Imagining Innovation – What Banks Can Expect Beyond 2014

(Re-Post From My Two Part Interview With BankNxt – Part 2)


Stories from the Vault: Real Insight from Real Bankers

In this year’s final installment of the BANKNXT exclusive series on innovation in banking, acclaimed financial technologist Bradley Leimer shares his thoughts on what the next wave of technology holds in store for banks in and beyond 2014.

This is the second installment of this interview.

Bradley Leimer

Bradley Leimer, financial services industry technologist, consultant, and commentator, leads digital strategy for Northern California-based Mechanics Bank. His focus is on developing and integrating technology applications and partnerships geared toward improving the client experience and profitability of digital channels. He brings additional perspective from leading marketing and technology efforts within the bank and credit union industry and from a decade driving database marketing and analytic programs for more than 6,500 national, regional, and community bank clients. Bradley is a sought after adviser for startups entering the financial and payments space

“How you view the current environment likely correlates to your sense of urgency and overall disruption in the banking industry. While we may not all agree on the impact, the shift to digital will certainly have consequences. We’re moving toward an era of engagement banking – a marketing, sales and service model that deploys technology to achieve customer intimacy at scale.”

You’re recognized as a leading financial technologist – what are some of your over-arching goals in leveraging technology within financial services?

While people may associate me with fintech, I certainly tweet enough about it, I think I might be more of a social scientist or macro-economist at heart. I’ve always been very curious about consumer behavior and why people act the way they do. Especially why they buy what they buy, how they pay for goods and services, how the movement of goods reflect societal value, and what society gets in return for those exchanges. While there are certainly differences in delivery and scale across social and economic spectrums and geography, there are basic human needs that financial applications help fulfill. Whether that need is fulfilled by an existing bank today, or will be in the future is another story.

We shouldn’t be selling products and services; we’re facilitating daily human needs and enabling people’s dreams. My ultimate goal is to be part of making these functions more inclusive, to really improve the banking system as whole. I think the way we leverage technology in the future will have a lot to do with helping our industry move forward. I also think it’s critical that technologists, and everyone in banking really, strive to be perpetually curious and always working to understand how we can improve the lives of the people and businesses in our communities, to see the bigger picture of where dots are connecting a ways off into the distance. It’s a critical time for banks to review their place in society and in their communities, not just here in the U.S., but worldwide. The traditional banking model certainly has some cracks in it.

Is the difficulty banks have in embracing change one of their biggest obstacles in terms of innovating?

I think it’s about more than just embracing change. Our industry is overly fixated on regulation and risk. We’re too afraid to experiment. And at this point of history in financial services, FIs under twenty to fifty billion in assets don’t have the scale to screw around and not take additional risks to stand out. We start with ‘no’ as our default answer far too often. This mindset leads to a legacy of friction that disruptors are starting to exploit. Our model simply must adapt to changes more quickly. We must keep up with the simplicity, usability and transparency customers now demand. The disruptors see that the future of financial services will be won by removing traditional barriers and rapidly embracing the shift in consumer and business behavior. Things are moving incredibly fast.

Do you think that the digital channels could help community banks recreate that traditional ‘one-to-one relationship’ feeling that was previously the domain of small town bricks-and-mortar banks?

I think it’s incredibly valuable to have smaller, community based financial institutions as a natural economic hedge to promote financial inclusion and drive more equitable financial relationships with local businesses and consumers. I wrote a piece about this question earlier this year as part of American Banker’s Future Model of Banking series called “There Will Be Blood: The Era of Engagement Banking”. In this piece, I tried to make it perfectly clear: The rise of personalized digital financial and payment experiences are the likely death knell for community banking institutions. The next five to ten years is absolutely critical if you are a financial institution with under twenty to fifty billion in assets.

Decades ago financial relationships were much simpler. You put money in a local bank or credit union and you accessed your accounts in person or wrote checks. When credit and debit came along, you had cards linked to these accounts at that local bank and accessed cash through ATMs. We pushed people out of the branch and ‘Oops’, now they aren’t coming back (and branches aren’t convenient anyway, so why should they?). Now your financial life is much broader, your financial relationships have wider scope and are likely at seven or more institutions. With the rise of the app ecosystem, your financials decisions are becoming much more integrated with other decisions you make throughout the day. Decisions that are more likely driven by a national bank, credit card, or third party financial experience than anything else. While every industry is impacted by the rise of highly personalized digital experiences, it’s very hard for smaller banks to keep up without scale and agile development. Ask Blockbuster how they fared as Netflix and digital flipped the equation. The same will go for banking.

While there are an increasing number of digital opportunities to leverage financial decisions before, during, and after payment, which is becoming the crux of what many disruptors in financial services are targeting (the form and frequency of payment and the associated revenue of those decisions), there’s thankfully more to banking revenue than choosing a particular payment rail. In an industry where the top 150 banks control 81% of deposit relationships and 75% of lending relationships, scale is obviously critical. But there’s great revenue opportunity in niches if your technology can deliver, so even though I come across as pessimistic, I’m actually hopeful.

