Credit Karma launches Net Worth aggregator

The U.S. startup specializing in financial services for individuals, Credit Karma has just announced the launch of a new offering taking the form of an account aggregator. Acquired by the American financial management and accounting solutions provider Intuit in 2020, Credit Karma is thus pursuing its diversification strategy while justifying the integration of Mint.

FACTS

• Credit Karma has just announced the launch of its new service called Net Worth. As its name suggests, this service will help its users to visualize and follow the evolution of their net worth, i.e. what they have left after deducting their expenses (loans, mortgages and other credit cards).

• In addition to this asset viewer, the Net Worth service will be enhanced with new features to help users :

  • maximize their credit card rewards based on their spending habits,

  • diversify their investment portfolio through information sharing, for example.

• Net Worth is currently being rolled out in the U.S. to the most financially savvy consumers with a credit score above 720 (the U.S. average).

• In order to access the service, users must also agree to allow Credit Karma to access their mortgage data, brokerage accounts and financial accounts in general. 

CHALLENGES

• To highlight the coherence of a group : Intuit historically offered personal finance management services through its Mint offering. By acquiring Credit Karma, the financial management solutions giant consolidated an already rich offering. Mint's activity was thus integrated earlier into the Credit Karma teams, which now showcases Mint's 15 years of experience through Net Worth.

• Consolidating a multi-tasking tool : Credit Karma is moving closer and closer to a generalist PFM model, which centralizes all the personal finances of its customers. The start-up already offers Credit Karma Money (combining current account, credit card and savings) as well as a fun cash-back offer with Instant Karma or even a car insurance service with Karma Drive.

• Convincing more and more users : With a new additional offer, Credit Karma intends to convince new customers while the start-up already claims more than 120 million members in the United States (nearly 130 million across the United States, Canada and the United Kingdom).

MARKET PERSPECTIVE

• Account aggregation remains a core business that many alternative financial players are turning to in order to finally offer an "all-in-one" service to their clients. This market has thus become a competitive field representative of a fundamental trend, pushing various players to offer similar services.

• Thus, if Credit Karma is positioned today, the company is originally specialized in credit scoring. But it is now competing with Curve (and its aggregator card model), the reference Open Banking Plaid or even players from the comparison market like Credit.com.

• If this model seems to smile to alternative players, it is more complicated to defend for traditional financial players, as illustrated by the recent example of the closure of Yolt.