In 2009, Peter Glyman and Shawn Ward, co-founders of Geezeo, a Tolland-based personal finance management software company, faced a possibility nearly any startup would envy: the chance at a $12 million dollar buyout from the Street.com, founded by investing guru Jim Cramer of CNBC’s Mad Money.
But the deal never materialized, leaving Geezeo in need of a new business model.
“We started off with a direct-to-consumer approach,” Glyman said, “but we realized selling direct to financial institutions provided a more clear business model.”
The decision appears to be working. In the past 12 months, Geezeo has doubled its client base from 150 to 300 financial institutions, including inking a deal last year with Birmingham, Ala.’s Regions Bank, one of the largest lenders in the U.S. with more than $140 billion in assets. Since 2009, Geezeo has more than tripled its employee count — from eight to 25 — and is preparing to add at least five new people this year with account management and customer service backgrounds.
Geezeo’s cloud-based software allows banks and credit unions to provide personal financial management tools to their customers, enabling consumers to track their transactions, categorize expenses in real time and monitor spending goals. The technology can also aggregate all of a consumer’s accounts, even those held at different financial institutions. Today, Geezeo’s software has more than 3 million users nationwide — with a collective 14 million accounts — and processes more than 10 million transactions a day.
“There has been a steady shift from branch-based banking to online and mobile banking,” Glyman said. “But banks, wanting to maintain that customer relationship, need to provide mobile tools.”
Glyman said his company’s growth is due in large part to partnerships Geezeo has formed with financial technology vendors who sell a suite of online banking services to financial institutions. In 2013, for instance, the company inked a deal with Q2, a virtual banking provider.
“We are more of a behind the scenes service that the bank’s brand as their own,” Glyman said, noting people are more trusting — and likely to use — services offered by their bank.
And, as smart phones proliferate, mobile device usage for banking is climbing rapidly. A 2013 Federal Reserve study found that nearly half of all smart phone users used mobile banking in the past 12 months.
But Geezeo allows users to take transaction tracking a step further; the software can bucket expenses into 16 different categories — from dining out and groceries to utilities and transportation. “If you buy a shirt,” Glyman explained “you can track that as clothing and get a text alert showing that expense against your clothing budget.”
It’s a service that younger people gravitate towards, according to Jill Nowacki, president & CEO of the Credit Union League of Connecticut. “Gen Y tends to be thrifty and focused on avoiding consumer debt,” she said. “At the same time, they expect a high level of customization, and personal financial management tools give them the control to make the financial management experience unique to them.”
Glyman said that provides an important cross-selling opportunity for banks to invest in financial management tools. For financial institutions, that can include promoting their loan financing and retirement planning to customers based on their personal financial goals. “If a bank sees that a customer has set a goal to save for a car,” he explained, “the bank can then target that consumer with information about loans, thereby providing a solution to a need.”
The opportunity for banks to data-mine for business — coupled with escalating consumer demand — has fueled the steady adoption of mobile tools among financial institutions. A recent Credit Union Times article noted that credit unions are signing up mobile bankers at a monthly growth rate of 9 to 10 percent, while banks are averaging about 7 percent growth.
Those trends, in turn, have driven Geezeo’s growth — and profits. “We continue to invest in our products and people,” said Bryan Clagett, Geezeo’s chief marketing officer. “Most significant has been in our investment in our data enrichment strategy.”
Glyman said the company is also looking to expand its relationships with colleges and universities in the state, including UConn and Eastern Connecticut State University. “We’d love to establish an internship program to attract students studying computer science,” he said.
The market opportunity, Glyman said, remains huge, with more than 15,000 financial institutions in the U.S. alone.
“We see our client base doubling annually for the next few years,” Glyman said, explaining the company will soon be launching a small business product and enhancing its retirement and investment tools to help users with more long-term financial planning.