What should fintech companies be doing or focusing on to help banks achieve a more personalized banking model?

I’d love to blame legacy technology partners for every problem we’re facing, but I can’t. Consumers have changed, technology has changed, and financial experiences have changed. We’re the ones that haven’t changed enough in response. The conservative nature of financial institutions’ is stopping them from embracing real innovation. But still, technology is a critical factor, and the smaller the FI, the more reliant they are on external technology partners bringing new innovations to the table. From core banking to digital service delivery, especially as API driven strategies multiply, we’re seeing entirely new business models emerge for building financial applications and legacy fintech players, just like their banking clients, are having a hard time keeping up. What used to take a year of development can now take months; what took months now can take weeks. Application development is becoming cheaper and faster. The fintech partners we choose to do business with need to be more agile and able to differentiate solutions from big bank services. They need to help the FIs drive more digital revenue to create opportunities to better compete.

How do you compete with Chase, or Wells Fargo, or Bank of America? We need to stop the process of just copying their technology and offer differentiation of value through innovative products and services. This sometimes starts with some navel gazing; clearly defining the type of financial services firm you are trying to be and who you are trying to serve. That done, you can begin to focus on serving customer needs by choosing the right technology and service partners, or continue to build out your own teams, in order to be more responsive to the market and your customer. It’s not rocket science, but we often get this step wrong.

You’re an advocate for incorporating social media and networks into banking, would you say that ‘social’ or ‘mobile’ has been the biggest disruptor to date?

It’s the proverbial chicken and the egg question in a digital context. Both social and mobile have fundamentally changed how we communicate and interact with our customers forever. Social and mobile financial applications have combined to form this perfect storm that is fundamentally shifting the financial relationship back to the consumer and in many ways away from banks themselves.

Banks really missed the initial opportunity in social, which was to drive more personal service relationships with their customers across the channel of their choice, along with the transparency and intimacy that goes along with that. Remember, social isn’t just about networks, it’s about something much bigger than that; the change of expectation that has arisen because of social activity. The industry is coming around to
these larger changes and embracing more socialized, personalized services and customer interactions. There are many great examples, from USAA to Fidor to Simple, where social is a primary component of a scalable business model… unless you’re HSBC and don’t know who Brett King is, and you missed the post about closing his account in the Huffington Post. The key is using social to help people understand their own financial picture, let their data tell a personal story. Help them in context when they need you, and work toward developing a deeper customer relationship through both digital and personal means. It can be done and it is being done today.

Mobile is a bit different, I think we’re a bit more evolved there, but I shudder to think that most bank customers think mobile deposit is our most innovative service. We need to get much better at designing more engaging financial experiences through our mobile applications before someone else does, namely payment providers with deep retail partnerships. As it is, less than half of financial institutions have a mobile banking app. Long term, I see the continued rise of financial applications dominated by non-bank providers – maybe permanently. You can see what type of social and mobile technology inspires me a bit here.

The other question around these two topics that I’m interested in is if the rising expectation of immediacy and intimacy will ever really butt heads with demands for security and privacy. Consumers seem destined to share more and more personal information, but is that starting to shift with the rise of temporary messaging and images like SnapChat? With all the NSA news around data snooping, and a perpetual stream of compromised financial data, are consumers going to put the genie that is social and mobile back in the bottle and choose privacy and transparency? I’m not sure they will, and I think there are many opportunities for banks to lead in these areas.

What is your vision for the future of banking, taking into account the rapid advancements we’ve seen in just the last few years?

Technology is simply accelerating an existing shift in traditional relationships with our customers and this is having an impact on the banking industry’s historical sources of revenue. While we may not all agree on the impact, the shift to digital will certainly have consequences. The banking model is moving towards a truly contextual, customer-centric view. Shifts in consumer behavior demand less intrusive authentication, social connectivity and crowd sourcing, hyper-personalization of everything from offers to usability, as well as tailored assistance and support at critical moments. We are now face-to-face with an engaged customer base that expects a completely frictionless experience. As we move further into the realm of digital experiences, the next decade will be even more incredibly disruptive than what we saw in the recent economic downturn. As I’ve said before: There will be blood.

Delivering contextually aware financial services in beautifully crafted experiences is becoming a necessity to maintain relevance with digital natives. Over the next decade we’ll see: an incredible focus on customizing financial data and personalizing interfaces for varied consumer segments; a focus on simplified authentication using multiple forms of bio-metrics and contextual assessments, from proximity to login patterns; attention shifting to real-time money movement at low or no-cost; further integration of social media into both marketing and banking applications; leveraging and connecting offline and online behavior to disrupt the payment and procurement paradigm to serve up personalized insights – just think of how we could use SKU level data; offering service alternatives through proximity awareness such as actionable notifications that prompt users through their mobile device to move money or pay bills to avoid fees or to better manage their current account spending, continuous assessments of financial wellness that prompt the consumer to take a specific action after a transaction, as well as delivering daily or on-demand personalized information around the customer’s financial health and aggregated account status. I could go on, the possibilities are practically endless.

