They never saw it coming.

While the banking industry was worried about LendingClub and OnDeck, a much bigger threat was waiting in the wings. This was not some well-funded start-up bent on destroying the banking industry. It was an established incumbent embarking on a new path – from serving the complex needs ultra-high net worth clients to providing basic loan and deposit accounts for the masses. If you haven’t guessed by now, the threat was, and still is, Goldman Sachs.

I have mentioned them a few times over the last year or more – the launch of Marcus in 2016, making $2 billion in consumer loans in less than 2 years, the acquisition of GE Bank’s online platform and retail deposits, etc. Now Goldman is following another path some online lenders and fintech companies have traveled – offering personal financial management advice through a mobile app/chatbot.

It seems to be a small world. In 2015, Prosper acquired BillGuard, and renamed it Prosper Daily. The idea was to help consumers track their spending and monitor their credit score. Prosper ultimately closed down the operation in the summer of 2017 and transitioned the users over to a different PFM mobile app, Clarity Money.

Now, less than 9 months later, it appears likely that Goldman Sachs will acquire Clarity Money and fold it into the Marcus operations. While the deal has some unique talking points – it was founded by Adam Dell, brother of Michael Dell, and has raised funds from George Soros, Bessemer Venture Partners, and Citi Ventures – I’m still not sure how effective a PFM app can be. We’ve see other attempts meet a similar fate as Prosper Daily, like when Capital One bought Level Money, another PFM/budgeting app, in 2015 and closed it down in around the same time Prosper Daily was shuttered.

So despite Goldman’s success entering the consumer market, I’m not convinced they will have any better luck on the promise of truly changing a consumer’s personal financial management with another digital app.

The problem with most of these PFM apps is that they don’t actually get in your face and make you change. By just reporting where you spent your money last month, week, or hour, they are too focused on information. Reports of your budget, or even pro-active “advice” like, “You should move $5 to your saving account today,” don’t address the root issue. Consumers generally know whether or not they are doing well, so just adding more charts and data doesn’t help.

For those who want to improve their financial lives, they need something stronger to get them to change their habits. It is easy to create a spending plan – it is much harder to stick to the plan. Consumers need a solution that forces them to take control of their money before it is spent.

Next week I’ll cover a startup doing just that.