Quicken is launching a new cash management product for small business owners that will compete with banks and pull bank account data from aggregators.
The product is being released as an upgrade level for the company’s personal finance application,
“Quicken Classic has had a business tier for many, many, many years,” said Tara Pugh, principal product manager for Quicken Business & Personal. “What we’re doing with Quicken Simplifi … is we’re finally adding that part of the business.”
The new product, called Quicken Business & Personal, is designed to meet the needs of the self-employed and small business owners by bringing together business and personal finances in one mobile interface.
“We’re really trying to make this whole process simple,” Pugh said, “so that you, as a business owner, can invest your time in the things that matter, which is your business, your customers and growth of that business. not managing your accounting system.”
Traditionally, managing business and personal accounts requires switching between and sometimes paying for multiple programs. “When you’re younger in business, the reality is that the income you earn from your business is your personal income,” Pugh said. “Seeing money as just personal and just business, for a lot of people, doesn’t tell the whole story.” The Quicken Business & Personal product contains options for a user to switch between separate and combined dashboards for their personal and business accounts in the application as needed.
Since Quicken is hosting all of a user’s sensitive financial data in one place, Quicken uses 256-bit encryption for both its newest product and its flagship application, Quicken Simplifi. “We follow all the industry security around banks as well,” Pugh said. “We work closely with the three aggregators we use, and they definitely comply with the bank’s requirements for aggregating their service.”
Speed up uses
Quicken’s product joins a collection of fintech companies, such as Sage, Freshbooks and Xero, offering financial services to small businesses. The banks that many of these small businesses use to facilitate their transactions do not yet have the same in-house cash flow management offerings for their customers, according to Alenka Grealish, principal analyst in Celent’s financial services practice.
Third-party fintech software providers like Quicken are currently ahead of banks in the workflow sector, Grealish said in an interview, because “they’re already helping small businesses with their workflows, whether it’s managing accounts payable, receivables and of course net cash. of money.forecasts Too often small business fail not because they don’t have a good business model, but because they had a lack of money that surprised them… so forecasting is a really important element.
The Quicken Simplifi app currently includes a
For banks, collecting a user’s financial data in the way Quicken is doing offers them an opportunity, through the customer’s consent, to gain more access to additional information they would otherwise not have.
“Business bankers are keen to know if a new customer has money parked at another financial institution (FI) or is an active user of another FI’s credit card,” Grealish wrote in one.
Data collection between banks and third-party financial software providers is becoming common practice in the industry, whether for personal or business accounts.
“Banks have long had one-way sync and two-way sync for personal and business,” Grealish said. “They’re much more interested in offering it to businesses because they’re hoping that businesses will pull more data into their platform and allow them to have better visibility into their cash flow.”
Greater cash flow visibility would also give banks the ability to do cash flow-based underwriting for small businesses that might not otherwise qualify for a traditional loan underwriting method. “They have a huge incentive to do this for businesses,” Grealish said. “Getting permission to use it for underwriting, whether it’s just a small business loan, credit card, line of credit or term loan, they’re going to want to have more data because more data means more visibility and greater ability to assess risk holistically”.
The new Quicken app feature should give it an edge over banks in marketing to more entrepreneurial consumers, Grealish said.
“Individuals who already use some personal financial management software are quite diligent,” she said. “It’s methodical to have to do that in the beginning, and that’s a part of the population. So if they’re running a business, the conclusion would be that they’re probably already using business software. If they’re starting a new business then that it would be, “Oh, I’m starting a business, and I’m a current customer. Wouldn’t it be great if I already knew the interface, I’d just choose Quicken.”
With Quicken adding their Business & Personal feature to their already existing Simplifi app, the company is initially targeting the product at an existing customer base of individuals who manage their personal finances through Quicken.
“The sweet spot is someone who is already diligent and comfortable using software for their personal financial management, so of course they will use software for their business financial management,” Grealish said.
Next steps for the new Quicken product will include integration with other applications small business owners use so they can consolidate existing data by migrating it.
“Right now it would be a manual process,” Pugh said. “I want to continue to build more features, more solutions, a lot more integrations like that. That’s going to be something that I’m going to be looking at over the next year, two years: what are the things that we can do for it that will make this product better for our users.
