Comments on: Real Innovation | integration of online banking and Wesabe API

By: Colin

Colin — Tue, 16 Dec 2008 23:36:00 +0000

@Matt – thats it. Thats why bank disintermediation will happen.

By: Matt Williamson

Matt Williamson — Mon, 15 Dec 2008 19:40:36 +0000

Colin, I think you are dead on with this one. As soon as the banks realize that the college crowd sees banking data much like they view all data, as something they own and want to see when and where they choose, then the banks will be closer to the goal of maintaining customers.

Otherwise we will see a smart tech-related startup bank leach those customers away… Think MySpace Bank, think First Bank of Facebook, or (shudder) GoogleBank – GBank.

By: Colin

Colin — Mon, 15 Dec 2008 01:48:29 +0000

Exactly Gene. We will never see true innovation otherwise.

By: Gene

Gene — Sun, 14 Dec 2008 20:10:27 +0000

Excellent post Colin. This is a key process that needs to be discussed and accepted by those in the banking world. The problem is the domain of the IT personnel and others who have a vested interests in NOT allowing this functionality. I can just hear the howls of excuses as to why it shouldn’t be done instead of simply Why not?

By: Colin

Colin — Sat, 13 Dec 2008 08:25:38 +0000

@Guillaume – the other security hurdle banks perceive is the access to their systems by third parties.

By: Guillaume

Guillaume — Fri, 12 Dec 2008 20:29:59 +0000

I completely agree that Banking Web APIs are strategic tools for smartsourcing innovation. Software companies do it, why not banks who are really IT shops in disguise. In one of my earlier blog posts ([1]), I wrote:

“banks next best bet might be to do what Apple or Facebook do: expose some of this information via easy-to-use APIs in a way that is more secure than their startup competitors. Then, allocate a VC fund to fund startups using this API (which is equivalent to buy an option to invest more/buy out the most promising ventures later).”

The security hurdle I mention that needs to be resolved is how a bank authorizes a 3rd party to access a customer’s data. This is currently done by providing the username/password, but this process could be much more secure if OAuth support was added to the banks’ existing OFX server (see [2]).

[1] http://lebleu.org/blog/2008/05/19/the-problem-with-banking-innovation-and-how-to-fix-it/
[2] http://lebleu.org/blog/2008/05/13/mintcom-a-perfect-banking-use-case-for-oauth/