The reality is that banking is no longer something customers just do. It’s becoming an experience they will completely control. We are moving away from a banking relationship defined by the goal of being a customer’s primary financial institution to one where we focus on becoming their primary financial application. It’s no longer about wallet share. It’s about app-driven mindshare – being ready for the moment our customers reach into their pockets for their mobile device, or their glasses, or other form of wearable technology, and start thinking about their financial relationship choices – before, during and after a financial moment of truth.

The question really is, how is your bank or credit union going to survive the next decade?

Prue Duggan is a writer for BANKNXT, a contributor to several other FinTech and innovation related websites, and community manager at leading Bank 2.0 software company, Backbase. With a background in advertising, branding and content strategy, Prue is a passionate observer of how the web is changing the way consumers and brands interact online and the evolving science of UX design. She has worked as a copywriter for large retail brands, from Nike to Tommy Hilfiger and first became interested in the nexus between communication and technology while working at

There Will Be Blood: The Era of Engagement Banking

This piece originally posted as part of American Banker’s BankThink two week series on the Future Model of Banking. Join the series contributors in discussing the types of products and services tomorrow’s banks might offer in this Thursday’s Tweet Chat.

“What is the future model of banking? What products and services will tomorrow’s banks offer that truly add value and that customers will be willing, even happy, to pay for? How will banks deliver/market these services? Think big and broad – five years out at least.” 

American Banker Series Introduction
Senior Editor Marc Hochstein

Here was my response to the question: What is the future model of banking.

Customer behavior is changing. Expectations are shifting. Technology is accelerating this shift as it alters traditional relationships with our customers as well as the banking industry’s historical sources of revenue, growth, retention, and customer loyalty.

What is the future of the financial services model? To answer this question, we must also ask: What can we learn from changes in the design of consumer financial applications and in customer behavior? What is the role of financial data and identity in this exchange, and how do we make the concept of big data become a personalized, more meaningful small data experience? In the disruptive shift to digital, are there particular pieces of the model worth salvaging to avoid the fate of so many industries before it?

How you view the current environment likely correlates to your sense of urgency and overall disruption in the banking industry. The recent downturn is (mostly) behind us, the economy has a light breeze at its back, and banks have seen the return of record profits. But in the U.S. market alone, the largest 100 banks (the top 1.5%) hold over 80% of deposit and 75% percent of lending relationships, according to FDIC data. The industry feels uneven, the business model itself for the vast majority of players a bit muddled. David Kerstein of Peak Performance Group projects that by the end of this decade there will be 40% fewer banks and 50% fewer credit unions.

While we may not all agree on the impact, the shift to digital will certainly have consequences. The banking model is moving toward a truly contextual, customer-centric view. We’re competing against players that better leverage proximity, preference, and the proliferation of engaging experiences. From American Express to USAA, from Backbase to Zopa, shifts in consumer behavior demand less intrusive authentication, social connectivity and crowdsourcing, hyper-personalization of everything from offers to usability, as well as tailored assistance and support at critical moments. We are now face to face with an engaged customer base that expects a completely frictionless experience.

The banking industry has traditionally thrived on these areas of friction. It is, of course, where we make much of our profit. Historical friction complicates our customer journeys. New fees and constraints on evolving forms of money movement and management, elongated processes to validate and verify identity and account ownership, non-contextual evaluation of risk to extend credit — these are all cumbersome user experiences that fail to leverage data and associated knowledge in our systems. Friction in the financial system comes from the industry’s strong aversion to risk and attachment to historical centers of profit, its less-than-innovative reaction to regulation, as well as organizational structures focused around inflexible systems and processes.

Our model simply must change to reduce this embedded friction, whether it is in the form of fees or complicated processes. We must keep up with the simplicity, usability, and transparency customers now demand.

The disruptors see that the future of financial services will be won by removing traditional barriers and rapidly embracing the shift in consumer and business behavior. It’s clear that we are moving toward an era of engagement banking – a marketing, sales and service model that deploys technology to achieve customer intimacy at scale.

As we move into this new era, the idea of profiting from glaring areas of friction disappears. The crux of the disruption argument is that banks are being disintermediated. But I think in many ways the industry, at least certain players, are responding, and in many ways reverse engineering the attacks to its foundation. Larger banks and payment players see this shift and are focused on designing digital financial experiences to match nimble technology entrants that are poised to nibble at the industry’s income streams. Some are taking larger chunks, like PayPal and Square, and many more are poised to be equally disruptive (GoBank, Braintree and its Venmo unit). In this new era of applications and partnerships driven by application programming interfaces, you can practically build a complete banking experience on the rails of Twilio, Stripe, and IFTTT (“If This, Then That”). The financial services revolution may not be televised, but it will certainly be driven by APIs. I digress.

