Intuit is opening up a new host of APIs to its Financial Data Services applications. This API opens up the following applications: Quicken, QuickBooks, Mint (and even FinanceWorks). Wow! OK, maybe wow.
The new API suite promises to give access to data from over 19,000 financial service organizations. That’s a lot of data, and a lot to be concerned about because it sounds like it’s not just the aggregated data. The applications may be able to use personal user data to offer individualized value propositions and targeted applications for payments, rewards, loyalty programs, if-then-then-that banking actionable notifications, and more.
Is this a threat to banks and credit unions?
It depends on what we see this data used for, and what banks and credit unions can then leverage themselves (or through their own partnerships). We’ve been hearing tidbits about opening up pieces of the banking application platform for some time, but this API isn’t the open platform to Intuit’s Online and Mobile banking applications that clients are waiting for (and just about every major direct to FI fintech provider seems to be talking about).
This API can theoretically access the data behind every user account that uses one of these applications. That’s over 20 million users of Mint and FinanceWorks alone, and over 60 million who use Quicken and QuickBooks. That’s a lot of people and a lot of data. Plus, a lot of possibilities.
It will surely increase competition in the financial ‘big data’ space – something most FIs are already pretty bad at leveraging. After all, Mint, Quicken, and QuickBooks and their targeted advertising has mostly been looked at as competition by most banks; cross-sells to the larger bank advertisers such as Ally Bank, or to Intuit’s own products.
Access to FinanceWorks data is even more interesting. This PFM solution was designed before Intuit acquired Mint. It’s now used by over 10 million banking customers and represents the largest ‘pseudo-white-label’ PFM out there. It sounds like FinanceWorks will see more changes soon. FW is apparently slated to merge with direct-to-consumer Mint sometime in late 2012, initially for small business (and may disappear as an offering in favor of Mint, something most FIs would probably have mixed feelings about). I’m actually excited about the idea. The Mint UX has always had better focus, better ad targeting, and while it’s showing its age, it’s certainly a step up from the functionality of FW.
But let’s get back to the API. So, what are banks and credit unions to do? Now even more companies will be able to leverage this transaction and payment data, those startups and other fintech companies willing to partner with Intuit, potentially offering further disruption to the banking model and income streams. Or is it much ado about nothing?
Is the expansion of the API simply opening up the data stream to additional developers a way to pad Intuit’s revenue stream, in essence opening up Web Connect, DirectConnect, and the OFX back end connectivity to financial institutions for new income and third party innovations to leverage within Intuit’s own technology stack? Or is it an opportunity for banking? Here’s how they position it – examples of what you can do with the data.
An opportunity for banking?
How can financial institutions leverage this data? Whether through partnering with Intuit directly, adding third-party applications leveraging the larger data sets, adding functionality within their online and mobile banking stack (powered by Intuit or not), or partnering with external Intuit approved developers adding functions easily adopted by consumers and businesses – these institutions open to this development might be in the best position.
It’s time to start rethinking the utility of the banking model, and the use of the transaction data stream. Moves like this by Intuit make it only more clear. It’s an interesting move that’s sure to get some developers coding very soon (and hopefully some of them will be within the banking industry). That’s access to a treasure trove of transaction data. Let’s see where it goes.
Here is additional information on the API from Intuit and the media.
Connect with the Intuit Developer Network here.
This post was originally published on Bradley Leimer’s blog: Intuit Opens Up APIs To Financial Data Behind Quicken, QuickBooks, Mint (And Even FinanceWorks).