After the Great Recession began in 2008, more and more people began to tighten their budgets. However, revenue for personal finance software has actually decreased 0.1 percent annually in the past five years as customers have turned to free SaaS (News - Alert) programs like Mint.com.

Companies that offer online budgeting tools make money through lead generation fees. These fees are typically lower than subscription fees or software purchases. Additionally, as IBISWorld industry analyst Dale Schmidt points out, the economic recovery has generally favored higher-income households. These households are more likely to hire a financial advisor than to use personal finance software.

One winner during the financial crisis has been the personal finance software development industry. Developers have benefited as commercial banks have licensed personal finance software to integrate into their online banking platforms. Additionally, demand for more personal finance apps on smartphones and tablets has provided more work for developers during economic hard times.

Companies like Intuit (News - Alert), which started by offering out-of-the-box personal finance management software, are starting to recognize the value of SaaS. In 2009, Intuit acquired Mint.com, a free online budgeting tool that makes revenue from advertisements for credit cards, banks and insurance companies.

Intuit benefits from providing customers with two approaches to managing their money. Quicken software, which has been around for about 30 years, stores data on personal computers for those who are worried about security. On the other hand, accessing Quicken data from multiple devices is impossible because personal finance data is not stored online.

Mint.com, on the other hand, has applications for iPhone (News - Alert) and iPad and currently boasts about seven million users.“Changing people's habits is hard,” Intuit co-founder Scott Cook told CNN. “Mint is for the person who doesn't want to think. They don't want to track or check anything.”

According to IBISWorld, which is launching a new report on the Personal Finance and Money Management Software Developers industry, Intuit and competitor Yodlee, Inc., are expected to snap up their smaller competitors over the next few years, producing a consolidation in the industry. Intuit and Yodlee control most of the world’s commercial bank licensing business, which provides them with a secure and growing revenue source to ensure their continued dominance.

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