OBSERVATIONS FROM THE FINTECH SNARK TANK
Intuit announced that it is âreimagining Mint as part of Intuit Credit Karma,â explaining that the company will âensure a smooth transition for Minters who decide to onboard to Credit Karma.â
The companyâs press releaseâtitled âIntuit Credit Karma welcomes all Minters!â went on to say that, in 2022, âthe Intuit Mint team joined Intuit Credit Karmaâ and that the announcement âmarks the next evolution of Credit Karma.â
If the terminology regarding Intuit, Credit Karma, and Intuit Credit Karma, is confusing to you, join the club.
Most Mintersâor what the rest of the world would call âMint usersââprobably donât know or care about the organizational differences (or connections) between Intuit and Credit Karma.
How Many Minters Are There?
The recent announcement made me wonder: How many “Minters” are there?
My initial estimate was 7 trillion. I arrived at that number by making a straight line projection, taking Mintâs reported growth between 2006 and 2008, and forecasting forward 15 years.
It was almost a joke back in 2006. Mint would announce some number of users, then two weeks later update that figure by some hugeâand seemingly implausibleâ number. The reported growth was never corroborated by my own consumer research which found far fewer users than what Mint claimed.
Whatever the actual number wasâor isâitâs on the decline.
In April 2016, Mint claimed to have more than 20 million users. Five years later that number had dropped to 3.6 million, an 80+% loss in users (depending, of course, on how you define “users”).
What Happened to Mint?
While the drop in Mintâs user base is precipitous, Intuit should be congratulated for maintaining any level of user engagement.
Thatâs because many providers of PFM tools have disappeared (e.g., Wesabe) or pivoted to other strategies (MX, Geezeo).
The problem was two-fold:
1) Historically (i.e., from 2001 to about 2015), PFM tools were predominantly budgeting and expense categorization tools. As much as financial experts tell us we need to budget and categorize our expenses, many (if not most) of us donât do it.
2) Consumers didnâtâand still donâtâwant to pay for budgeting and expense categorization. Consumers already spend a lot of money to manage their financial lives. Spending even more for budgeting and expense categorization isnât…well…in the budget.
In effect, between 2006 and 2020 the personal financial management spaceâwhere PFM=budgeting and expense categorizationâdied.
The Emergence of a New Space
There are some fintech entrepreneurs whoâif they havenât left this web page yetâcanât wait to tell me how wrong I am about the death of PFM.
Please keep reading and let me explain.
Whatâs emerged since 2015 are a number of thriving fintechs who say theyâre in the personal financial management space.
But they donât do budgeting and expense categorization. Andâfor better or worseâthis is how many in the banking and financial services industry define PFM.
What these thriving fintechs do is financial performance management (I harbor no delusions that the acronym FPM will gain any currency).
These fintechs are doing things like: 1) canceling unwanted/unused subscriptions; 2) finding opportunities to reduce monthly bills; 3) automating how much consumers save on a regular basis. And many other things (beyond budgeting and expense tracking).
Mint, however, does none of these things. The PFM market morphed and passed Mint byâas have millions of former users.
The Lessons Banks Should Learn
A recent Yahoo! Finance article claims that âMint’s shutdown is an opportunity for banks.â
Itâs not an âopportunityââitâs a lesson and a threat. In fact, there are a couple of lessons banksâand Credit Karma, for that matterâshould take away from the demise of Mint and PFM:
1) Impact trumps insight. Budgeting and expense categorization provide insights into how much and where someone spends money, but having bottom line impact on consumersâ financial lives is what consumers really wantâand are willing to pay for.
2) Performance trumps health and wellness. In these tough economic times, many financial institutions and fintechs are focused on helping consumers improve their financial health and wellness. But thatâs not what consumers wantâor are willing to pay for.
The Financial Performance Imperative
Performance versus health? This is just mincing words, no? No. Thereâs a difference between high performance and financial health when it comes to:
- Saving. Youâre financially healthy if you save a certain percentage of your income. Youâre achieving high performance if you optimize the return on your savings and investments.
- Spending. Youâre financially healthy if you spend less than a certain percentage of your income. Youâre achieving high performance if you maximize the discounts and deals you get on what youâre buying.
- Paying bills. Youâre financially healthy if you pay your bills in full and on time. Youâre achieving high performance if you reduce your bills and cancel subscriptions.
- Protection. Youâre financially healthy if you have adequate insurance on your physical assets. Youâre achieving high performance if you reduce you protect your data and identity assets.
Consumersâ use ofâand spending onâfintech tools and services that deliver financial performance (versus financial health) is putting banks and credit unions at a disadvantage from both an engagement and revenue perspective.
If Credit Karma can successfully âadoptâ Mint and integrate the tool into its offerings, it may prove to be yet another threat to banksâ efforts to offer personal financial âmanagementââand performanceâtools to consumers.