As much of traditional banking services become a utility, those that leverage personalized banking experiences for their profitable customer niche segments will thrive. As we move further into digital experience, the next decade will be even more incredibly disruptive than what we saw in the recent economic downturn.

There will be blood.

Delivering contextually aware financial services in beautifully crafted interfaces and experiences is becoming a necessity to maintain relevance with the digital natives. Over the next decade, we’ll see an incredible focus on:

  • Customizing financial data and personalizing interfaces for varied consumer segments (similar to what we see from MoneyDesktop, iQuantifi, and Backbase)
  • A renewed focus on simplified authentication (using multiple forms of biometrics and contextual assessments, from proximity to login patterns, like from BehavioSec, as well as voice driven vetting like that from Nuance Communications),
  • Real time money movement at low or no-cost (as interchange goes to zero and person-to-person and account-to-account transfers go real time and as alternative networks like Dwolla expand),
  • Further social media integration (American Express, CommBank’s Kaching, FNB and ICICI’s Facebook Banking), as well as crowdsourced lending (Zopa, Lending Club, SoMoLend) and JOBS Act-related funding (LearnVest)
  • Leveraging and connecting offline and online behavior to disrupt the payment and procurement paradigm to serve up personalized insights through the use of Stock Keeping Unit transaction data through companies like Nerture,
  • Offering service alternatives through proximity awareness (American Express or Banno’s contextual offers, delivering you specific suggestions for everything from coffee to televisions),
  • Actionable notifications that prompt users through their mobile device to move money or pay bills to avoid fees or to better manage their current account spending (from Monitise to Personetics),
  • Continuous assessments of financial wellness that prompt the consumer to take a specific action after a transaction, like filing a taxi receipt as a business expense or setting aside part of a deposited check as savings (similar to personalized spending and savings goals at Moven and Simple);
  • Delivering daily or on-demand personalized information around the customer’s financial health and aggregated account status (Yseop, Narrative Science). This can range from news affecting an investment portfolio prompting changes in holdings to leveraging storytelling to assist in cross selling financial services.

Banking is no longer something customers do.
It’s an experience they completely control.

So where does that leave us, the bankers?

We are moving away from a banking relationship defined by the goal of being a customer’s primary financial institution to one where we focus on becoming their primary financial application. It’s no longer about wallet share. It’s about app-driven mindshare – as our customers reach into their pockets for their mobile device or use their glasses or other form of wearable technology and think about their financial relationship choices – before, during, and after a financial moment of truth.

So, what’s in your app?

This post was originally part of American Banker’s BankThink Future Model of Banking Series. My post appeared on July 23, 2013 and can be seen here. I encourage you to view (and share) all of the series posts here.

Bradley Leimer leads digital strategy for the Mechanics Bank in Richmond, Calif. He brings additional perspective from prior work leading marketing and business development teams in the credit union industry and through a decade driving big data and database marketing analytic services for national and regional bank clients.

Best of Show Locked Up? @MoneyDesktop Demo At #Finovate

Finovate: Disneyland of Fintech™

I was watching the live feed of the Apple iPhone 5 announcement this morning (no NFC news, unfortunately), but I could tell I was really missing something in New York by how much the #Finovate twitter stream just blew up.

But Let Me Step Back A Bit

Finovate, which I dubbed the Disneyland of Fintech™ a few years back, is the premier financial technology conference established by Jim Breune of Netbanker fame and its gifted co-founder Eric Mattson. If you have an opportunity to meet Jim and Eric and talk shop, you’ll be more than happy you did – they are genuinely great people. Fantastic conference, and a fantastic team.

What, you’ve never heard of Finovate and you’re following this blog?

Finovate is 64 companies over 2 days, live demos, and nothing but live applications (well, *live* is sometimes a stretch). Overall, the conference has always been a fantastic experience, and it is now in four locations: New York, San Francisco, London, and headed to Singapore in November.

But let’s get back to talking about this morning.

Best of Show Already Won On Day One?

While there will be a number of Best-of-Show-worthy entrants at this NY focused Finovate conference (LearnVest, Personal Capital), I can just tell that one of the winners has already been firmly established.

It’s a little PFM firm out of Utah. And they’ll likely hate that characterization – because the team is thinking way beyond PFM.

Enter MoneyDesktop.

Outside of being the fastest growing white-label PFM application in history, the team at MoneyDesktop is on fire.

OK, I made that up, the largest PFM provider (and likely the fastest growing) remains our partner Intuit with FinanceWorks and Mint (and likely to get bigger with this week’s little API announcement).

MoneyDesktop entered the PFM space just a few years ago and now have over 300 clients in the PFM space. After their Best-of-Show win at FinovateSpring in San Francisco, they have the attention of much larger U.S. based financial institutions and a host of larger fintech players that realize the need to refocus on UX.

User Experience Trumps All

That was my message in the spring, and it’s the same message now.

