The Bankwatch

Tracking the consumer evolution of financial services

Social Investing – stockpickr.com

Continuing with the theme of social financial services, here is a new one, picked up from tehcmeme tonight. 

Its a unique approach to investing sites, and is more akin to wesabe (personal finances social site), than any other investing site. 

Stockpickr lets you input your portfolio, then points out others who have similar portfolios, and the degree of similarity.

But that’s where it stops …  after reading the early promise from the usual press release the result is disappointing:

  • the forum is quite disjointed from the portfolio’s – the forum is just that – another forum
  • functionality- there is an enormous amount of things you can click on, and its overwhelming to learn, considering that those who use investing sites, are pretty sophisticated, and know the route(s) they want to take
  • on the positive side, the underlying algorithms and the forum stuff have very positive content
  • of course one of the tabs is a blog

Overall, a great idea, desperately in need of a usability expert and some better layout, and simplification.  But its more than that, and I empathise with the designers.  Its really hard to develop a social aspect, and have that translate into value .. value as defined by the sites users.

How social ‘stuff’ and financial can be combined, is not easy.  Certainly it cannot just be plugged in to a standard web site. 

I remain convinced the point is that the key shift in financial services lies with substituting expensive branch networks with social networks.  To understand that requires the realization that the branch network was integral with financial services in the old world.  If you remove that branch network that must be replaced with something of exponentially more value.  We have a head start there because consumers are telling us they do not trust large corps.  Social networks must be integral in the new world.  This means process linkages that predicate the online financial service provided on the social network.  The social aspect has to have reputation, credibility, and expertise.  This will deliver value.

eBay and Amazon have mastered this, albeit in a much less valuable transaction.  The eBay social standing, or the Amazon referrals are integral to the transaction.  Online financial services need a comparable degree of integration that still has to fully developed and understood.

Having said all that, I wish the team at Stockpickr well.  They have taken on a large challenge here, and certainly if I was ETrade, I would be watching very carefully.

 

Written by Colin Henderson

January 4, 2007 at 21:31

5 Responses

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  1. Now that is an interesting proposition: replace branch networks with social networks. It is certainly a bold idea. I think the key point that you make is that the social network – with increasing value the more members it has – could, in fact, be more valuable than a branch to a customer. And we already know that branchless banks can work in many cases.

    Key would be to define what the value of the social network would be for a bank customer, in conjunction with a single bank. Most other examples of social networks in financial services I’ve seen are provider-agnostic.

    Furthermore, if a customer *doesn’t* see value in a social network that limits itself to a single provider, but social networks in general become more valuable than branch networks, then the implication is that banks will lose control of a key path to the customer…

    An interesting conundrum, and one which might be resolved by your concept of Open Source Banking.

    James Gardner

    January 5, 2007 at 02:25

  2. Re “provider agnostic”
    that concept of brokered services; selling the products of others would be a natural fit for the social environment. That could be the breakthrough required for Open Finance to take hold in traditional financial services.

    Colin

    January 6, 2007 at 09:05

  3. On http://www.fundsupermart.com, I believe we have in Asia Pacific a good case of community portfolio rating. It seems that stockpickr.com is more automated and software-intelligence driven when it comes to matching peer investors. When the right matches are found I guess that, like with fundsupermart.com, portfolio peer rating will be a lively activity.

    david garceran nieuwenburg

    January 6, 2007 at 12:44

  4. […] 2007 · No Comments Thanks David for pointing out this fundsupermart following up on the stockpickr post.  Fundsupermart is more peer based in its evaluations, versus the algorithm method at […]

  5. I think the Motley Fool CAPS web site does a better job of realizing the promise of social stock picking:

    http://caps.fool.com

    You can track professional investors (e.g. type Jim Cramer into the Player Search box) as well as the best minds of the community. More interestingly, the Fool generates stock ratings based on a weighted averaging of community sentiment.

    Laurie Young

    January 15, 2007 at 14:57


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