Loving That Minty Smell Of Fresh Data

In December 2000, I wrote a report called Personalizing Financial Services, in which I said:

“[Financial] firms will create a virtuous cycle of trust with customers through: 1) Preemptive customer service: Fulfilling service needs before customers ask for them; 2) Peer comparisons: Showing how customers how they compare with their peers; and 3) Contextualized advice: Explaining the differences between consumers, and offering advice that leads to a decision.”


In the intervening ten years, the number of banks that have followed this prescription has been overwhelming. Overwhelmingly underwhelming, that is. There are — or have been, at least — three barriers:

1. Lack of causal effect. I simply had no proof (and continue to have no proof) that there’s any causal link between providing peer comparison data and strengthening customer relationships.

2. Technology. Pulling the data together is not a simple task, and, in the absence of an economic model for why a bank would do it, no one has.

3. Privacy. This has been the immediate and knee jerk reaction I’ve heard from countless number of bankers: That providing peer comparison data would somehow be a violation of the bank’s customers’ privacy. Looks like American Banker is jumping on the privacy violation bandwagon, as well. In a recent article, it wrote:

“Mint.com is testing a counterintuitive theory: that consumers will ignore privacy concerns for a feature they find compelling.  Mint announced that anyone can view the transaction data that its roughly 4 million users originally provided for their personal use.”

The rest of the article does quote a number of industry analysts who don’t buy into the “privacy violation” theory (although one prominent analyst who follows the PFM world was inexplicably not contacted for the article — wuzzup with that?).

I’ve got to agree with the other analysts — this is nowhere near a violation of privacy. This is no more a violation of privacy than the US government releasing GNP statistics. After all, those stats are nothing more than an aggregation of spending data across millions of consumers. Did you give the US government permission to include your spending data in those statistics? Of course not.
Do you see it as a violation of privacy? Of course not.

All told, Mint.com isn’t buying any of these barriers.

The PFM site recently announced its Mint Data product which “will show spending data both by average purchase price and by popularity, which is defined by number of transactions per month. The rankings can be viewed by category, such as food and dining, by specific business, and broken down to the city level. Visitors to Mint Data can choose among more than 300 cities in the U.S. to compare spending.”

I had a chance to talk with someone from Mint about this, and there were a few things that caught my attention. Mint:

  • Sees this as consistent with their brand positioning of being an advocate for the consumer.
  • Plans on brining an economist on board to develop economic indices based on the data.
  • Is evaluating ways to make the data “social,” possibly by linking the spending data to Google local data, or perhaps to customer review sites.

There’s something that the Mint rep didn’t mention, that seems like a possible angle for Mint to take, however. The tool provides data about spending at various merchants, retailers, and businesses. With Intuit’s focus on small businesses, there might be a play here for Intuit to develop marketing or data tools for its small business customer base by linking in to the Mint data.

It might be hard for some to see how providing peer data is in keeping with being a consumer “advocate”, but, in the context of the “virtuous cycle of trust,” I’m buying it. This is an important announcement from Mint, that points to why PFM tools will evolve into decision support tools for customers, and not be limited to just a budgeting/expense categorization tool.

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