Credit Karma and Mint, two popular financial applications with many millions more users than Digit, are about to roll out suites of new features that will make them feel more like robotic financial advisers, tapping customers on the shoulder when they could make better financial decisions.
One feature that both Credit Karma and Mint will offer is more automated tax preparation of the sort that Jane provided for Ender (though with much less robotic charm and thoroughness).
A number of newer start-ups have recently begun with similar ambitions and even more advanced capabilities than existing players. The new app Albert from Albert Corporation, which announced $2.5 million in seed funding last month, provides a personalized savings account as Digit does, but it can also look at existing car insurance policies and credit cards and ferret out better deals. Banks are racing to keep up with their own digital capabilities.
The start-ups and the banks are still far from delivering on the promise of a digital assistant that actually takes care of your financial problems for you. Credit Karma and Mint still require you to enter many of your own details. But all the players in the field are working with machine learning and artificial intelligence that will increasingly provide proactive analysis and advice rather than forcing someone to constantly check in.
Many venture capitalists and entrepreneurs are betting that in the continuing transformation of finance by technology, the financial assistant category will be one of the most lucrative.
“There is lots of opportunity here,” said Charles Birnbaum, an investor at the venture capital firm Bessemer Venture Partners, who recently put money into Albert. “This is an opportunity that Mint and the banks should have done for people already — made it really easy to have a good sense for what you should be doing with your money.”
The new personal financial advisers are taking a different tack compared with big-name financial technology start-ups like Lending Club and Square, which provide actual financial services: arranging loans and processing payments. Credit Karma and its competitors are betting that there is more value in being the neutral intermediary that helps customers find financial services and keep track of their various accounts.
Advocates of this business model compare the opportunity to the one that Google and Facebook spotted in media, where they serve as so-called platforms for other media companies rather than being media companies themselves. This approach allowed them to become the primary point of contact with the customer, a very profitable and powerful place to sit.
“By being Switzerland, and being neutral, in the same way that Google and Facebook are, we are finding the best products,” said Nikhyl Singhal, a former Google executive who joined Credit Karma as the chief product officer last year. “We don’t have the conflict where we are trying to sell our own product.”
Credit Karma in particular has been demonstrating how lucrative this can be by charging lenders and credit card companies for every customer it passes along. While the company does not say how much it charges, industry insiders say that Credit Karma generally makes $100 to $700 for every customer who signs up for a credit card, a significant chunk of the revenue that the credit card company will make in the first year. Credit Karma said it pulled in around $350 million of revenue last year.
The business model creates the potential for conflicts of interest if an intermediary like Credit Karma sends customers to a credit card company or lender that pays the biggest referral fee rather than the one that offers the best deal for the customer. But the companies are all adamant that they will succeed only if they are known for doing what is best for the customer.
Credit Karma now has 60 million account holders, 20 million of whom check in every month — about 10 times as many as its biggest rival, Mint, and nearly as many as some of the nation’s largest banks.
Founded in San Francisco in 2007, Credit Karma has been known for the niche service of providing customers with free access to credit scores, and advice on how to improve them.
Recently, though, the company has been using its large pile of cash from venture capitalists to buy and build new features for customers, including one function that searches for unclaimed property for all of its customers and another that can identify and dispute credit report errors through the site.
This week, the company is announcing its acquisition of a tax software company, OnePriceTaxes, that has been integrated into Credit Karma to allow free state and federal tax filings for every customer on the site.
Ken Lin, the founder and chief executive of the site, said that once Credit Karma had access to a customer’s tax filings it would have a much more detailed picture of that person’s finances and could turn that into new layers of financial advice — by identifying, for instance, ways to invest money with more tax efficiency.
For many, the best-known financial website is still Mint, which gained renown by allowing customers to track all their varied financial accounts in one place. It too makes money by pointing customers to outside financial products that pay Mint for each referral.
But Mr. Lin and others in the industry said that Mint, which is now owned by Intuit, struggled to maintain its early growth because it required too much work from its customers, who have to categorize their transactions and do not get much in return.
Al Ko, who became Mint’s general manager last year, acknowledges that most Americans are not willing to do the work to keep track of their finances in Mint. As a result, he has led a rebuilding of Mint so that it will do more of the work for customers, and make active recommendations rather than just serve as a place to keep track of a budget.
The first big step in Mint’s expansion is the announcement this week of a dashboard that will monitor bills and remind customers when they are coming due, with increasingly urgent notifications as the date nears. Mint is also making it possible for customers to make payments directly through it, rather than a credit card site.
Mr. Ko said that 6 percent of Mint customers failed to make even the minimum payment on their credit cards each month, a lapse that can lead to big fees and damaged credit scores.
Mint and another Intuit division, TurboTax, are also being integrated so that tax forms from banks and credit cards will be automatically fed into customers’ tax filings.
“I envision Mint being as ubiquitous as Facebook,” Mr. Ko said. “This thing that helps me make better decisions and never forgets.”
The banks, of course, are not happy to see companies like Mint come between them and their customers. Bank of America recently announced that it was working on its own artificial-intelligence-powered financial assistant, Erica, but it will not be out until next year.
Other new start-ups that offer some financial services want to expand to become the primary financial dashboard for customers. The so-called robo-advisers, like Betterment and Personal Capital, already have more details about their customers than Credit Karma or Mint, and are building out competing features. But these companies have been slow to grow at the pace of Credit Karma.
Digit, the company inspired by Jane, has been rapidly picking up customers, and venture capital money. Now it needs to begin adding features to come closer to the original vision out of science fiction.
“Ender was a guy who saved the human race but didn’t have time to do his own taxes,” Mr. Bloch said. “If you want people to have financial health, you need to do it for them.”
By NATHANIEL POPPER