FT-IT PERSONAL FINANCE SOFTWARE PIECE Peter Temple If personal software producers are to be believed, the UK market for their products is about to take off. One reason they could be right: the disparity in use between the US and the UK. Intuit’s popular Quicken product, for example, is reckoned to have some 12m users in the USA, but only 350,000 in the UK. If per head use were the same in both markets, Quicken’s UK sales would be about eight times their present level. Those who don’t use products of this type in the UK fall in the category either of those who regard keeping track of their money as vulgar, those who haven’t the time, or can’t be bothered. But the need for people to be more on the ball about their savings and investments - if only to plan for a comfortable retirement - suggests these attitudes could be on the way out. Quicken’s UK brand manager, James Taylor, says: ‘personal finance has taken off in the UK in recent years. There is more media attention and more awareness. But the UK is different to many other countries. In the UK, in contrast to some other markets, individuals can have large overdrafts, and so the perceived need for short term financial discipline has been less’. As time has gone by, the packages themselves have become more sophisticated, moving on from their original function of allowing individuals to keep track of their spending, categorise it, and reconcile it with bank statements and credit card bills at the end of each month. Now they do all these things, and enable investments to be monitored, updated and valued. While the software is easy to use and the recording of items such as standing orders can be automated, it does demand daily discipline on the part of the user in making sure that every transaction is entered correctly. If not, the process of reconciling at the end of each month can be painful and protracted. The advantage is that after just a few months’ use it is easy for the individual to see the patterns of regular receipts and payments. A simple example: pulling out information on interest receipts for tax return purposes, topical at this time of year, becomes a painless matter. In the past, however, packages like this have fallen down when it comes to valuing investments. Users have complained of them being cumbersome when used to set up accounts and enter transactions, and quirky when it comes to electronic updating of values - a particularly irksome point for active traders. According to both main players in the market, however, this is set to change. Automated links to external price sources on the web are expected to make lighter work of this task. But while international shares are included alongside UK ones, Microsoft’s Money package has yet to allow online updating of UK gilts, for example,
and unit trusts have been something of an afterthought. Intuit’s Quicken 2000 product, recently launched, is slightly more comprehensive in this respect. Where personal finance packages can score in the future, however, is in providing a seamless link with online banking services, allowing for online inspection of bank statements, and bill payment to be mirrored by entries in the software datafiles. Microsoft’s Money product has around six online banks signed up as partners in this way, whereas Quicken’s latest version currently allows only NatWest account holders to use the online interface in the software, although Intuit is talking to a number of others. Products like this are far from expensive. Even the premium-priced versions with extra bells and whistles are typically sold at under £50. But there is competition. This comes from two sources. One form of competition is that any half-way competent Excel user could design a simple worksheet to do the same job, albeit in a more rudimentary fashion. The second competition comes from the web itself. Download.com (www.download.com), for example, has a total of 149 separate packages listed under the ‘personal finance’ category, although few of these come close to duplicating the functionality of Money of Quicken. One that seems to get nearest, Silicon Programming’s award-winning Cash Express ’98, is available as shareware, with a registered version costing $20. Some of the functions present in Quicken and Money can also be duplicated by a mixture of standalone shareware products, if that is your preferred route. As Microsoft and Intuit slug it out for the hearts and minds of those who prefer the more straightforward route of buying conventional software, complete with the paraphernalia of linked web sites, integral content and personal finance advice and information, market share figures are getting blurred. Both companies claim their product is market leader, although Intuit does acknowledge that Microsoft’s launch of Money, and the fact that the product is sometimes ‘bundled’ with new PCs, has hit its share of the market. Bundling like this is a fact of life. Microsoft’s Gareth Arnold says: ‘Our research shows that 75% of people buying a PC are interested in using it to monitor their personal finances.’ But an even more interesting battle is shaping up. Some sole traders and self employed contractors use products like Quicken or Money to generate invoices, produce debtor lists, and perform a variety of other business tasks. But the software isn’t primarily designed with this in mind. Intuit is, however, eyeing Sage’s stranglehold on the business accounting software market, especially for those users who might that they have less complex accounting needs than average Sage customer.
Intuit’s established Quickbooks product, at £99, is being positioned for this ‘David and Goliath’ match. Meanwhile Microsoft is understood to be hatching plans for a small business package to slot in between its basic personal finance offering and the Quickbooks style of product.