The Quicken cloud

Faced with a deadline to upgrade my old version of Quicken 2006 - the ability to download bank transactions would be halted after April 30, I briefly considered Intuit's Quicken Online option - and discarded it.

Don't get me wrong, I love the cloud. I use Google Docs, Yahoo Mail and a host of other online services. But I won't put 15 years of personal financial data on Quicken Online or any other online service -- ever. 

Sure, I wouldn't have to worry about backups if I trusted the cloud with my data (I'm not sure I do), but I also have to think about privacy: My Quicken data contains every item I've purchased and every investment I've made during that time.  The damage that would be caused from a data breach or loss  would be so potentially damaging to me personally that the risk of compromise -- however small -- just isn't worth it.

Quicken Online is also not suitable for me because it is a more limited product than Quicken Deluxe. "It’s not for a heavy financial tracker. It’s for the person living paycheck to paycheck who’s trying to figure out their cash flow situation," a spokesperson says.

As to security, the online version contains no personally identifiable information, Intuit claims. For example, it uses only the last four digits of your account numbers, and while it aggregates information from your bank accounts, Quicken online is read only - you can download or log transactions you've made but you can't initiate banking transactions from there.

In the Cloud We Trust? 

If online is the future of personal finance software, Intuit has a tough road ahead to gain and keep users' confidence -- and it acknowledges the risks it faces in its 10K annual report. With Quicken Online and its other online offerings, Intuit is dependent on the continuous availability of its IT operations.

"Any damage to or failure of our systems could result in interruptions in our service, which could reduce our revenues and profits, cause us to lose customers and damage our brand." (see page 15, Intuit's 2008 annual report).

Getting that IT infrastructure up to snuff is a challenge that Intuit is apparently still working on.

"Although we have implemented practices designed to maintain the availability of our online products and services and mitigate the harm of any unplanned interruptions, we do not have complete redundancy for all of our systems, and our disaster recovery planning cannot account for all eventualities."

It goes on to state that "...we occasionally experience unplanned outages or technical difficulties." I wonder how many Quicken Online users have read that?

To its credit, Intuit is investing heavily to beef up its infrastructure with a new data center that is supposed to come online in the second half of this year. Intuit knows what's at stake here:

"If we do not execute this transition to the new data center in an effective manner, we could experience unplanned service disruptions or unforeseen increases in cost which could harm our operating results and our business. We do not maintain real-time back-up of all our data, and in the event of significant system disruption, particularly during peak tax filing season, we could experience loss of data or processing capabilities, which could cause us to lose customers and could materially harm our reputation and our operating results."

If I were to consider using Quicken Online - and I am not - I'd certainly wait until that new infrastructure is online and stable. But I have other issues with putting my personal financial data online as well.

For one, your financial data isn't legally protected online in the same way that it is when stored in your home.

Privacy Risks

Intuit says my concerns about privacy and security are overblown. " It’s just a risk statement," a spokesperson says of the 10K report, adding that it uses the same encryption technology  banks use. And while he acknowledges that Quicken Online data is not covered by the same regulatory protections as is the same data stored at your bank, he says Quicken has "a very strong privacy statement." 

Another concern: Intuit can be served a subpoena or court order for that data and legally it does not have to notify me (although I'm sure Intuit would do so). Likewise, the government can demand access to my data for an investigation and prohibit Intuit from telling me that it has collected that data. But if it's in my home I'll know who's demanding it and they'll need to show me a search warrant or court order to obtain it.

So I'm not going with Quicken Online. Continuing with an unsupported version of Quicken that no longer has the ability to download financial institution data a nonstarter. Do I upgrade - or not?

Next time I'll tell you about my decision - and how I made the wrong choice.

Quicken: The Saga

• Part I: The Quicken ultimatum
• Part II: The Quicken monopoly
• Part III: The Quicken cloud
• Part IV: The Quicken decision
• Quicken's double cross (Feb 2008)