Perhaps also because we are running 4 companies through Xero it could possibly entitle my team/staff to a few free personal accounts?

We run the accounts on Xero for HireThings, two property businesses, and a trading company (so 2 x GST & 2 x non-GST).

Peter

The problem I’ve found is analyzing the grocery spend. I know we spend too much on groceries but beyond that all I know is we spend almost all of it at New World. It would be nice to be able to see the alcohol spend versus veges etc

We use Fly Buys, so New World know what the breakdown is but they won’t tell me. I’ve written to both Foodstuffs and Fly Buys requesting my “personal information” and neither of them have replied.

So it seems the only alternative is to analyse the till tapes - which I’m not in a hurry to do.

I’ve written to the Fly Buys to give me

I work for one of the top banks here in NZ. Suffice to say that we are well aware of the opportunity in this space. It’s great to see that there is latent demand in the market - as well as a clear understanding in some corners around how difficult it becomes to implement an engaging solution to what appears at first glance to be a straightforward issue. Most of the comments above touch nicely on the myriad of considerations in this space. I am confident that we have answers & proposed solutions on them all, and others - albeit no product/service in the market…

I could say much more than that on our thinking & plans, but as you can understand its highly confidential.

I will however point a few things out…

Firstly, that a sustainable commercial model for the likes of Mint & Wesabe is not clear. Unlike xero et. al. which have a compliance, regular-use offering & can therefore charge their clientele, that proposition is not going to fly for personal users. A personal user ofering is going to have to be all abount engagement, convenience, and possibly community (not that Xero et. al don’t have those things - they just also have a quantifiable value based on existing and necessary business practice on which to price that offering).

Secondly - big banks can do this kind of service / functionality well - check out Bank of America’s MyPortfolio offering. BoA has 2 crucial advantages over start-ups - a much bigger locked in audience in their existing online banking user base (in ~10 months, BoA has more users than all of the competing start-ups combined, yet only 10% of their own customers have signed up so far), and cross-sell / up-sell into other products and services around which to build the business case.

Finally, on the local scene there are a number of start-ups around - see xSave.co.nz & whostolemymoney.co.nz… and suffice to say that Rod & co. have already thought of this opportunity…

Rowan - drop me a line if you’d like to discuss further. We could well do with a savvy customer perspective to help sway the business case in the right direction!

Some observations

1. Unlike businesses who have to do this for compliance reasons, individuals will choose to do this -> implies per your suggestion it has to be super simple.

2. I think this is a progressive thing for consumers as it is essentially learning new behaviour - its hard enough just starting to look at income / outgoings so maybe that’s where you start and move progressively onto categorising

3. If it could be tied into ways to improve consumer’s financial position (basic assessment of interest paid and better deals available or a/c consolidation) then I think it would be more compelling

4. Tying it into net worth or some kind of financial goal and the actions you need to take to get there would be cool - kind of a mini mash up between xero and plan hq…

5. My own personal experience is that this becomes top of mind when you move from a strong cashflow position to a weak one :)

i’ve designed 33percent to deal with my needs. Its not for small business, its just for people who want to easily track bank transactions. and have gst sorted and archived, and fed into IR3 at year end. So any ideas/requests etc, let me know and I’ll look at building them in.

its based on wesabe/mint/xero stuff. uses wesabe like tags to classify, and auto-classifies based on user and shared patterns.

The main thing it does is sort out your GST (if you’re a contractor), then feeds this in to a IR3 at the end of the year.

its very alpha at the moment, but will be refined over the next few weeks. Hopefully BNZ will rediscover my application for PC banking service, so I can automatically download data.

I hesitate to mention it, since it is alpha, but… hey, seize the day right?!

What a top idea. I’d love to see bank transactions get sorted through Xero.

Cheers, Mike

The never ending migration of institution capabilities in financial technology from the wholesale end down through mid tier businesses and private banking to the normal retail customers still applies here. So yes, we will eventually get great tools like the ones you’d like to see.

I know I am keen to use them but remain sceptical on when they will arrive.

The problem is even large instos don’t have this working well yet (look at the trade matching problem in investment banks for example) and even private banks and financial advisers don’t handle the consolidation problem for people with investments all over the place.

Let alone tracking that chocolate bar, although I’d argue why bother.

I agree we can’t rely on banks to deliver this, they will always be aligned with delivering their own product’s data better than any third party. Especially with more bank consolidation on the cards.

Even then, banks like anyone need to make a buck out of it somewhere to pay the light bill.

So it falls to the independents like xero and saasu and wesabe and mint (and more)to consolidate, but we need to keep context - this has been a challenge for hundreds of years. Fortunately we are better placed to do it in the next 5-10 years than at any time before. Fingers crossed.

Cheers, Peter.

I think it’s a great idea for Xero. I can see ‘Xero personal’ as a great free/cheap tool that would get a lot of traction in the market if it could provide a personal profit/loss statement. It would provide another channel to promote Xero too.

i classify each transaction into one category only, i am happy to live with the inaccuracy. it remembers what the last classification i used was and next time around 80-90% of my transactions are automatically classifed

i get a simple page and a couple of graphs < 10mins per month. does it help ? i’m not sure, i look at it and pick 1 thing i need to fix every month. usually the same thing every month, less takeaways

it is interesting to watch petrol become a substantial part of the budget and i live close to work too

it is a real shame the banks can’t do this. They are in the prime position to do so, and think of all the money/time it would save. if an existing customer applied for a home loan and the bank could just print a copy of their latest budget, rather then the user having to guess their income/expenditure. not to mention all the other budgeting services they could offer, even charging a few dollars per month for the added budgeting service.

i don’t have much faith in banks either, but i must say my dealings with nz banks is about 100 times better then the service i have got from hsbc in the uk, which was even worse then the service from westpac (which a refuse to use anymore).

If you can get data out of the banks (ala Xero), I’m pretty sure you’d be able to do some categorisation for people using Merchant Category Codes from credit card purchases. It would involve matching standard detail fields in bank transaction listings back to MCC numbers (ouch), but if it weren’t difficult everybody would be doing it ;o)

See these PDFs for how detailed the MCCs can get:
http://www.anz.com/Documents/Business/CommercialCard/Merchant_cateogry_codes_control.pdf

http://www.mrsc.org/GovDocs/P58mcc_codes.pdf

Financial co’s use these themselves to do data mining on purchase types for a raft of reasons that would freak most people out. With matching, you might also be able to apply these to eftpos transactions. That leaves cash transactions out, but I can’t think of any way other than self-tagging for that.

Of course, the cynic in me says that people only say they are buying a PC to manage their finances because it helps them rationalise the purchase. Once they have the machine the rationalisation is over - so they don’t actually have to go to the effort of following through! Or, perhaps they start and then realise they would rather not know… it is easier to keep yourself ignorant than to change your lifestyle ;o)

However, lately I feel like I just don’t derive any benefit from the huge effort involved in the upkeep.

You say there is an opportunity, but you aren’t clear how that opportunity is different from Mint and Wesabe — at the end of the day you still need to give these services access to your private banking login (which is something I’m not prepared to do).

Great post, thanks!!