And it will continue to be my mantra as I build out my bank’s technology stack and further partner in the fintech, banking, and payment application space.

Why all the excitement about the MD UX? It’s a fresh approach to the stale, linear look of online banking, and charts and graphs of some of the other PFM providers.

Do I want them to do more? Absolutely.

There is much to be learned across the fintech spectrum (and even better to look outside of fintech), and the landscape is changing every day – but you have to hand it to them, they are moving things forward. True, as several of my fintech friends pointed out, their UX borrows a lot from Bundle, and other applications – but the way they interface dials around financial data is still pretty unique.

Build For One, Apply to All

Primarily a Ruby shop, MD makes multi-device, single application development look easy. And it’s not. That’s why I have a great deal of respect for Ryan’s team. They are able to move their product forward in big chunks, continue to improve their application while in hyper-growth mode, and seem to have a great deal of fun as they work their ass of. I can really respect that. As I can respect the passion exhibited by everyone I have met on the team.

You Need To Control Your Own Spin Like Your Life Depends On It

Even if you don’t see the MoneyDesktop application as the best thing for your financial institution, there are some lessons from this morning that can apply to just about any business. As I have written about many times before – social has changed the way we evangelize our company, the way we market our products, the way we connect to prospective employees and prospects (see my thoughts on American Banker last week).

MD is doing these things very well, from their social-savvy team to their code-infused billboards to lure developers – this should be a lesson for the larger fintech players demoing at Finovate and presenting in boardrooms.

They control their own spin. Whether they actively discuss it or not.

They develop their evangelists. Whether they strategize that or not.

And they own social chatter at conferences like Finovate.

Which is just as likely to be snarky as it is positive.

Just ask Jim and Eric about the tweets complaining about the Wi-Fi.

So that’s why a product’s user experience matters.

Ship something highly engaging, you’ll start to get the right kind of attention.

While they may not necessarily integrate social chatter within their applications (at least not yet), but the MD team connects with people in the banking and fintech industry exceptionally well.

Matt West (aka @matt__west), Nate, Dave, and the rest of the sales and marketing team not only work to evangelize their product well, but they connect and follow-up with people in a very engaging way.

Maybe it’s because their from Utah and not New York City, I’m not sure…but their enthusiasm and follow-up are things your fintech teams need to be looking at.

If you are going to have impact with decision makers, then you have to reach out, and prepare to physically own a conference that gets a positive sales boost (like at Finovate). These things matter.

Pertinent Microsites Matter

MD also had a nice microsite with a similar demo from earlier today at the ready – and are sharing it effectively to people at the conference and those trolling the #finovate feed.

Take a look.

From the MD site:

MoneyDesktop Inc. introduces MoneyMobile and our new MoneyDesktop “widgets” – the worlds most powerful and engaging financial platform that will change the way your account holders feel about financial management. MoneyDesktop and MoneyMobile’s award-winning designs makes managing money not only easier and more convenient – but a lot more enjoyable and exciting as well. Now, your account holders will be able to visualize their data in meaningful and engaging ways on their desktop, tablet and phone. Created with the philosophy that “User Experience Trumps All” – MoneyDesktop and MoneyMobile will make you want to reach out and touch your finances!

Why PFM Matters

I like the idea of moving financial management tools front and center (in essence aggregated cross-channel white-label PFM becomes the interface), and combining these tools for consumers and small businesses to engage with their data (that’s the key – getting users energized to actually actively manage their aggregated financial goals). For that reason, I am a big fan of a host of other PFM providers as well – from Intuit, Geezeo, Meniga, Perfectsen, and others – and like MoneyDesktop, the development and sales teams at each are top notch.

It doesn’t matter if it’s white label to banks and credit unions, or if it’s direct to consumer/business – the idea behind PFM matters – let’s work together as an industry to make it better – to learn from companies like these, and interfaces like Movenbank and Simple – to truly have impact in our client’s lives.

The banking model is changing – the key component of successful banking application development will be the user experience (presentation layer) combined with exceptional experiences and value added functions that leverages financial and personally identifiable data (a whole other series of posts).

Maybe that’s a little too much twitter talking, or maybe it’s the iPhone 5 announcement that has me punchy and upbeat – but whatever it is that inspires you to make your products and services better, just move it forward.

User experience matters, the way we interact with, protect, and offer value through data matters – especially for fintech applications.

Stop talking, start doing.


There’s one more day of Finovate – time to really start innovating.

Intuit Opens Up APIs To Financial Data Behind Quicken, QuickBooks, Mint (And Even FinanceWorks)

Intuit is opening up a new host of APIs to their Financial Data Services applications.

This API opens up the following applications:
Quicken, QuickBooks, Mint (And Even FinanceWorks) 


OK, maybe wow.

The new API suite promises to give access to data from over 19,000 financial service organizations. That’s a lot of data – and a lot to be concerned about because it sounds like it’s not just the aggregated data – the applications may be able to use personal user data to offer individualized value propositions and targeted applications for payments, rewards, loyalty programs, if-then-then-that banking actionable notifications – and more.

