At Finovate, a bad economy means good start-ups

SAN FRANCISCO--At the FinovateStartup conference, one thing is clear: a lackluster economy can be the best time for financial start-ups to get new users.

Apps that help people track and manage funds outside of their bank or investment service's site are in high demand, and many of the services presenting at the conference are trying to get those financial companies on board.

Why? Because those companies are still the gate keepers of trust. People are more willing to hand over their account credentials and detailed personal information to larger institutions over some hot, new Silicon Valley start-up. That, and it's a whole lot easier to get in the door if you're built into a financial institution's tools. The hard part of course, is proving you have a system that really works.

To that end, nearly all the sites that gave quick, eight-minute pitches at the financial innovation conference are trying more user-friendly approaches to common financial activities such as keeping an eye on bank accounts, managing and paying off loans, or helping people sign up for credit cards.

One site, KnowBeforeYouApply is simply taking user credit history, then recommending various cards people could sign up for based on that. Another card play, called Tempo, is trying to make debit cards more like credit cards. It's offering a third-party card that's linked up to a user's checking account, which skips the monthly bill in place of taking the money out as soon as it's spent. It also includes personalization and promotions, things that aren't usually offered by the banks that supply them.

Sites featuring simple, colorful charts, tables, and status bars are also aplenty. These charts aren't just for looks, though; for these sites, it's all about aggregation. Just like Facebook and FriendFeed are working to harness the never-ending flow of social information, these sites are attempting the same with accounts from multiple services. Even if it's not a core part of a product, companies want to keep users inside their apps with a dashboard that lets them view dozens of streams of information within a very small amount of space.

One of the best examples of this is Kapitall, which is designed like a Web desktop. It has a customizable workspace of company icons and portfolios that users can drag and drop to track their investments and compare sets of data. Creative director Cordell Ratzlaff calls this workspace "the playground," which sits atop a never-ending stock ticker with companies you're watching. It seems like a total data overload at first, but Ratzlaff managed to create and organize portfolios as if he were moving around picture files on a desktop PC. It actually looked kind of fun.

Speaking of fun, there were even finance tools for kids. IThryv, which launched late last year has a financial dashboard with account info and goal-tracking aimed at tweens. It's also set to expand to other demographics like senior citizens who are managing finances on a fixed income.

Not all the sites on display at Finovate are aimed at consumers, though. A few are focused on business users while retaining the look and feel of a consumer app. Expensify, which handles expense reports, is one such site. It links up to your checking account and can track purchases you've made while on a trip, and pay out directly to it. It even lets you add receipts for payments made in cash by using your cell phone's camera.

Looking forward
So what are some of the big financial trends to look for in 2009 and beyond? White-label services and mobile apps are likely to top the list. Wesabe, which is a dashboard for consumer finances (similar to Mint.com), recently introduced a version of its services that banks can give to their users as a way to track their financial activities. The company has already done this with a Delta Community Credit Union but wants to expand to other markets, too. The same goes for payment and loan services, which want to be more deeply integrated as payment options in places like hospitals and online retailers.

Each service also wants to make sure users can access their apps while away from a desktop PC in the form of a secure mobile application. Most companies who mentioned either having or working on mobile applications cited the iPhone, which could become its own payment tool since developers will soon be able to offer in-app payments that are linked up directly to user bank accounts.

With all these tools it seems as if the ultimate goal is to make it so users don't have to go out of their way to sign up to use them. Yet it requires a far more intense commitment and trust than a simple e-mail address and Captcha, which makes me wonder if 2009 will bring a Facebook Connect for finance.