I got an invite to the Balancion personal finance application beta a week ago, and have played with it somewhat since. I've tried a few similar tools before, ranging from the finance packages of the banks I've been a customer of, to a few desktop applications. Until now, I haven't been sufficiently impressed by them to continue using any for any significant period, but I think Balancion might be one to stick around for a while.

Balancion solves the two issues my previous experiments have failed at: first, it covers the entirety of my personal accounts (or very close thereof), because it isn't limited to just the services offered by one bank (the failing of Nordea's, Sampo's and OP's packages, at least the last time I tried them), and second, it doesn't force me to spend my evenings manually typing in boring details, thanks to its tools for downloading the data from the banks and other institutions. Of course, that's just table stakes for the game, really, but my previous experiences have shown even that much is not a given in a market the size of Finland. I would imagine larger market areas have had more focus on this type of stuff - American banks seem to advertise compatibility with Quicken or MS Money - or now with Mint, the hottest entry in the area. German banks apparently have a standard for transaction data exchange. None of that has been available to individuals in Finland.

What currently lifts Balancion above the table-stakes minimum is how it deals with "uncategorized" expenses. Other tools allow searching for similar historic transactions and categorizing all of them at once. Balancion applies that to the future as well, and learns to recognise more and more stuff as you go. Setting the books up for the first time does require a few hours of clicking around, but it gets less and less manual as time goes. That's what makes it a joy to use (as much as any financial application can be a joy, that is!)

At this point in the beta, it's a bit limited; just tracking income and expenses, plus a few (quite useful and informative) visualizations of the same, which already can be helpful in recognizing big expense areas and saving money. However, I'm looking forward to seeing more of the budgeting, expense management and investing tools in the service. It's pretty clear how this can develop and where the opportunities for the business lie. The crucial question is, how can Balancion add partnerships and cross-sell features while retaining the trust of the users. Thus far, their communication indicates they understand how important this will be to their success.

I'm not terribly happy about the way Balancion authenticates me, though. The email/password login is standard, though I'd prefer to use OpenID to avoid managing one more password. What really bugs me are the mandatory "security questions", which they require to be able to change the password. Such questions, especially since they were limited to two out of half a dozen pre-selected questions only reduce security (seriously, it does not take much investigating to figure out the maiden name of my mother). If this is what their security advisor Nixu truly has recommended to the team, I'm disappointed in Nixu as well. Anyway, I answered the questions with something random - so now I can't change my password at all. This probably was not what they intended.

For anyone interested in this category of services, I would recommend checking out the venture capital pitch presentation of Mint.com, the US equivalent of Balancion. If you want to try out Balancion yourself, ask me for an invite here in the blog comments or by tweeting @osma.