Is This A Threat to Banks and Credit Unions?

It depends on what we see this data used for, and what banks and credit unions can then leverage themselves (or through their own partnerships). We’ve been hearing tidbits about opening up pieces of the banking application platform for some time. But this API isn’t the open platform to Intuit’s Online and Mobile banking applications that clients are waiting for (and just about every major direct to FI fintech provider seems to be talking about).

This API can theoretically access the data behind every user account that uses one of these applications – that’s over 20 million users of Mint and FinanceWorks alone (I’m not sure how many more use Quicken/QuickBooks…but a number of factors above that number  and over 60 million who use Quicken and QuickBooks).

That’s a lot of people, and a lot of data.

And a lot of possibilities.

It surely will increase competition in the financial ‘big data’ space – something most FIs are already pretty bad at leveraging – after all, Mint, Quicken, and QuickBooks and their targeted advertising has mostly been looked at as competition by most banks – cross sells to the larger bank advertisers like Ally Bank – or to Intuit’s own products.

Access to FinanceWorks data is even more interesting – this PFM solution was designed before Intuit acquired Mint. It’s now used by over 10 million banking customers – and represents the largest ‘pseudo-white-label’ PFM out there.

It sounds like FinanceWorks will see more changes soon – FW is apparently slated to merge with direct to consumer Mint sometime in late 2012, initially for small business (and may disappear as an offering in favor of Mint – something most FIs would probably have mixed feelings about). I’m actually excited about the idea – the Mint UX has always had better focus, better ad targeting, and while it’s showing its age, it is certainly a step up from the functionality of FW.

But let’s get back to the API.

So what are banks and credit unions to do? Now even more companies will be able to leverage this transaction and payment data – those startups and other fintech companies willing to partner with Intuit – potentially offering further disruption to the banking model and income streams.

Or is it much to do about nothing?

Is the expansion of the API simply opening up the data stream to additional developers a way to pad Intuit’s revenue stream, in essence opening up Web Connect, DirectConnect, and the OFX back end connectivity to financial institutions for new income and third party innovations to leverage within Intuit’s own technology stack? Or is it an opportunity for banking? Here’s how they position it – examples of what you can do with the data.

An Opportunity for Banking?

How can financial institutions leverage this data? Whether through partnering with Intuit directly, adding third-party applications leveraging the larger data sets, adding functionality within their online and mobile banking stack (powered by Intuit or not), or partnering with external Intuit approved developers adding functions easily adopted by consumers and businesses – these institutions open to this development might be in the best position.

It’s time to start re-thinking the utility of the banking model – and the use of the transaction data stream. Moves like this by Intuit make it only more clear.

It is an interesting move that is sure to get some developers coding very soon (and hopefully some of them will be within the banking industry).

That’s access to a treasure trove of transaction data.

Let’s see where it goes.

Chime in.

Here is additional information on the API from Intuit and the media.

Download the PDF here. Connect with the Intuit Developer Network here.

It’s not the first time Intuit has opened up an API to third-party developers to access their applications. Read more here and here. There was even a brief Quora page to address the topic.

What else is Intuit working on? Look at their list of current projects.

From TechCrunch:

Intuit is announcing today the availability of a new API that will give third-party developers access to the financial data service that powers Quicken, QuickBooks,, and FinanceWorks. Basically, Intuit is allowing developers to tap into transaction information from 19,000 financial institutions, autocategorize this data, and embed it into applications.

While the Intuit Partner Platform already offers third-party developers access to QuickBooks data, this new financial data service will allow third-party technology providers to offer their customers access to their own financial data from thousands of sources of personal and business banking, brokerage, and investment accounts in the U.S and Canada. Intuit says that developers can use this data to track customer insights and support automated delivery of targeted guidance and offers based on the customer’s unique financial situation.

For example, SaveUp, a free rewards game for saving money and reducing debt, is using the API and aggregating financial information from users who opted into its program. The API will be available on a limited basis in October through the Intuit Partner Platform, with wider availability in December.

From ZDNet:

Intuit is gearing up to open up its application programming interfaces to its financial data service in the United States and Canada for the first time ever.

The idea behind the open APIs is to spur innovation for developing new personal and small business finance applications from third-party developers.

Essentially, Intuit is offering resources to find what could be the next QuickBooks or

The APIs will also offer developers with the opportunity to develop new tailored apps for their respective customers based on data from more than 19,000 sources of personal and business banking, brokerage and investment accounts in North America.

It’s important to note that Intuit specifies that technology providers can only create solutions based on data given with customers’ permission.

Aaron Patzer, founder of the Intuit-owned personal finance platform Mint, emphasized in prepared remarks about the importance of this kind of information being available to developers as access to reliable financial data is “among the biggest challenges developers face when working to innovate.”

