I realize that I’m a little late in commenting on Wesabe, the money management community (?), which launched this past November, but…
It’s a shame that most banks will ignore this site. A former colleague of mine said “…interesting concept, but I don’t see how they make it into anything real.”
Reading about Wesabe reminded me of a report I wrote in December 2000 when I was at Forrester called “Personalizing Financial Services”, in which I said:
[Financial] firms will create a virtuous cycle of trust with customers through: 1) Preemptive customer service: Fulfilling service needs before customers ask for them; 2) Peer comparisons: Showing how customers how they compare with their peers; and 3) Contextualized advice: Explaining the differences between consumers, and offering advice that leads to a decision.”
Bank marketers that ignore Wesabe are missing the bigger picture. Account aggregation hasn’t taken off because its benefits are skewed toward the firm — not the customer. Yodlee promised firms the ability to target customers with relevant marketing messages. Tell me again how that benefits the customer?
Wesabe’s value proposition rebalances that. While social media proponents talk about the community-building aspects of this new movement, the Cranky in me says that it’s still about me. Letting my voice be heard, validating my opinion. Wesabe holds out the promise to help consumers validate their financial decisions based on what other people like them are doing (sounds a lot like what Amazon’s been doing for nearly 10 years, no?).
What’s sad is that established financial firms already have the data to do what Wesabe plans to do. But they don’t spend their money to build the capabilities to do it, because they don’t see the direct ROI. That’s simply short-sighted.
Here’s my prediction: If Wesabe is successful at signing up (and engaging) a critical mass of customers, it will make more money from selling its data than through subscription fees. WAIT — DON’T CLICK AWAY. I’m not talking about selling personal information about their customers. I’m talking about selling macro-level behavioral data back to the FIs and other firms.
If successful, Wesabe holds out the promise of becoming a virtual market research laboratory on consumer’s financial behavior. Understanding how consumers react to advice, changes in rates, special offers, etc.
Yodlee might have been able to do this, but it’s business model isn’t going in that direction. And neither are too many financial firms.
Technorati tags: Wesabe
I agree with your point that banks benefit most from Yodlee-like aggregation services. But which FIs have been successful targeting offers to aggregation customers based on their account information?
I think today’s traditional FIs would have trouble reacting quickly enough to macro information because they’re organized around products (deposit accounts, HELOCs, etc.) and not customers. Wesabe is a community of consumers, not a community of checking accounts, HELOCs, Variable Universal Life Policies, etc. I think it will take a big shift in how they think about their markets before they’ll be able to capitalize on the type of information generated from communities like Websabe.
Rob, I couldn’t agree with you more that: 1) few (if any) FIs have successfully targeted offers to aggregation customers, and 2) the product orientation diminishes FIs’ ability to capitalize on the information generated from communities like Wesabe.
But many FIs understand the limitation of #2 and are taking steps to try to overcome that. In the intervening years, Wesabe (if successful) can begin to collect the behavioral data that could be valuable to the FIs.
It’s just too bad FIs haven’t been investing in that capability all along. Amazon started 10 years ago. Forrester recommended that FIs do it six years ago.
I subscribe to your comments about learning from the individuals and giving back to the community. The macro-analysis of the aggregated data can be used to improve the service for the community at large, while providing useful information back to the individual.
FIs can indeed do a lot with the data they already have!
At Billeo, we allow users (who are anonymous to the company) to enter their bill payment details, when they use the Billeo bill management service. Users are then given the community median spend with a particular monthly bill (e.g. PG&E, Verizon, etc.). This allows the individual to do a quick check to see if one is spending more or less than the community median.
RE: “If successful, Wesabe holds out the promise of becoming a virtual market research laboratory on consumer’s financial behavior. Understanding how consumers react to advice, changes in rates, special offers, etc.”
Ron … I agree that the value of Wesabe is high, but perhaps even higher than you suggest. I happen to remember your 2000 paper. There was also the concept of Open Finance introduced by Forrester in those early days. Together these are powerful concepts that were ahead of their time, and and are now ust beginning to come true.
The Wesabe model is a platform that works with many alternatives, but it is certainly part of the ‘glue’ that pulls the models together.
Best post Ive found on Wesabe so far, tx