A challenge to Wesabe

Wesabe have launched something quite significant: they've opened up their data to other applications, applications outside Wesabe itself. That's important, because it makes it possible to create mashups and other kinds of apps using an individual's financial data. It is also important because, as they quickly point out, it provides an API to the bank, even if the bank doesn't provide one itself.

Wesabe has consistently surprised me at how well they are reading the very forward edge of the market, and I have to admit that their's is a case study of why the small , nimble organisation is so much better placed to serve the niche the big institutional players that have held sway till now.

Anyway, when I first read the press release (Wesabe are marvellous at letting everyone know when they are doing something new, so hat-tip to them), I was pretty excited. I was thinking, immediately, it would be possible to mash their data into our internet banking platform. Wesabe, because of its operational agility, has been able to build something that would be much more complicated and involved for a bank to build. And, to top it all off, they've got data that spans the market, something that banks themselves have tried (with account aggregation) and largely not been able to make work very well.

So integrating Wesabe into a bank web site seems to me to be an exercise that could be interesting. The exchange in value is obvious – a banks many millions of internet banking customers would get a better experience as they shared their classification and collaboration, whilst at the same time, Wesabians would have the value of the input of those same customers.

Of course, it is the read-only nature of the new interface that causes the problems here. While it might be possible to get the customer's Wesabe based data into the internet banking channel, it wouldn't be possible to provide the facility to update it. They'd have to go outside the internet banking site for that. Considering a Wesabe customer is going to be in the IB channel to get the transactions to start with, (or at least, use the downloading tool that Wesabe provides), it isn't the best user experience I can imagine.

So my challenge to Weabe is this: you have opened up your data to end users, and people that have been given permission by those end users to use the data. Now take it one step further and allow those users to add the Wesabe classification in the bank channel where they are going to get the transactions in the first place. I suspect that forward thinking banks will be interested in a discussion around how to best work with you to make such a thing happen.

Comments

[Mike Schoeffler]

Bravo. Much of bank internal discussion around the web 2.0 world is fear-driven. This is a smart play to leverage up Lloyds' enormous power with Wesabe's agility.

That Lloyds can even entertain the thought speaks to the power of an open API interface and Wesabe's careful attention towards customer privacy.

For both parties' sakes, I hope this idea has legs.

[Marc Hedlund]

Hi, James,

Thanks much for the interesting post as usual.

We do in fact already have an upload ("write") API -- the Wesabe Uploader has been using it for a year now. We did not, as you note, document the upload API yet, simply because its use is more complicated and not yet consistent with the APIs we did release. We're planning to include a documented and supported upload method in a future release of the API.

It sounds like your challenge is that we provide APIs for all of the services we offer, and allow any party, including a bank, to represent those services on their own site. Am I correct in my interpretation?

Let me turn the question around and ask, what Wesabe services do you think a bank would most appreciate having APIs to access? Let's say that we created an API for our community advice (tips) -- it seems to me that a bank would be resistant to tips knocking their own services or recommending a competitor's services -- wouldn't you agree? Do you think this would be a barrier?

I am perfectly happy with any individual or organization, willing to comply with our terms of use, utilizing the API to create services on their sites. There's nothing in the terms of service that says, "everyone (except banks) can use this," and for the reasons you mention, I can't see why we'd add that. I think any financial institution would have to decide whether they are comfortable using our APIs, but if they were, we'd welcome it.

Thanks again.

Marc Hedlund, Wesabe

[Pol Navarro]

Just evolve your API as James appointed, and bring us an spanish version of Wesabe, and you'll have an oportunity to integrate with spanish bank...

[Colin]

Interesting discussion, and I like where it might lead. The concept that Banks will need to get over, is that of entertaining discussion of themselves online, with examples such as direct competitor comparison, as Marc Says.

This discussion is happening online in any event, and online reputation cannot be kept in a box and contained anymore. Working on integration with services such as Wesabe would be a first, and I believe customers broadly would take positive note of that first.

[James Gardner]

Here at the bank, there is an ongoing discussion about UGC being shown in channels we own. The key question: is it a net positive if negative remarks are allowed against product and transaction data? I think, personally, the benfits way outweigh the risks. That is not a universal feeling internally however, though perhaps the tide is changing. In any case, Colin is correct that the discussions are happening anyway - we know that lots of our people are active in various forums around and about the place - often anonymously - on both positive and negative sides of the fence. Why is it not better that those discussions happen in the context of our brand?

Marc, in answer to your question, access to all the Wesabe services would be potentially interesting. Certainly the community advice stuff is an opportunity, as is the classification data you're collecting. This last is a problem for all of us banks, I think, and one that you could usefully solve for us.

I note that Pol at Banco Sabadell has also expressed his interest. I'd imagine that the two of us are not the only ones with an interest.

[Colin]

James .... re "I note that Pol at Banco Sabadell has also expressed his interest. I'd imagine that the two of us are not the only ones with an interest."

First off I would not be too sure that there are others with interest, at least from North America. I was involved in the Forrester Forum in June, and the appetite amongst North American Banks for anything like this is nil.

Frankly I see an enormous opportunity for differentiation, and more importantly that old over-used term .... "first mover advantage"

Good luck!

[Colin]

@Pol ... why not make it a project at labs.sabadell to automatically translate Wesabe?

[William Azaroff]

Hi James. Colin pointed me over to this discussion. I am fascinated by this model and would love to move credit unions (at least in Canada) in this direction. I respectfully disagree with Colin, at last one FI in North America is discussing it...

@ Marc, one thing I would love is to allow our Vancity credit union members the collective wisdom of their fellow members. One thing about Wesabe (correct me if I'm wrong) is that it aggregates all data. There is a vast difference in spending patterns and priorities between someone in, say, Lexington, Kentucky and someone in Los Angeles. As a regional credit union in Vancouver, I wonder if Vancity could benefit from segregating their own members' data (or at least data of people within our geographical region) and promote Wesabe to users of online banking. Then we can see patterns for consumer choices within a set geographical region, and the companies seen in the Wesabe transaction data will be known commodities. This could be of incredible value for a smaller player.