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360 View | Growing Local Banks in the Millennial Market

5 Ways Mint.com Is Stealing Your Customers

Some retail bankers think that Mint.com complements their efforts and have even invited account holders to use the service. What these bankers don’t know is that Mint has positioned themselves as a threat to traditional banking and is quietly pulling account holders away.

As the main frontrunner to the online personal financial management movement, Mint.com has had a lot of time to grow. The company was founded in 2006, acquired by Intuit in 2009, and has recently undergone a fresh redesign. In addition, they acquired Check last year and have expanded their services to help consumers effortlessly see their credit score.

Subscribe TodayAll of this growth is good for Mint users and potentially bad for financial institutions. And yet many financial institutions still don’t see Mint as a threat. In fact, some banks and credit unions even encourage their account holders to sign up for Mint.com to track their finances — a suggestion that could easily backfire on financial institutions.

Below are five ways that Mint.com can threaten banks and credit unions. In this list, I walk through a fictional scenario where an account holder at ACME Bank has signed up with Mint at the suggestion of ACME.

mint on iphone1. Mint Shows All Accounts in One Place

In this scenario, let’s say the fictional customer’s name is Scott.

When Scott signs up for Mint, the first thing he does is add all of his accounts — including those he has with ACME — to Mint.com. He sees his mortgage, his car loan, his checking account and more in Mint’s hub. In addition, he interacts with spending charts and budgets based on his aggregated data. The Mint experience is more engaging and insightful than the experience Scott gets through ACME’s banking portal (where he typically just looks at his balance and then signs out).

At this point, Scott sees less of an incentive to sign into ACME to check his balances and transactions. He can see all of that in Mint. This change alone is potentially damaging for ACME, because Scott no longer sees ACME’s offers when he does his digital banking. Instead, he sees ads for banking products from other institutions, including third-party competitors on his Mint site.

Unibind | Financial Products

MintLife.com_Logo2. Mint Is a Digital Financial Advisor

When Scott sets up a goal in Mint.com for a mortgage, he notices that Mint encourages him to read relevant posts on Mint’s blog, MintLife. After reading a few posts and realizing that MintLife has the answers to a lot of his mortgage-related questions, Scott starts to look to Mint, not ACME, for financial guidance. He doesn’t call or visit a loan officer at ACME when he wants to figure out how to get the best deal on a loan. Instead, he looks up the answer directly on Mint’s impressive blog, and ACME loses its position as Scott’s primary financial advisor.

3. Mint Helps Simplify Bill Payments

After creating a goal, Scott sees that he can set up bill payment directly through Mint’s portal with Mint Bills. He likes that he can view his bills in context of his full financial picture, and so he signs up. Now he pays for his utilities and rent from the same place he checks his financial health.

Mint App Bills 2

What this means is that ACME no longer gets Scott’s bill pay data and can no longer use that data to produce intelligent marketing. Even worse, Scott’s bank or credit union will likely never get that data stream back again. It’s gone for good. This is damaging because, in the future, the best customer experience will likely belong to whoever can leverage their account level and purchase data most effectively to cater to the financial needs of the consumer.

4. Mint Markets Competitive Credit Cards

As Scott switches his bill payment from ACME to Mint he notices an offer on Mint for a Chase Freedom credit card. He’s been satisfied with his ACME debit card for years, but the rewards that Chase offers him are pretty tempting.

Mint Marketing Message

On the tenth time he sees the offer from Chase, Scott decides to act. He signs up for the Chase card, and over time, Chase becomes his primary spending account. At this point, ACME loses access to all of the daily transaction data that could be helpful in future marketing or account servicing efforts by his bank. Eventually, Scott no longer views ACME as his primary financial institution.

5. Mint Markets Third-Party Loans

After Scott has been using Mint.com for a few months, he gets an email from Mint inviting him to apply for a $35,000 personal loan with Lending Club. He had been thinking about jumpstarting a new business, and this opportunity seems promising. As he researches the advantages of Lending Club — their speedy lending process, simple user experience, and better rates — he decides to sign up for a loan with them.

Mint Lending Club

Before joining Mint.com, his primary financial institution (ACME) would have been the first place Scott turned when looking for a loan like this. But at this point, Scott’s not considering ACME at all. He hasn’t even visited ACME’s branch, online site or mobile banking app before deciding to get a loan with Lending Club, and as a result ACME has lost out on all that potential revenue.

At this point, it might only be a matter of time before Scott moves his primary checking and savings account from ACME to one of the many big-name financial organizations that Mint sponsors in their portal. ACME will then no longer be a player at all in Scott’s financial life at. Mint will have stolen one of ACME’s customers.

Digital Banking Report | 2017 Trends & Predictions

What Should Financial Institutions Do?

Fortunately for financial institutions, there are ways to stop account holders from joining Mint and drifting away. The first step is to not suggest Mint.com as a solution for account holders. The second step is to offer a better digital banking experience — one that might include a digital money management (PFM) component. Such a component can hopefully incentivize your account holders to not start using Mint at all.

From MX to D3, from Yodlee and Meniga to Geezeo, and from Strands Finance to Finance Works, there are a range of products that can meet this need. Critically, the product must aggregate internal and external accounts, automatically categorize transactions, and engage users with a simple and visually rich interface.

In the past, PFM has been maligned for poor user adoption, and those complaints were often justified. But bankers who haven’t seen the latest improvements and updates in digital money management products might not be aware of how much has changed.

