Fresh out of beta Moneysmart reveals bank integration, master plan

Moneysmart, the online personal finance manager (PFM) we covered last year, will be exiting beta in the next few days. It sports a new look, iOS and Android apps, and now, direct integration with all but one South African bank. Absa is yet to give Moneysmart its blessing, but CEO Tobie van Zyl is confident that an agreement will be reached by the end of this year.

With big name backers and a maturing feature set, Moneysmart is coming out guns blazing in its bid to lead a pack of new personal finance tools that aim to give you a better understanding of your finances.

To work its magic, Moneysmart initially required its users to manually upload their financial data. Now, thanks to integration with international banking solutions provider Yodlee, Moneysmart can connect directly to internet banking accounts, as well as other account types from Woolworths, Virgin Money, Discovery, Kulula, Foschini and Edgars. Yodlee, by the way, also supports Moneysmart competitor 22seven, as well as Nedbank’s recently announced My Financial Life.

We met with van Zyl and Callan Vorster, CTO and product manager at Moneysmart recently, and gained insight into where Moneysmart is headed, the identities of its financial backers and growth since it was soft launched in November 2011. We also learned how competition with 22seven affected Moneysmart’s business and why it chose to seek an international technical partner, instead of looking for local talent.

In the coming weeks, Moneysmart will roll out features such as transaction splitting and categorisation, useful for example when purchasing clothing and food at a single retailer, but the company has bigger ambitions beyond feature additions.

Ultimately it wants to become the quintessential source for anonymous consumer financial data. Companies in various industries, especially the financial industry — think insurers, brokers and consultants — could mine this consumer data to proactively tailor their services for an ever changing economy.

Moneysmart aims to make this data available through an API which will also be available to developers who can create applications that augment the PFM’s monitoring and advisory services.

Van Zyl revealed that Moneysmart’s user base is growing steadily, currently standing at just under 10 000 registered users. Interestingly, Moneysmart went through its biggest growth spurt around the time 22seven was launching.

22seven was widely lauded for its innovative user interface and its seamless retrieval of financial data from its users’ internet accounts. “22seven has provided a great solution, and we have a lot of respect for their efforts,” says Vorster. Moneysmart however, launched with a manual approach, requiring its users to manually export and upload financial statements in CSV format. It was a gamble. In an effort to get the jump on competitors, Moneysmart would have to stand by as 22seven launched with the more attractive approach; at least that’s what pundits believed. The response from the public and banks wasn’t exactly overwhelmingly positive. 22seven came under early criticism from banks, warning their customers to be careful of disclosing their internet banking passwords to third parties.

Moneysmart sat back and watched the scene play out while registrations on Moneysmart ballooned to “between 300 and 400” signups per week. According to Vorster, on the back of 22seven’s media frenzy, the public warmed up to the idea of a local online PFM and found Moneysmart’s manual approach appealing — users can also manually create accounts and transactions. Moneysmart later became South Africa’s first and only independent, end–user PFM to be an authorised and registered financial services provider after successfully applying to the Financial Services Board. With that in hand, it is launching an automated system, but will continue to offer its manual service.

Moneysmart’s choice of technology — HTML5 — also means that it’s available on more devices than 22seven, who opted for Adobe Flash. The technical work required for Moneysmart was outsourced to a Dutch company, Faster Forward. When questioned about why Moneysmart didn’t seek local talent, van Zyl replied that despite difficulties inherent in “co-ordinating a project over Skype” it was more financially feasible. He added that what ultimately swayed the decision, was the development company’s passion and enthusiasm for the project. There was an “ethos overlap” which lead to the company becoming an official partner of Monesmart, tying their fates together.

Van Zyl tells us that Moneysmart secured funding from Johan Schoeman and GT Ferreira, Chairman of RMB Holdings Limited.

Moneysmart continues to operate as a free service and as user interaction with the service grows, the PFM will make money by suggesting financial services and products that align with individual users’ financial behaviour and data.

There’s no clear winner in the personal finance space in South Africa as yet. Other contenders include MyBudget, 6Cents and mymoolah. As we watch solutions battle to emulate the success of Mint and the Peter Thiel backed Xero, it remains to be seen if local end-user PFMs can win consumer mindshare — and trust — and continue to stand their own against banks.

With Nedbank launching its own system, it shows interest in the field, but it might also be a harbinger for an uphill battle for third party solutions. In-house solutions endorsed by banks might seem more compelling to consumers who are continually urged to remain extra cautious when it comes to online security matters.

When asked if Moneysmart was built with an exit strategy in mind, van Zyl resisted the notion. Perhaps we might see some sort of white label agreement emerging. If anything, pooling anonymous user financial data is a big idea, and if only for that reason, we hope to see Moneysmart succeed.