The Bankwatch

Tracking the consumer evolution of financial services

Open Source Banking – why Wesabe is the best example of the new breed

Wesabe continue to build on their strength, with two feature additions.  This follows the addition of Kathy Sierra to their advisory board.  I think she might have some advice on explaining the multiple tag thing 🙂

But I want to lay out a view on Wesabe and how they might fit in the larger picture, because they are breaking new ground.

  1. When you create a tip, you can say what area that tip applies to, by adding the postal code for it. I use this to give tips about the auto shop I use, the grocery store that I think is a great local deal, and the doctor who keeps me from safe from abject hypochondria
  2. Tag splits are one of those features that not many people know about yet — we knew they were on the more complex end of things, so we added them without making too much noise about it just yet. You can divide one transaction into multiple tags like this:

    Whole Foods                          $100.00
    Tags: groceries:80 food:80 cashback:20 berkeley

The work Wesabe are doing in my mind, is a crystallization one key element in the establishment of Open Source Banking, a term coined here and brought to my attention by Nishad

My simple description for Open Source Banking is the availability of banking services without Banks.  To make this real requires the deconstruction of the elements of banking, and their re-building again in a social network/ cluetrain context (obvious force).  But the core is that the rebuilt elements will eventually be driven by customers (underlying force).  But at the same time Banks won’t sit still, so there will be an ongoing dynamic tension represented by the double arrow in the middle. 

This picture needs work, but its my attempt to graphically display the thoughts that have been coalescing with me.  Again there is the obvious force of Banks taking traditional service and placing those online.  That is represented at the top by the yellow boxes.

But there is an underlying force at play driven by internet use, internet tenure, and demographic shifts that drives a desire to see and interact in new ways.  This is driving a new genre of online services depicted in the green section.  This is the natural networking force that is well represented and defined better than me, in the Cluetrain Manifesto

Wesabe is in the green section.

Banks have taken notice of the the green section with some toes dipped in the water.  The difference in Open Source Banking and why I don’t give Banks’ much credit yet, is the Web 2,0/ social element.  Call it what you will, but its the element that replaces lost trust in institutions, and growth in trust of peers, as defined in Cluetrain.

The best examples held up of the green section are Zopa, Prosper, CircleLending etc.  Those services are part of the equation, but are missing elements that old Banks still have such as service, advice, education, discussion – the elements that are characterised by human interaction.  Wesabe is different to me, in that it is re-defining financial advice, and references in a banking context.


Written by Colin Henderson

December 2, 2006 at 16:20

3 Responses

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  1. Hi,

    I’m one of the founders of Wesabe. I very much appreciate your comments and enthusiasm about the site. It’s great to see that people are picking up on the larger ideas behind the site, and not just thinking of it as “Quicken on the Web.” Thanks!

    One of the ways we talk about the site is as a “reverse FICO score.” FICO scores, or credit ratings, are designed to evaluate individual consumers as a credit risk; our site is beginning to aggregate information about the *value* risk consumers are taking when giving their money to a merchant. That’s the type of application which tends to do well on the Internet.

    Thanks again, and please let us know if you have any ways we could improve the site for you.


    Marc Hedlund

    December 2, 2006 at 20:27

  2. Thanks Marc, and just keep up the good work.


    December 2, 2006 at 20:29

  3. Thanks! And, yes, you’re right, Kathy had a ton of suggestions for explaining tags a lot better. 🙂

    Marc Hedlund

    December 2, 2006 at 20:49

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