in the cloud frightening. This is, after all, data that requires a high level of security. However, with banks themselves offering online services and bill pay, people are beginning to see that "online" doesn't necessarily mean "insecure." In fact, having your banking data stored on servers run by a business may actually be more secure than having a Quicken file saved on your laptop, a device which could be easily lost or stolen. Also, because home users don't tend to back up their data as often as they should, a hard drive crash could mean a complete loss.

Challenges

Although there are a number of sites to choose from in this competitive space, there are still some challenges to overcome. For one, because almost all these companies are U.S.-based, the banks they support are U.S.-based as well. This leaves potential international customers without a way to participate. Some of the companies state in their F.A.Q.'s that they plan to add support for more banks worldwide in the future, but that's only likely to occur if the company can first gain a foothold here in the U.S.

Another issue with these sites is that there is almost no support for small community banks and credit unions. Unless the site allows you to import your transactions manually (which somewhat defeats the purpose), you're out of luck. Why is that almost all major banks are available yet so few of the smaller banks are? This is the type of service that could help keep smaller banks more competitive with their big bank counterparts, so you would think some of them would be interested. Is the burden on the banking 2.0 sites to help smaller banks get online or is it up to those institutions themselves? Perhaps the banking 2.0 sites need to be working a way to automate the import of transactions from any bank, regardless of whether or not the institution itself supports the site. The first company to come up with a solution like that could really set themselves apart from the rest of the pack and gain a whole new set of customers in the process.

Conclusion

Banking 2.0 is still very much an emerging technology trend. Yet with the young generation of digital natives now entering the workforce and starting their careers, you can be sure that they will have an impact on this space. They will expect their banks to support not only online banking but also other online money management tools such as these. This is not a generation that's known for their brand loyalty, so you can bet that they will be all too happy to change banks if they decide they want to use one of these services and their bank isn't supported.

Banking 2.0 represents only one aspect of the growing trend that is cloud computing. Just as other desktop software is being threatened by new online apps, desktop financial management software is threatened as well. These banking sites go up against expensive and unwieldy desktop software while offering their services for free and finding you savings. In our current economy, that activity gives banking 2.0 the potential to go mainstream fast.

One of the best things about using web apps is that you don't need to download updates, install new versions, or go buy a new boxed product every year or so. However, in Mint's case, the speed with which they innovate - they claim to implement customer-driven improvements every six weeks - meant their new features were being overlooked by their users. People who signed up to manage their bank accounts were often not aware that the site could help them manage their other accounts, too, since those features weren't offered at the time of initial registration. Calling attention to these features was the main goal of the site's redesign.

Today, the site launches with a new look and feel which brings the focus back to the major new features added to Mint since their launch: enhanced budgeting tools, the addition of brokerage and investment accounts, mortgage accounts, student loans, and auto loans. In addition, they've added six new "how to" guides that can help you with your major financial decisions. These include things like saving for retirement, paying off your student loans, buying a car, creating a personal budget, and more. The guides are the start of a new educational series for the site.

What It Looks Like

Below we have both the old version of Mint.com and the new version. Do you think the redesign is an improvement?

Before:

After:

Before (Features):

After (Features):

The New Mint: All Flash, No Substance?

For the happy U.S. customers who are able to use Mint.com, the redesign is sure to be appreciated as it really does give the site a fresh, new look and makes finding out about new features easier than before. However, Mint is still ignoring the needs of those customers who don't bank with large, national banking institutions. One of the most requested features is for Mint to allow for data uploads - that is, the importation of downloaded files be them in .QIF, .QFX, .QBO, or even .CSV or .TXT format. For those who chose to bank with smaller community banks or credit unions - a choice often made because of the typically lower fees that those institutions provide - Mint.com is not an option. That's a shame because if anyone is interested in using a service to save money, it could very well be these folks.

By keeping their niche so narrow so as to not include a good portion of the U.S. banking population, Mint.com is allowing its competitors, sites like Wesabe.com and Geezeo a big advantage. Today, both of those sites have FAQs that state "if your bank isn't available, let us know and we'll add it!" They also both support data upload. Meanwhile, Mint's FAQ, hidden away on their forums, reads "...we are adding new banks as quickly as we can," and "Mint currently doesn't support features that would allow customers to import data from another source (Quicken, Excel, etc.). We're looking to see if we can provide support for these down the road."

We hope that since Mint.com has a fresh new look now, they will focus on offering their Webby-award winning services to more people now, too.

Buy.com, a traditional fixed-price online retailer in the vein of Amazon, signed a listing deal with eBay in May. The terms of the deal have not been disclosed, but Buy.com is generally listing around 500,000 items on the site at once -- or are they? Sellers on eBay's forums discovered that a number of the company's listings appear to be empty.

The listings appear in searches labeled as just "NEW." Clicking through displays listings pages that inform users they are bidding on "a brand new item," with no indication of what that item actually is.

This is important for two reasons. First, because it means that Buy.com is being given preferential treatment over individual sellers -- who would not be allowed to create empty listings to flood category search results with their brand. Sellers in the areas were Buy.com sells are feeling increasing competitive pressure -- and this indicates that the playing field is not level. As the auction-watching blog AuctionBytes indicates, that goes against what former eBay CEO Meg Whitman promised sellers.

The second reason this matters is that the number of new listings on the site is a key metric that eBay reports to shareholders in their financial reports. If those numbers are being artificially inflated with empty listings it could indicate that information being fed to investors is not accurate.