Payments Watch

What I want is a financial services mash-up. I want a single online application that combines all of my financial services products, whether from the same or different providers. Consider an on-line banking website where you view transactions and seamlessly transfer money between your savings account, line of credit, your mortgage and credit cards, with access to a consolidated summary of all of your finances - even though all of these products are all provided by different banks and vendors.

Within internet culture, a mash-up is a web application that combines data and features from more than one source. Currently, on-line banking allows you to manage your accounts, pay bills, etc. but access is limited to products and services from the bank offering the on-line service. There are some limited abilities to transfer funds to another financial institution, or to credit products via bill-pay features, but consider the following typical use case:

• Log into credit card company’s web site to view your balance.
• Log into Bank A to determine any mortgage prepayment priviledges.
• Log into Bank B to transfer money from your high yield savings account to your chequing account at Bank C (via ACH).
• Log into Bank C and from your chequing account, pay your credit card and make a mortgage prepayment via bill pay (if you can!)
• Log into Bank C later after the transfer from your savings account at Bank B made it through and continue to do more banking.

On-line banking is great if all of your products are at the same bank. The reality is that consumers may be better served by different products at different banks. Having seamless on-line access to all your financial services from a single web application regardless of the source would be slick. I am quite confident that the technology to make this happen today exists (AJAX et al. on the web front end, ACH et al. on the back end). Other elements could be added to the on-line banking mash-up: social finance could be supported in this proposed web application by adding in Wesabe or other such web services. Payment transactions could be linked to merchant web services (warranty information, promotions, etc.). This is a fantastic idea - I need some venture capital!

Of course, banks may be better poised to cross sell their own products by ensuring the existing on-line banking silos continue to persist. Interestingly, mash-up is also a Jamaican Creole term meaning to destroy. Could such an on-line banking mash-up destroy a bank’s ability to completely own a customer?

On a lighter note, Da’ Baddest Bank Mash-Up!!!: