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Everyone wants a piece of your financial life. Apple, Amazon, Google and even Uber are getting into financial services. Neobanks offer all-digital checking accounts, and now Intuit, parent company of TurboTax, QuickBooks and Mint, wants to buy Credit Karma for $7 billion.
Credit Karma offers free credit scores, tax prep and helps people shop for credit cards and loans. Intuit says it wants to help everyone build a personal financial assistant, which would use your data to connect you to even more credit cards and loans. I spoke with Intuit CEO Sasan Goodarzi about all of this. The following is an edited transcript of our conversation.
Sasan Goodarzi: Our vision is very much — and it’s of course shared with Credit Karma — to put the power of choice in the consumer’s pocket. We truly want them to be able to carry around a financial assistant that, at any point in time, they can connect to a product that’s right for them and all the choices are in front of them. Part of the challenge is, if you’re picking a credit card, you don’t know if it actually is the one that’s right for you with the best rate. If you’re picking the auto loan, you’re more negotiating the fee or the monthly payment of the car versus you getting the best rate. This is about putting choice truly in the pocket of the customer and letting them know what’s right for them and improving their financial life. That’s really the vision that both Credit Karma and Intuit have, and together we believe we can accelerate it by 10 years.
Molly Wood: Let’s pivot to data. How valuable is that? One thing you’re getting with this acquisition is, of course, a lot of personal data that Credit Karma has been known for not selling. How valuable is that data, and do you expect to monetize it in the future?
Goodarzi: Let me start with our data stewardship principles: It’s the customers’ data, not ours. We will never sell the data, and the data will never be used without the customer’s consent. When they consent, it will only be used for their benefit. As we look ahead, doubling down on those principles collectively is important. It’s really pulling together the data for the customer, so it’s in their hands.
Wood: Just as a practical matter, can consumers say, “I may have opted into sharing my data with Credit Karma, but not with Intuit, and I would like to withdraw”?
Goodarzi: Yes, absolutely.
Wood: It’s a pretty big purchase, and we’re seeing a lot of other consolidation, and the rest of the tech industry is having questions asked about consolidation and antitrust. Are there any concerns?
Goodarzi: Yes. We’re going to be working very closely with regulators to provide all the data that they need. Thanks to the market structure, we’re actually quite confident in the outcome, because at the end of the day, a regulators’ job is a very important one — to ensure that whatever is being done is good for the end customer and the end consumer. In this case, this is going to fundamentally propel the choices for customers to help improve their financial health. We feel really good about the impact this is going to have for the end customer.
Wood: How does consumer financial literacy play into all of this? Do consumers have, right now, the financial literacy to play at this high level, or is it part of your goal to increase that as well?
Goodarzi: Our job — and Credit Karma does this very well today — is to make things drop-dead simple so that the consumer is making a choice of what’s right for them in a very, very transparent fashion. Making sure it’s easy and seamless and intuitive will always be the goal. With that said, part of what the two companies are separately already doing — and when we bring them together, it’ll just simply accelerate it — is educating consumers on how to improve their credit rating. At the end of the day, your credit rating drives what you’re able to get and at what interest rates, so helping them understand the utilization on credit cards, helping them understand making payments on time, helping them set goals around making all their payments on time. Those types of things are what teaches consumers what they should be doing so that they can improve the health of their financial life. That’s part of what we will continue to do and accelerate doing beyond just connecting people to financial products, is educating them so that they can ultimately improve the health of their life.
Related links: More insight from Molly Wood
Here is a column I wrote for Wired back in November about how a big part of the pitch behind a lot of these neobanking services is to try to improve your financial health because they assume your financial health is not great. I call it monetizing your brokeness, and it’s part of the Intuit and Credit Karma pitch, too, in some ways. Many of these services are offering tools to help people save or deal with crippling student loan debt, or even get access to their paychecks a couple days earlier because so many people are living paycheck to paycheck. It’s a depressing trend, although if it actually helps and actually can improve people’s financial health and literacy, then I guess yay technology?
The scooter company Bird has struggled to make money renting scooters, so it’s hoping to make money by convincing consumers to use the app they use to rent scooters to pay for things by scanning QR codes, those little matrix bar-code things that have literally never worked for anything, so far. Maybe Bird can crack that nut. We’ll see.
Also, in retail and tech, Amazon opened its first grocery store in Seattle on Tuesday, Amazon Go Grocery. Like other Amazon convenience stores, the grocery store has no cashiers or checkout lines. I guess after basically reducing Whole Foods to a warehouse for Prime delivery goods, Amazon figured, why not just go ahead and kill it off with robots? Poor Whole Foods.
California’s new gig worker law just hit the grocery delivery company Instacart. A judge in San Diego ruled that Instacart has misclassified almost all of its California workers as independent contractors instead of employees. Since this classification is the key to Instacart’s entire business model, the company plans to appeal.
Finally, having successfully launched Disney Plus, Disney CEO Bob Iger has decided to drop the mic and move on. You can leave, Bob, but we still want our Baby Yoda merch.