“These new APIs will accelerate the pace of development we’ll see at startups looking to create new services for both individuals and businesses,” Patzer continued.

The small business software provider asserts that this is a big move for the company as it is touted to be a win-win situation for both Intuit and its customer base. Specifically, customers should win thanks to more offerings tailored to them by leveraging data while Intuit is boasting to be improving the cost for developers seeking to access this data.

The open APIs to Intuit’s financial data service will start rolling out on a limited basis in October through the Intuit Partner Platform. Up until now, this platform has only offered QuickBooks data.

Wider availability is promised to commence in December.

How does your bank innovate?

Does your bank have a sandbox?

An incubator for experiments?

A place where failure is allowed?

Then how do you innovate?

I’ve been researching several fintech and banking topics for an upcoming presentation around opportunities beyond our typical product, service, and technology stack. We’re discussing banking’s value paradigm and how we could conjure innovative paths that drive both new sources of revenue and new types of client value.

Here are some of the things I am addressing. What is banking going to look like in 2020? What will impact our traditional model of financial service delivery? What type of new services or opportunities are being delivered by alternative providers today? How could we leverage alternative financial business models and how could they impact future revenue generation?

If you had to pivot the traditional banking business model, what would that look like? What are the primary ways banking is being disrupted – what are the key areas of vulnerability?

Those sorts of things.

The topics discussed might end up ranging from simpler consumer market expressions, like the power of social data and influence on conversion across related verticals, leveraging changing demographics in our marketplace and how attitudinal shifts impact traditional product positioning, along with likely coverage of low-hanging fruit (and personal pet-peeves) around under-utilized portions of online and mobile channels (including suggestions to improve PFM, deals, mobile transaction capabilities), lost opportunities across mobile payments and proximity based rewards, and how we better leverage transactional payment ‘big data’ in new ways to offer expansive client value.

My field for topic discovery is still fairly open, so I welcome your feedback on your vision of banking’s future. Where will we derive future revenue from, and how does that revenue pie look different than today?

Or are we already firmly planted in a multibranded-multi-channel-banking world? Some great dialogue related to this comes from Chris Skinner’s the Multibranded Bank and Brett King’s the Economist Debate on Are Bank Branches Obsolete?

One topic I am digging into is really intriguing to me.

It’s leveraging on what Innotribe’s Peter Vander Auwera calls the Digital Asset Grid or DAG. DAG presents the idea that as the banking model evolves, people will look to leverage the trust they hold in financial institutions (and related infrastructures) to evolve from the protection of monetary (and in many cases physical) assets and the facilitation of payment transactions, to a much deeper level of protections for every aspect of our digital lives.

The premise is that we offer our personal (and business) information too freely – and corporations are leveraging (and making large sums of money on) the information we share. Consumers (and businesses for that matter) should have a stake in not only the protection of this shared data, but in the revenue associated with it. In essence, start valuing what is currently devalued. At the heart of the DAG concept, is the ability to better (or ideally completely) control ones digital assets.

Can a secure, bank-built network enter into this Digital Asset Grid equation and offer value to all parties? Conceptually, I find the idea fascinating, and am reviewing several paths where this makes sense from a revenue standpoint. But DAG will serious investment and a huge amount of faith to become reality.

What’s more interesting about DAG is that Innotribe plans to walk through their business model next month in Belfast.

I’ll dig into this in future posts, but for now, get familiar with this topic because I think it holds some promise for banking beyond 2020.

First, view the excellent post from Kosta Peric, Co-Founder of Innotribe, the innovation arm of Swift (Society for Worldwide Interbank Financial Telecommunication): The Castle And The Sandbox: How To Innovate In Established Companies

Next, watch the video below that includes an introduction of the concept of DAG, along with the challenge of innovation.

This video comes from the TEDxNewWallStreet-FinOlympics presentation by Peter Vander Auwera (aka @petervan), Innovation Leader at SWIFT. In this video, Peter discusses a story about babies as a metaphor for ideas, sandboxes for experimentation for financial institutions.

Here are some related posts around the concepts of innovation in banking, Digital Asset Grid, and more:

What Banks Can Learn From Silent Movies…And The Titanic

A Global Exchange For Personal Data

“Global Data Banking”: Are the Banks Really Ready?

How Banks Might Transform Their Businesses and The Future of The Internet

Who Do You Trust More with Your Data: Facebook or a Bank?

In finance, facebook is just a phase we’re going through

Banks should follow Google’s approach to privacy

Digital Asset Grid Concept

Our traditional banking model is being disrupted because of many factors, including a) key industry players underestimate (or worse taking a blind eye to) the changes to core revenue areas within the business model, b) our inflexible infrastructure makes us less able to quickly capitalize on recent shifts in consumer and business behavior (as well as the flexibility needed in this new era of changing demographics, new economic realities and regulatory environment) and c) our lack of champions make it nearly impossible to achieve scale and derive return on even the simplest of innovative applications.

