Get InTuit with Credit Karma: A real look at an Industry Transforming Move
Credit Karma’s business model is fascinating and with 50 million users I’d bet a cool Benjamin that if you’re reading this, you’re one of them. In fairness, I’m not making a really risky bet by putting Mr. Benjamin on the line because Credit Karma isn’t just changing the game, they’ve become The Blueprint for it.
Speaking of The Blueprint, when I said that, did you automatically start thinking of KRS-One’s studio album Ghetto Music: The Blueprint of Hip Hop? If my guessing game is still on point, I’m going to go ahead and say no, of course not. I just totally pulled that analogy out of the left-field, but it will all make sense in a few so keep reading.
Now if I’m wrong and admittedly it happens sometimes, you may have been thinking of KRS-One and if so, okay I see you pimpin’! You are my kindred spirit and I appreciate you. I appreciate you because that means you too have the ability to think about Hip Hop in terms of finance and in this case, can also see this old school Hip Hop album as if it were one of the “Big Banks”. A bank which is representative of classic style like the entire Boogie Down Productions crew. But just like banking times have changed and like the music industry, it has moved forward. With that in mind, if I were to say The Blueprint again, I, like you, would now be thinking of Jay-Z and his 2001 studio album, The Blueprint.
Jay-Z’s studio album laid the foundation for an entirely different vibe of music that captured the heart of the culture and propelled his image of a former drug dealer into an ideology of him as a forward-thinking business mogul of billionaire proportion. Credit Karma, like Jay Z has captured the hearts of the culture and took a very uncomfortable topic and packaged it into a brand. Jay Z took the controversial topic of drugs and he commercialized it so well that his brand transformed across many genres including Rock, Hip Hop, Jazz, and Pop. Credit Karma, like Jay-Z has taken a very uncomfortable topic like credit and they’ve used their technology and brand marketing to transform the conversation around it in a way that speaks to everyone from Baby Boobers to Gen Y and in essence like my man Jay have finessed the game.
Credit Karma has some of the best technology in the market and they have somehow managed to dazzle the industry while simultaneously manifesting a user experience that's bar none. It’s bar none because their technology is intellectually curious and intellectual curiosity is not only interesting but also sexy. In world where the FINTECH market is so over crowed companies have one shot at acquiring a user, so they have to dazzle their users by creating a unique user experience so intoxicating that the user continues to come back for more. Credit Karma has mastered the art of what drives users back for more. If you haven’t already, go ahead and log in to the app. Once you do, you’ll find that they don’t take a one size fits all approach to customer acquisition. Each customer is uniquely targeted, and the products and services marketed to them are based on their individual needs, income and credit profiles. They’ve approached their business model from the vantage point of the user in a way that I’ve never seen before.
Credit Karma has already taken into consideration the cumbersome effort required by users to decide between credit cards or mortgage companies and they’ve delivered the minutiae of it all on a user-friendly silver platter, well not exactly a silver platter, it’s more like a 6”-7” smartphone screen but you get my point. Complete with monthly love letters and words of affirmation, they’ve penetrated the human psyche and have provided both comfort and guidance on life’s hardest financial decisions. What’s even better? Well for most products they will tell you what you’re pre-approved for without as much as a hard or soft inquiry that will show up on your credit report and if you are rewards enthusiast like myself then there is no way you can convince me that this A.I. isn’t for lack of better words, Fucking Sweet!
Now let me circle back, here is where it gets scary for the KRS ONEs of the game- I mean, big banks. Intuit is purchasing Credit Karma, and on the surface, you may be thinking, Yay! A win for all things Capitalism. But if you are KRS-One, you should be thinking here comes Jay-Z about to infiltrate my entire market and make people forget that I even had an album called The Blueprint. What makes this acquisition exciting for Credit Karma but unbelievably scary for big banks is that this acquisition will create an arsenal of tools for Credit Karma’s A.I. to leverage. For one, they have built their entire model on data so with TurboTax at their fingertips they will now have the benefit of not only your credit report but also, your tax return. If you process with them then it will include your prior and current earnings and well the A.I. will do the rest. Yes, the A.I. which they’ve yet to develop will tell them based on a series of formulas what your future earning potential will be, what you qualify for based on your Debt to Income Ratio and the whole idea of approval odds will reach an entirely new level. And if they can use that intelligence to qualify you as a high earner, they can begin a marketing and product strategy through Credit Karma that’s going blow- your- mind.
Oh, and don’t think because you are a business owner you are exempt from this not so sneaky little plan because you are not. If you own a business, it might be good to know that QuickBooks is owned by Intuit and for the 80% of small business owners in the world it represents the #1 accounting tool. QuickBooks processes millions of payables and receivables daily so the level of data they are going to derive will be industry transforming.
Imagine this, you work for ABC company and you use Credit Karma, your company happens to use QuickBooks, what is going to stop them for providing a direct feed of your W2 into Credit Karma’s software and with one little click, your tax return can be filed through Turbo Tax? Nothing. In fact, before you transmit don’t think they aren’t going to use their A.I to pre-qualify and subsequently offer you a loan, a payday advance or a Tax Return advance based on your credit profile. It’s going to be a financial cash cow for them and for the KRS-Ones you might as well exit the Bronx and take the entire Boogie Down Productions with you if you catch my overly dramatic drift.
Not to mention, Intuit which owns Turbo Tax already has a partnership with Bank of America through their payroll service. Theoretically, if Intuit has Credit Karma, Turbo Tax, QuickBooks, Mint and a budding partnership with Bank of America it seems like an almost easy… Jackpot!
What’s even more interesting is the fact that almost all Big Banks tend to stick with what they know works, their strategies can sometimes be to attempt to outlast the fade and stick with what’s tried and true. Their bureaucracy and overhead set them up to be naturally risk-averse. Does the question now become how are Big Banks (KRS One) going to respond to Jay Z (Intuit & Credit Karma) coming onto the scene? Will they let the public forget they are the original Blueprint, and can they be nimble enough to respond quickly to the rapidly changing market and consumer demand? I guess the answer to these questions remains to be determined but one can only hope that somewhere on State Street more than just the Anti-Trust alarms are sounding.
--Amirah