Who is going to launch the first bank/brokerage account that acts as "a platform" - built for integration with a third-party ecosystem of applications?
Taking the Facebook or iPhone model to banking needs to be done. There are regulatory hurdles to be cleared, but they are surmountable: Paypal, for instance, does not have a banking charter and performs almost all core banking activities.
In this model, the bank owns your "profile," which sits with your deposit account. Apps use this profile to deliver services that are interesting and valuable to you - and compete for your business openly on the platform. Data gets shared two ways, always with explicit authorization of the user.
Instead of billpay, you have a network of friends and vendors who you can easily transfer funds to.
Traditional financial services will not be able to pull this off because of their reliance on cross-sell (ie customer captivity.) And that leaves plenty of room for a new kind of financial services provider - one that is open, transparent, integrated and maniacally focused on delivering a great experience to its customers.
brilliant post steve. here are my thoughts:
http://csertoglu.typepad.com/sortipreneur/2010/03/the-open-finance-platform.html
Posted by: csertoglu | 03/04/2010 at 08:12 AM
Brilliant - I am looking for something like this for mortgages to use on my startup. The captivity problem is prevalent there whether you go direct or use a broker because you get "locked" after appriasal and have to go by their word its the best rate going.
Posted by: Michael McGrath | 03/04/2010 at 09:12 AM
@Cem- thanks for expanding on this and putting it in its proper context .. it would be fun to explore further..
@Mike -sounds like you are working on an interesting effort, would love to learn more. You refer to regulatory hurdles in your comment on Cem's blog - what are the largest ones in your view?
Posted by: Steve Richmond | 03/04/2010 at 11:19 AM