In order to facilitate long term change, we need a sandbox to innovate, we need to be able to learn from failures, and take on additional risks to see which new planks with the traditional model may stick.

Take some time to watch more industry players discuss innovation, and how it’s often necessary to pivot your business model to succeed.

Scott Anthony tells #NBASG12 how companies need to confront transformation (below)

Read Reid Hoffman On PayPal’s Pivoted Path To Success Watch the video.

As always, let me know your thoughts…here or through twitter.

Brett King: Presentation On the Utility of Banking, Mobile Payments & More (Video)


On the heels of the Bank Innovation Conference in San Francisco, the Bank Innovation team has shared a great presentation Brett King made for the Social Mobile Payments Conference, produced by Bruce Burke.

Learn more, and sign up for the next wave of banking at Movenbank.

Learn more about my own thoughts on bank 2.0, banking industry disruption, social media, mobile payments, and other engagement banking technology in my recent Backbase webinar 10 Key Trends from the Community Banking Trenches (webinar recording at lower left, complete slides from Slideshare at right).

Original source: Bank Innovation

Which keeps you up at night: Alternative currencies or alternative payment technology?

Nobody gets me Bitcoins!

Image by zcopley via Flickr

There was an interesting article and discussion today on American Banker‘s BankThink. American Banker’s Jeremy Quittner wrote an article about Bitcoin being highlighted in a legal case on an episode of the Good Wife this week. Brief Clip

If you want to learn more about Bitcoin, here’s another great Quittner article from a few week’s back For Banks, Digital Currency Poses Threat — and Opportunity

Read the Good Wide Bitcoin article here: ‘Cool, But a Hassle’: Bitcoin Tests Merchants’ Patience

I added comments on American Banker, and wondered what you thought of Bitcoin? What are you most focused on in fintech? Alternative currencies like Bitcoin/Facebook Credits/iTunes or mobile money movement through more traditional channels with less-traditional technologies (think Dwolla, Square, Paypal, etc). Am I missing something on alt-currencies? Let me know via Twitter: @leimer

Here were my comments on the American Banker post:

Are alternative payments like Bitcoin a curiosity or just a progression toward the ongoing transactional shift away from traditional banking (or traditional currencies for that matter)? Though the volume of alt-payments/mobile payments is growing rapidly (astronomically some might say), the vast majority of consumers and merchants still do not see the use of the established volume leader, Paypal (amazing growth under the recently departed Scott Thompson), as a form of regular payment activity.

The innovations of currency alternatives like Bitcoin (and mobile payments) are a great destination, a great promise of better technology and control around money movement and control for consumers and businesses, but it is often an overhyped ‘promise’ of what is to come…Yes, volumes are on the rise. Yes, some amazing technology is being developed and implemented. Yes, the user experiences around contactless payment (NFC, alternative POS), and alt-currencies (Facebook credits, even iTunes) are currently being established (certainly Google and Apple will have some say about this).

But how much do banks need to pay attention to alternative currencies? Yes, we should be prepared to integrate and embrace technology change around money movement of any kind. But, if you’re in banking or fintech, you’re probably more closely watching alt/mobile payment volumes rise and crafting/enhancing your payment/money movement technology at your own financial institutions in response. I wouldn’t worry as much about the Bitcoin model/alt currencies just yet. They’ll most likely take the back seat to money movement through traditional players (and in the alt-currency space, I would be more concerned about Facebook Credits than Bitcoin).

Money movement alternatives like Paypal, ZashPay, Cashedge/Fiserv’s PopMoney, Dwolla, Square (+ others) do have a built in ‘hassle’ within the user experience because of the need to link to additional traditional banking accounts somewhere. The person/merchant receiving funds also have to be on the same network or sign up/trust these providers. It seems like the only way to eliminate this is with an established alt-currency (how is the Euro working out, let alone the anti-banking alternative digital Bitcoins?), or an established open-API method of money movement (better solution). To address the overall UX, we need to integrate both technologies into the devices we carry everyday (our phones), whether it be through form factor (NFC/alt-device) or network apps (Paypal POS, Proxense, etc.). The UX still would take a back seat for alt-currencies like Bitcoin until you bridge the additional gap in the trust factor (Paypal itself, even with great UX, still isn’t as trusted for money transfers as a traditional financial institution).

We will have some time to watch these standards develop. As we watch the volume of alt-payments rise, the overall volume will be a limited space in the overall consumer/b2b payment pie. The true revolution in banking that everyone sees coming like a lumbering freight train is still there. It’s less about alt-currencies and more about overall experience through technology. But Movenbank and Simple aren’t going to change the world of banking overnight, nor has (or will) Bitcoin or Paypal for that matter. But changes are here, they’re real, and there are more are on the way (Paypal, Square, and Dwolla are will see monster jumps this year to be sure).

The fact that the Good Wife even tackled the subject is interesting. The audience for the episode probably increased awareness of Bitcoin in Peoria more than anything Bitcoin’s banking industry coverage ever did.