Aggregation and categorization services are far more powerful than they use to be, and the latest user interfaces are stunning. As a result, user adoption has started to rise. One notable example recently came from an MX webinar where clients reported reaching adoption rates ranging from 43% to over 50% leveraging top-down organizational advocacy. It’s clear that today’s digital money management products drive better results than they have in the past.

It’s likely that you have account holders who are looking for a place to manage their money. If you can provide an easy, overarching solution, they’ll be far less likely to sign up for Mint.com. And, that’s a good thing for you — especially when they start signing into your portal to see all their finances in one place.

When they come to your online or mobile site daily to manage their finances, you are more likely to retain your position as their primary financial institution.

Jim MarousJim Marous is co-publisher of The Financial Brand and publisher of the Digital Banking Report, a subscription-based publication that provides deep insights into the digitization of banking, with over 150 reports in the digital archive available to subscribers. You can follow Jim on Twitter and LinkedIn, or visit his professional website.

All content © 2017 by The Financial Brand and may not be reproduced by any means without permission.

Digital Banking Report | 2017 Trends & Predictions

Comments

  1. A cautionary tale for sure Jim, the chance of losing Scott exists. But also, by teaming up with Mint, doesn’t a financial institution reap the benefit of gaining exposure to Mint’s large user base in being one of the financial institutions whose third part loans are offered to other users?

    It’s all part of consumer choice. On Acme’s side where Scott is concerned, have insanely great experiences to keep Steve happy. In the case of Mint, create offers and make it easy for other users to convert.

    That said, an institution should certainly make sure they have their ducks in a row before wading into this channel.

    Simply ignoring Mint all together and assuming that a market leader isn’t going to be a predominant consumer choice is risky.

  2. I am not sure if the author is speaking from personal experience (about how customers stop using their financial institutions) or if this is just a hypothetical piece based on what he knows about Mint.com from personal use of the website.

    As a consumer, I have come to enjoy being able to use Mint where I can see most of my accounts (not all of them are available there) in one place and know how I am doing in terms of budget, planning for retirement etc. On the other hand, this has not stopped me from using or depending on my bank or mortgage company or credit card companies for what I need on their website or reaching out to their representatives for that.

    In today’s world, most people have multiple accounts across multiple institutions. Something like Mint makes it convenient to monitor them. But it doesn’t let you pay your bills, or credit card, or mortgage and so on through the site. You still have to use your other financial institutions just as much as you did before to take care of of those things.

    There maybe some truth that Mint can influence your decision on whether or not to apply for a credit card or loan etc. Then again, I haven’t found Mint to suggest the best option for me all the time. You have to do your own research to figure that out and sometimes the suggestions they are pretty redundant as you may already have the best of loans or credit cards etc.

    So here is my take on the author’s points –

    1. It’s true you can see all the accounts in one place. But I still go to my bank, mortgage loan, credit card company, auto loan website about as much as I used to be fore. So think isn’t necessarily true.

    2. I read posts on Mintlife, but still go to a mortgage broker locally (never went to my bank for it as I know they don’t have the best option) for the best deal on a loan.

    3. Of all my bills, there is just one utility bill that I pay through my bank’s bill payment option. I still do it the same way in spite of Mint Bills option.

    4. I have always done my own research to find the best credit cards. I still do and doesn’t take Mint’s word for it, though I see their promotions.

    5. I have never got personal loans through Mint.

    I don’t think Scott in this article is a good representation of an average person today. I would like to know what percentage of people still go to a single financial institution for all of their financial needs.

  3. Jim Marous Jim Marous says:

    Great comments and thoughts around mint.com and ‘Scott’. What we are trying to impress upon banks and credit unions is that 1) Mint does provide some great services for consumers including consolidation of accounts, advisory services and targeted marketing of financial solutions, 2) Some consumers may move further from their current bank or credit union based on their relationship with mint.com, and 3) There are alternatives that financial institutions can offer their customers, reducing the risk of attrition and providing the potential for relationship consolidation and loyalty.

  4. The threat to ACME from Mint is quite obvious. I’m even surprised that there are naive banks around who actually recommend MINT to their customers. That said, the guidance for ACME is impractical. Any Scott who has accounts in multiple FIs is moew likely to register all of them with an independent, third party PFM provider like MINT than with any one of them. Why would Scott share his (say) EMCA Bank account details with ACME? Even if he does that, EMCA would face the same – or greater threat – from ACME as it does from MINT. If we play this further, EMCA would strongly encourage Scott to sign up for PFM with EMCA and register ACME account details with EMCA’s PFM rather than the other way around. Scott would get so many entreaties from so many banks to sign up for their PFMs that, in the end, he’d rather tear his hear and simply sign up with MINT! I’m stretching this “thought experiment” a bit far only because PFM poses a “damned if they do, damned if they don’t” problem for banks: They don’t do PFM, customer goes to MINT. They do PFM, customer goes to MINT! It was for more or less these reasons that a large private sector bank in India launched a multibank-aggregated PFM 4-5 years ago and then shut it down a year or two later.

  5. Mint is a great platform and the banks and CU have been slow to adapt to new money management technology (especially in Canada). However banks can use Mint to target prospects with their product offers. I don’t think banks are recommending that their customers use Mint, well not that I have seen anyway.

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