As personal financial management software gains traction at banks, vendors are starting to tinker with its long-established formula.
Under the original model, aggregation technology collects users' account balances and transactions and helps them figure out where their money is going.
Two new approaches have dropped aggregation, however. Bundle Corp., a start-up backed by Citigroup Inc. and Microsoft Corp., is promoting a service that complements social networking and helps users compare their spending patterns to those of their peers. And this week Fiserv Inc. rolled out a PFM service that focuses on bill presentment and lets people manage their finances according to their coming expenses.
More banks are looking to provide advanced features to spice up their online banking services for customer niches, said Nicole Sturgill, the research director for delivery channels at TowerGroup. "PFM is itself a trend in online banking," she said, and "there are so many ways of defining PFM."
"What we've seen is that banks are really looking at the pieces," Sturgill said.
Jaidev Shergill, Bundle's chief executive, said he wanted to make the New York company's service stand out from the standard aggregation services, which generally deliver similar features. "We knew that we would hit a wall if it was only data," he said.
By linking Bundle to the social media sites operated by Facebook Inc. and Twitter Inc., Bundle is trying to create "the cycle where user-generated content — coupled with the data — brings the site to life," Shergill said.
Rather than ask users to contribute their own data — the cornerstone of aggregation-based PFM services from companies like Wesabe Inc. or Intuit Inc.'s Mint — Bundle relies on financial data from huge pools of consumers, including anonymized account details provided by Citibank and transaction records from other sources.
All this information can be used to see, for example, how much a young couple in New York might expect to pay on average for rent, or a growing family in San Francisco should budget for entertainment expenses.
Bundle users can sort spending data by geography, age range, income range and other demographics and can drill down for a detailed look at each category. Any data points that users unearth can be immediately uploaded over Facebook or Twitter. Shergill said this allows people to share the results with their immediate circle, rather than confining any potential online debate to Bundle's Web site, which went live Jan. 20 and, at least for now, is not widely used.
Shergill said this provides people with a better view of the big picture than they can gain from just evaluating their own financial details.
"With only the bank's data you can't do what we're doing," Shergill said. "Every bank is only going to have a certain percentage of someone's wallet."
Shergill was previously the president of Citi Ventures, where he developed the idea for Bundle, which was incorporated in June of last year.
Citi, Microsoft and Morningstar Inc. have all invested in Bundle, though Shergill would not say how much each company contributed or whether any of them owns a majority share.
Fiserv's PFM offering focuses on upcoming bills, by putting the company's bill presentment front and center in the latest version of its Corillian Online software. The default configuration for the online banking application displays thumbnail images of any upcoming bills to which Fiserv has access.
Erich Litch, Fiserv's senior vice president and general manager of consumer services for the electronic banking services group, said that shifting the focus from aggregation to future spending reflects how people interact with their primary bank.
"Most of us really have a primary spending account relationship with a financial institution," Litch said. "What we're really after is a really holistic view of that account and how we spend money."
By contrast, "aggregation really satisfies the needs of … a very, very small population," he said.
The e-bill portion is just the most visual part of a column of data presented within Corillian Online that focuses on future transactions. Scheduled payments and transfers are also listed, giving the overall system a more forward-looking view than PFM traditionally has.
Corillian Online also allows past data to be presented in a chart, as most PFM services do, and though aggregation is not a default feature, it can be added by bank clients that want it.
Bundle's Shergill said that he also may eventually offer aggregation, but it was never envisioned as a core feature of his service. Bundle can also get more bank data by partnering with more financial companies, he said, though he is still evaluating the best method of offering compensation for that data.
First Banks Inc. of Clayton, Mo., plans to implement Fiserv's Corillian Online application towards the end of the third quarter or early fourth quarter.
Timothy Cook, First Banks' vice president of Internet banking, said Fiserv's ability to make bill payment a prominent part of the front page is a big part of the product's appeal.
"More people are expressing interest in" PFM, Cook said, and Fiserv's variation is a good one. "I would like to configure it that way," he said.
Making bill presentment a major theme of First Banks' PFM service "keeps it top of mind for" customers," Cook said. "It's convenient. It's right there … we want them, obviously, transacting further and paying bills from here. It just further ties them in, studies have shown. They're more profitable customers."
Other banks have also decided against aggregation. Wells Fargo & Co.'s My Spending Report PFM system does not let users compare data from accounts at other financial companies, though it does allow data to be pulled from multiple Wells accounts. Wells had earlier tried two different aggregation systems before deciding to abandon the feature altogether in 2005.
Wells, however, is a rarity among PFM providers. Most third-party PFM providers built their systems around aggregation, and they did so largely out of necessity; since these services are designed to work with data from any bank, they needed to create a way for clients to import their customers' account details.
TowerGroup's Sturgill said the jury is still out on what might be the best model for offering PFM services.
The Bundle and Fiserv strategies both break from the expectation that people prefer to handle their own data.
"Aggregation is something you do because you think it's a good idea," she said, but the novelty is not always enough to keep users coming back. "Bill payment is not a choice. We all have to pay bills."
Sturgill said Fiserv's format could do a better job of keeping people engaged with the online banking sites — which is the ultimate goal of any PFM implementation.
"From a financial institution's perspective, they're not looking at stickiness for PFM," she said. "They're looking for stickiness for online banking. They want PFM to be what makes online banking sticky."