OpenIdea: Banking 2.0

Posted by Boris Veldhuijzen van Zanten on Jun 15, 2007 in Business, Business Theory, Design, Developing, Innovation, Inspiration, Money, OpenIdea | 4 comments

A few years ago I switched banks with all my accounts because my old bank didn’t offer Electronic or web-based banking. I love being able to do all my finance transactions from the comfort of my browser. But since then I haven’t seen much, or any, improvement in online banking.

A few years ago I had a meeting at a large bank and told them how I thought they could improve their products. I’m sure they are still thinking about it and will keep on thinking about it for a good 10 years.

So here are my thoughts, available for anybody, to copy, steal and use.

Online Banking is very similar to email in 1995. You have an account with money flowing in and money flowing out. Quite similar to one inbox and one outbox as you had in 1995. But what if we would apply modern email functions to Online Banking?

Virtual Accounts

With email it is easy to have different mailboxes for different messages. We could use the same functionality for Bank Accounts. Your top box contains all your money but you can make subboxes with different names such as “Food”, “Car” and “House”. All you money can be virtually divided between these boxes. This would be a cosmetic function which wouldn’t change anything at the bank side. It is simply a way to manage your money. So how do you filter money into the different subaccounts?

Filters

You can set-up rules to make sure your money is filtered into those different subaccounts. You could filter all the money that you receive from clients into the “Clients” subaccount. Imagine having dinner with friends and everybody forgot his wallet except you (happens all the time!). Once you get home you set-up a rule that filters all money with subject “Dinner” to the subaccount “Dinner”. Then you email your friends and tell them to transfer the money with subject “Dinner” to you.

Targets

You could also set-up ‘targets’ for each box. Lets say the dinner cost you 500 and you were there with 5 people so you are waiting for a total of 400 to appear in that temporary subaccount titled “Dinner”. You set-up a target amount of ’400′ and as soon as that target is reached you get a message via email or sms alerting you that your subaccount has reached its target.

You also set-up one of the subaccounts for your next holiday (target: 1500) and a new digital camera (target: 500) and transfer a set amount to these subaccounts every month.

Advantage?

The advantages for the user and the bank are clear: the bank knows how long you will keep your money in your account (12 months until you have that 1500 for the vacation) and you will have a lot more insight in your finances. This is also very easy to build. Because all these features don’t actually move money around the changes are merely cosmetic. You could build the whole thing as a layer on top of your Online Banking interface.

I know there are systems out there that offer similar features. But these systems are software based and built for companies with a lot of clients and transations. What I propose is a simple system for end users and webbased.

Lets hope that some banks will implement this soon.