Hot Financial Trends: Finovate 2009

I'm just back from the Finovate conference in New York City, and I'm still spinning from the trip. It was an entire day packed with fresh, hot coffee, the opportunity to mingle with top financial execs and entrepreneurs, and more than eight hours of "finovative" show-and-tell (that's "financial" and "innovative" put together, if you needed an explanation). Finovate was pretty exciting, and I hardly know what to share from the experience first (did I mention the never-empty vats of tasty coffee?)

After seeing 31 demos from all kinds of financial and technology companies (some hoping to hook banks as customers and others geared directly for consumers), I started to see some definite trends that should soon be headed your way one way or another:

Charitable giving, at your fingertips

It's no longer just about how much wealth you can amass or how much money you can save. Online personal finance sites are taking money management a step further by integrating charitable giving directly into their interface, giving the act of giving as much weight as their budgeting or saving tools.

Tile Financial, for instance, is an online PFM geared towards generation Y (that is, those aged 15 to 25). Its motto is "Spend, Grow, Give." Not only does it teach teens and young adults how to manage their money, but it also prioritizes giving back to the community. Tile Financial offers a filter that allows users to choose a charity based on cause, location, and size. While Tile Financial seemed to me more for rich kids needing to learn how to handle assets passed down from their parents, I applaud the attempt to instill good values into these "High Net Worth" young adults (after all, they probably have more to give than most). By teaching the Wall Street execs of tomorrow the value of giving back today, our country's economic future may become just a little bit more secure. Tile Financial is partnering up with a soon-to-be-named major banking institution, and then the service will be available to the public (probably in the first quarter of 2010).

Kasasa is another online banking platform that "helps you make charitable giving part of every day." As you earn money from its high-yield checking accounts, you can opt to donate to one of five charities (three national and two local). Make a one-time donation or set up automatic payments to the charity of your choice. Or, if you don't feel like being charitable, cash in your returns for iTunes credits.

The next wave of widgets

We all know about widgets (those movable boxes that you can drop in and rearrange on your iGoogle, MyYahoo, and Facebook pages). You choose the content that interests you, and then feng-shui it to your liking for a personalized overview. This totally customizable experience will soon be coming to your bank's website, thanks to the innovations of companies like Yodlee. If your bank embraces Yodlee's latest advancements in creating a personalized online financial management system, you could be choosing which widgets you'd like to see on your "dashboard" when you visit your checking, savings, or credit card account online. Examples of widgets might include your payment and bill history, latest transactions, net worth, and budget.

MoneyStrands is also widget-based, though it's direct-to-consumer. This online banking interface corrals your transaction details, balances, and budget, and even offers popular coupons based on your spending patterns. You can customize your experience by viewing all transactions made with your debit and credit cards, and even filter them by searching for (or excluding from your search) specific merchants. Further personalize the financial management system by tagging your transactions into categories to more clearly see where your money is going.

Mobile banking is catching on...slowly

PaybyMobile and BlingNation both presented at Finovate, but I don't anticipate a widespread adoption in the US soon. BlingNation is a company based out of Brazil, where it has created that country's largest alternative payment network (i.e., mobile banking system). Their product would allow transactions to happen via cell phone by sticking a "bling tag" on it. Tap your bling-tagged phone to another phone to intiate or extract payment. Sounds pretty cool, but the need isn't entirely clear nor is the network in place yet.

PaybyMobile is a company from Ireland that offers an alternative way to pay when you shop online. Basically, you would load funds onto your phone in a store or at an ATM, then choose the "pay by mobile" option that would appear at checkout on a merchant's website. You receive a code that you then text to the merchant to pay. Like BlingNation, this mobile payment option won't be available in the US for awhile. It's first going to the UK and then Germany.

Emphasis on educating young people

Thankfully, entrepreneurs are sensing the need to educate young people about personal finance. A great example is Cents City, an interactive tool created by a Washington D.C. teacher of the year and an avid video gamer. Together, Felix Brandon Lloyd and Todd Waits have created an elaborate city in cyberspace where kids can learn about saving, budgeting, and credit. The watered-down version is free, or you can upgrade to the "Passport Edition" for $4.95.

Slightly older kids (aged 15 and up) who have real money to play with can learn how to budget and invest at Tile Financial (mentioned above). And for the rest of us who are really just big kids at heart, there's Kapitall. Kapitall offers a new way to invest that makes choosing stocks feel like a really slick (yet educational) video game. As co-founder David Neubert says, "We want to do for investing what Apple Macintosh did for computing."

Keeping up with the Joneses'

The last major trend I picked up on at Finovate was the ability to anonymously compare your financial situation to that of others. Tile Financial lets its young-adult users compare how their spending, saving, and giving habits stack up to those of their peers (looking good to other teens is no doubt a major incentive for these young money managers to budget smarter and invest wiser). MoneyStrands also gives its users the ability to compare their financial situation to that of other MoneyStrand users, anonymously of course. And Credit.com, via its new Credit Report Card product, tells you how many others in your state and across the country have credit scores that are the same or better than yours. 

There's still more I want to share with you from Finovate, so stay tuned for additional cool highlights about products and services that will impact you.