I was skeptical when I first heard about Online Quicken. Why now? Would it be a knee jerk reaction to a slew of start-ups launching their own personal finance management tool, like Mint.com, Wesabe and Geezeo? Would this mean a stripped down version of the desktop version of Quicken, a Quicken Lite so to speak?

The answer, like all things, is a little bit of competition and customer demand. But the result is a well designed application, bringing some of the best features of desktop Quicken and removing some of its complexity. Online Quicken is indeed a stripped down version of its big brother, but it has some welcome features to look for when selecting an online money management tool. As they put it, their primary goal with this release is to give you a “tool that is a convenient introduction to finance that helps save you bank fees.”

What It Has

• Automatic bank aggregation (using the same technology used on their desktop version)
• Ask the Community forum
• Automatic categorization of transactions
• Ability to rename and add custom categories
• Ability to add upcoming transactions
• Ability to view your actual balance including upcoming transactions with the RealBalance feature
• Interactive pie charts of financial information
• Custom views by date through slider controls
• Added security beyond username/password
• Ajax controls for fast and contextual editing of transaction data
• Automatic bill reminders based on transaction history
• Bill reminders sent to email and sms
• Inline and tabbed editing of transaction data
• Support on Windows and Mac browsers, including iPhone

What It Does Not Have

• Cannot import/export data or transfer data from desktop versions of Quicken
• Limited ability to add investments, CDs, mortgages and loan accounts
• Ability to split transactions into multiple categories
• Cash account
• Ability to add sub-categories
• Contextual recommendations, tips or ads
• Ability to add Wells Fargo (expecting to add it in February)
• Budgeting

Quicken Online helps users solve the problem of tracking their finances by simplifying the account aggregation process, but more importantly by providing a cash flow-centric view of one’s finances. While others focus on spending, Quicken Online focuses on the difference between what’s coming in and what’s coming out over a period of time. Rather than providing recommendations, they leave it up to users to cut through the data to make sense of it, while providing them with tools to slice it up in every possible way.

One of the most elegant features are the pie charts, which allow you to select an expense or income category and instantly view all associated transactions directly from the graph. You can then filter the transactions by date as needed.

Another feature is the automatic categorization, which has become the standard for any finance application that seeks to simplify the task of managing one’s finances.

A big advantage that Online Quicken offers is its Excel-like interface to quickly edit transaction data. You can edit transactions inline without launching a new window, and quickly tab to the next editable field quickly and easily. This comes in handy for users who’ve come to expect the speed of desktop applications when editing information.

One of the big challenges of an online site entrusted to hold your financial information is security. Online Quicken takes a small step by adding a second layer of security (see below) after the username/password prompt. The extra security asks a question that supposedly only you can answer, such as selecting the name of the bank added to your account among several other banks. It’s a variation of the secret question that makes it that much harder to hack into a secure session.

Finally, Online Quicken provides a persistent timeline slider that can be moved at anytime to filter the data on the page in real time. In addition to viewing by a preset category, such as past 3 months, it also lets you slide back and forth the start and end dates. It provides a nice way to take a snapshot of ones activity and compare it against another similar period.

So, what to make of the differences between Quicken Online and Quicken Desktop? From the Get Rich Slowly blog, J.D. interviewed Intuit’s Jim Del Favero, who further explains that:

Quicken Online is targeted toward non-consumers of personal finance products. There’s a large segment of people who do nothing around personal finance. About 41% of Americans live paycheck-to-paycheck. Quicken desktop products are for people who know they want to be better, and are willing to seek out help. Young consumers aren’t willing to do that, but they still have personal finance needs.

Quicken Online marks a bold entry into the online PFM space, with a strong emphasis on cash flow, reporting, and organizing one’s finances. It also heats up the competition with online banking, and only time will tell if the $3/mo fee will be seen by its users as a bargain or bust.

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This entry was posted on Sunday, January 13th, 2008 at 11:43 PM and is filed under wesabe, Mint.com, Personal Finance Management, Online Finance, Quicken. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.