Mint.com + Quicken: Its Impact on How Banks Engage Their Customers

I had been an active user of account aggregation services for years before switching to Mint.com several months ago. I could not have been happier with the services, ease of use and functionality provided by Mint. From my first login, I knew it would not be long before Mint.com was acquired. Their business model, the value of its customer information and the level of customer loyalty they have generated could not go unnoticed.  My only hope was that it was not acquired by a bank that would turn its services into its own marketing platform (you know there were several suitors).  My wish was granted when Intuit announced it would purchase Mint this week.  But what does this mean for how banks manage and measure customer relationships going forward?

The level of engagement banks have with their customers has been continuously decreasing. As in-branch transactions continue to diminish, banks try to engage customers through other channels such as online banking and mobile. Unfortunately, these channels are primarily transactional, which makes it difficult for banks to engage customers in higher value interactions (cross-selling, etc.). 

Mint.com and Quicken were already negatively impacting the banking industry’s level of customer engagement. With the merger, that impact will only grow. Once Mint utilizes Quicken’s technology and implements bill pay and transfer functionality, banks will begin to lose ALL direct contact with their customers.  Customers will no longer have to log into their institution’s online banking system. As customers get tired of paying for ATM fees, high interest rates, etc. they will use Mint’s “Ways to Save” feature to find a better solution or product. Banking products will become completely commoditized and banks will compete only on price.

Unfortunately, most banks won’t realize the extent of this impact until it is too late. “Engagement” is not a primary measurement for most banks.  They calculate success of a customer relationship based on the number of products owned, average balances, net interest income, tenure, satisfaction and cost to serve.  In some cases, Mint will actually increase the value of customer to a bank. As a customer reduces their use of their bank’s channels, the bank’s cost of service will decrease. Although that customer is more profitable, their propensity to attrite and switch banks increases because they longer have a relationship with their bank beyond fees, interest rates, etc.

Banks need to quickly realize the impact of the merger between Intuit and Mint and develop new and innovative ways to engage their customers (online and offline) or risk becoming a faceless institution that competes only on price.