The discontinuation of Mint is undoubtedly an opportunity, but it also signals a threat. Intuit, by way of Credit Karma, is coming after banks’ customers.
By Parker GrahamIn January, Intuit will discontinue its personal finance app Mint. This comes after Intuit’s acquisition of Credit Karma in 2020. While this news is not that surprising (Credit Karma has more than 32 times the users of Mint), Mint users have taken to social media and Reddit to express their disdain and search for alternatives.
Meanwhile, competing apps such as Monarch are claiming to see surges in new signups following Intuit’s announcement. Clearly, there is a strong appetite among consumers for tools that help them budget and make better financial decisions. Banks should take note, especially as they seek out strategies to increase and retain deposits and keep account holders engaged.
Currently, 3.6 million Mint users are on the hunt for a new platform—an opportunity for banks. However, this means they will compete with nonbanks such as Monarch or Credit Karma.
In 2019, Credit Karma launched its own savings account product that is FDIC-insured and advertises extremely high rates. Last year, it launched an online checking account product with cash back on debit card purchases. Earlier this year it launched a wealth management platform.
According to Numerator, management of personal finances continues to be a top concern across individuals of all income levels, but particularly among households making less than $40,000 per year. It’s safe to assume that these individuals are less likely to go into their bank’s physical branch seeking help. Three-fourths of consumers also indicate they are uncomfortable with discretionary spending and 75 percent think inflation will increase in the next few months. Currently, nearly 70 percent of respondents believe the economy will worsen in 2024.
Consumers are also looking for specific features. Digital banking is a non-negotiable, with 91 percent of consumers indicating it as a top factor when choosing where to bank. However, other historically essential factors have declined over the last several years. According to a 2023 survey from the Motley Fool, interest rates and low fees on checking accounts are less important today than three years ago. This is not to say these features are not important, but being locally owned is a growing focus.
Additionally, nearly 70 percent of consumers prioritize trust over convenience when selecting a bank, according to a survey from PYMNTS. However, to what extent varies depending on consumers’ credit profiles. Subprime consumers tend to prioritize convenience over trust, while prime and super-prime consumers prioritize trust. This points to the value of banks building and maintaining customer trust if they plan to remain or become customers’ primary financial institution.
Finally, 9 out of ten consumers want personalization through “quick, relevant, situational financial advice,” yet only 3 in ten said their bank offered it, according to a recent report. This brings into question the relevance and value of traditional personalized financial management tools that are widely embedded into banks’ digital banking apps.
The problem with today’s financial apps
A 2022 Vericast survey reports less than one-third of consumers seek financial advice from a financial institution. Perhaps even more concerning, 34 percent of Gen Z get their advice from TikTok.
Adding to this challenge, Millennials and Gen Z consumers say they want financial advice but don’t know where to start. And it’s not the questions you would expect, like budgeting tips and savings best practices. The most pressing concern among Millennials and Gen Z is how to invest. They’re looking ahead and want guidance for making better long-term financial decisions.
Even with apps such Mint, there is a high-level of self-service. Users set and work toward their own goals. Many consumers—particularly younger generations—want someone to tell them what they should do and help set reasonable goals based on their financial profile. It’s the guidance part they are looking for.
Younger generations do not know where to turn for reliable financial advice. This has resulted in reliance on social media. This often means TikTok ‘finfluencers’ who provide financial tips over social media. TikTok’s algorithm can amplify misleading or inaccurate information. This creates a huge opportunity for banks to become leaders in financial education for their customers.
The discontinuation of Mint is undoubtedly an opportunity, but it also signals a threat .Intuit, by way of Credit Karma, is coming after banks’ customers.
But to be fair, it’s not just Intuit. Personal finance app Truebill was rebranded as Rocket Money to further penetrate consumers’ financial lives.
However, what these organizations lack is the trust consumers still have in their local banks. Banks benefit when they tap into this strength and deliver on consumers’ need for trustworthy guidance. Credit Karma is already interacting with banks’ customers every single day.
Parker Graham is founder and CEO of Finotta, a provider of embedded fintech for digital banking