Morningstar sells HelloWallet
KeyCorp liked a technology it got through a partnership so much that it decided to put a ring on it.
The $134.5 billion-asset company announced Wednesday that it has agreed to acquire HelloWallet, a personal financial management product it has offered its bank customers since 2015, from the investment research firm Morningstar. Financial terms of the deal were not disclosed. About 36 HelloWallet employees will join Key and will continue to work from Washington and Chicago.
HelloWallet’s software scores its users financial health by looking at factors like whether they have a credit card balance and how much equity they have in their home. From there, the app offers tips on how to improve the score.
“It has been a huge success for our clients,” Dennis Devine, head of Key’s consumer and business banking segment and co-president of community banking for KeyBank, said in an interview. “It’s taken off."
Devine says the service is used by “hundreds of thousands” of customers. He said users report that they feel more confident in their finances, too. For instance, the service has helped them realize they need to establish an emergency fund or spend less than they earn.
The success is a rarity. Personal financial management tools, often lost in a tab of online banking, have taken heat over the years for failing to generate use. In the last year or so, however, banks have been investing in technology aimed at helping consumers improve their finances in an attempt to offer something they will actually use.
The HelloWallet scores, which are visible on a mobile banking app or within online banking, also show customers how they compare to their peers. As part of the experience, KeyBank connects customers to bankers — by phone or in branches — who offer additional tips on how to improve their financial wellness scores.
Devine said the digital-first experience is like a doctor’s checkup but for finances, and said it has helped make customer engagement less transactional. Employees are now trained to discuss financial wellness and how to improve the score, and that Devine said that has led to a employee morale boost.
USAA also publishes financial health scores. However, most banks have yet to offer something similar with the exception of publishing credit scores to customers and noncustomers. FlexScore, which is now owned by the advisory firm United Capital, also generates a number meant to represent a consumer’s financial health.
Morningstar acquired HelloWallet in mid-2014 for $52.5 million, including an existing $13.5 million stake it already had in the company.
The deal aligns with the long-term strategies of Morningstar and Key alike, said Brock Johnson, head of global retirement and workplace business for Morningstar.
“As HelloWallet's largest customer, KeyBank was HelloWallet's single greatest source of new users and this agreement allows them to advance their mission even further,” Johnson said in the release.