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Companies Behind Online Banking - Envestnet/Yodlee

This is the eighth in a series of articles on companies behind online banking. Last week we profiled Gro Solutions. This article features Envestnet/Yodlee.

Envestnet/Yodlee: Masters of Money and Information Management

In this era of big data, he who has the information has the keys to the kingdom. Envestnet/Yodlee is known for its online personal finance tools that help consumers manage their finances. Eleven of the largest 20 banks in the U.S. are customers, as well as more than 1,000 companies, including startups and those in the global 500 ranks.

Truth is, while the personal finance tools are just dandy, the Yodlee story, though, is much deeper. The company sells some of the data it gathers from credit and debit card transactions to investors and research firms, who then unearth a bevy of information that is downright priceless. According to published reports, Yodlee has intricate details like the daily spending at McDonald’s throughout the nation and what visitors to certain theme parks purchased -- info so privy investment firms are said to have paid more than $2 million for an annual subscription to Yodlee’s service.

Envestnet/Yodlee is known for its online personal finance tools that help consumers manage their finances.

How does Yodlee get the goods? It collects transaction data from bank customers after they sign up to use online tools powered by Yodlee. According to the Wall Street Journal, supposedly, some information goes to Yodlee through “screen scraping”. If you’re wondering what the heck that means, say you use an app created by Yodlee and you give the app permission to access your bank account using your username and password, Yodlee can get your transaction history in those accounts.

Another thing that’s unique about the company is its incubator. The six-month program helps FinTech startups launch disruptive products that leverage transactional financial data. Only the best need apply, and must be ready to perform. Companies are expected to go hard on all elements on their business, from concept to completed product. Some 60 mentors have helped incubator companies like Wallaby Financial, SnapCheck, Datacoup, Coinbase, Accredify and many others.

The company sells some of the data it gathers from credit and debit card transactions to investors and research firms

There is a growing chorus of companies singing the praises of Yodlee. With an ever increasing number of consumers looking to manage their money online, a global bank needed to enhance its offerings to keep up with the latest financial apps and offer true value to their customers by adding interactive tools to help them simplify their finances and meet their financial goals. To address millennials and other digitally savvy users, the bank introduced a solution that is tied to a checking account, a short-term savings account, a long-term savings account, and a range of online money management tools. The organization turned to Envestnet® | Yodlee® APIs and categorization engine to display categorized transactions and help users easily track their spending. By extending the categorization feature to the home page of their app, customers could see their most recent transactions at a glance and get a better handle on their spending. Awareness has increased about the service that helps their customers get a clearer picture of their finances. Adoption of these digital tools continues to grow. The organization has won multiple awards for the intuitive UI and innovative spending and saving features. Given the success of their financial app, the company has started to promote their service to audiences beyond millennials in an effort to help other generations manage their money and meet their goals.

Jnyaneshaar Prabhu, CEO of iMiners calls the company a perfect partner. ‘iMiners needed to satisfy the standards set by The Shareholder Forum for verifying participants in investor communications. First, they currently have the most comprehensive, reliable and secure services available in the marketplace and the quality of Yodlee’s management convinced us that they will maintain this leadership. Equally important, they’ve proven themselves to be real partners in delivering unique solutions to the user privacy and reliability requirements of top-level, high visibility investors communications that the Forum supports. You can’t beat the combination of being the best and being dedicated.”

Yodlee, has however, come under fire over the information it discloses. The company has maintained that it “adheres to strict privacy standards to ensure that the transaction data in our database does not contain personally identifiable or attributable information.”

But you’ll find some who claim otherwise. It’s a debate that’s likely to continue. In the meantime, the company thrives -- published reports say its annual revenue has nearly doubled since 2010.

Anonymous   |     |   Comment #1
Yodlee was a stupid idea on the first place. Very few people signed for it and of those who signed had to change the passwords and user IDs at the banks later on.
I signed only one bank with $1 in the account just to see how it works. A month later I was unable to sign at my bank, someone had already changed my password without my knowledge. I called Yodlee and they say to read their disclosure statement in which is written that they are not responsible for anything connected with my account and that I'm using their services on my own risk.The rest of the story can be guessed by any of you.
Alon   |     |   Comment #2
I use a personal finance app named Geltbox Money that eliminates the need for third party aggregation services. the user can aggregate his own data without exposing private data to any third parties /web site. This new technology enables the user to download his financial information from any financial institution in the world
cactus   |     |   Comment #3
Giving access to all of your financial accounts to some unregulated outfit that has questionable motives, changeable privacy practices, unknown security, and questionable longevity - is a very bad idea. And they must be primary targets of the top hacker gangs.
Anonymous   |     |   Comment #4
Unregulated outfit?  WF just had it disclosed that its employees stole the identity of thousands account holders to open new accounts, etc.  And, where was the WF internal and external auditors?  And, and, no criminal charges!

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