It's so frustrating to hear banks stating that they are the "innovating the future of banking" but all they provide are various bunch of "apps" as a self service banking feature. Though their customers are happy that they can do their own banking privately, the banking information are displayed in the format the banks so wishes, probably to confuse us (e.g., the "available" versus "available balance" amount, particularly when you are broke, one thinks that they have money on "available" while "available balance" states zero?).
Various companies came to the challenge to provide an informative banking information that ordinary banking citizens can understand. Remember Mint.com, an online financial management service that organize and categorized your spending so that you could understand your money easily? Initially it used an online aggregation service, Yodlee to aggregate your online banking site and fetch your financial records. That relationship ended, and they, subsequently, used their parent company's technology, Intuit.
Now, coming back home, South Africa, we have a similar online service too, 22Seven. Like Mint.com, it too uses Yodlee for data aggregation.
If you're smart (which I know you are), there are various alarm bells ringing in your head: one of it being security.
PS: After publishing this post, I stumbled upon this article from Gartner. Though the article is dated 30 October 2012, the content and its context is relevant today.
Various companies came to the challenge to provide an informative banking information that ordinary banking citizens can understand. Remember Mint.com, an online financial management service that organize and categorized your spending so that you could understand your money easily? Initially it used an online aggregation service, Yodlee to aggregate your online banking site and fetch your financial records. That relationship ended, and they, subsequently, used their parent company's technology, Intuit.
Now, coming back home, South Africa, we have a similar online service too, 22Seven. Like Mint.com, it too uses Yodlee for data aggregation.
If you're smart (which I know you are), there are various alarm bells ringing in your head: one of it being security.
Security concerns
The number one issue that exists with using an aggregation service: your online credentials. Yodlee is a screen scraper. Using your provided online banking username/userID and password, it uses intelligent scripts to scrape the data off the screen. Think of it this way, once you log onto your online banking site, whatever you read (your financial data), that's what the screen scraper reads too. Without your username and password, it cannot scrape your data.
Concerns?
- Yodlee stores your online banking credentials (in an encrypted format surely).
- Should the customer change his/her password, the password will have to be changed on Mint.com or 22Seven as well.
- Should the bank change its UI (User Interface), Yodlee script will fail, so they will have to update the script to conform to the new banking UI.
Some SA banks also had expressed their concerns with regards to providing client credentials to 3rd party systems. One had gone as far as to have blocked Yodlee services from scraping on their system.
Banks do have legitimate concerns: Any financial records of all clients should never be changed nor deleted at all through external sources. Even account cancellations done within the bank are new additional records that shows that an account has been cancelled. Nothing gets deleted or altered (even during a mysteriously duplicate transactions scenario).
With today's technology, apps must not only display information that the consumer already knows ("I know I am broke!") but we require it to be smarter. We see the rise of the fitness apps, so much so that one company has provided a health service on their mobile operating system. In a nutshell, our lifestyle is becoming digital and smarter. Why not banking?
If banks wants to be innovative, they will have to create an API that will allow other developers to develop banking of the future. Imagine if people could bank with voice or an app that could study the behaviour of your spending and suggest ways to save money while keeping to the same lifestyle (by searching for better prices elsewhere and recommending stores that provide the same quality product at an affordable price)?
The Open Bank API
Upon doing my research, trying to find what Banking API's are available that interacts directly with a bank itself, I stumbled upon The Open Bank Project. The Open Bank projects provides an open source "API for banks" that external developers and companies (outside the banking institutions) can use to build other applications and services using transactional data provided by the banks. For those security worried freaks, they use an internet security protocol and technology called OAuth. What OAuth protocol provides, quite simply, is the ability for the consumer to access its protected (private) data by authenticating to the service provider directly (and not through the 3rd party service, like Yodlee). This means that a customer of BEEP Bank will login directly to BEEP Bank online banking platform before the 3rd party application can access the data.
API's like the Open Bank Project opens a new perspective in banking technology. This will provide the bank to branch out of the norm and provide additional services, such as:
Thanks for reading!
API's like the Open Bank Project opens a new perspective in banking technology. This will provide the bank to branch out of the norm and provide additional services, such as:
- An online banking app store: (External) companies and developers using a banking API will need to follow stringent banking developers guidelines and app regulations. Customers could download apps from the banking app store with peace of mind that the apps has undergone stringent processes to getting it approved and available for download. Just a thought: Maybe Apple might look into this concept too?
- Banks now becomes a platform. This will be transparency by the banks by exposing the banking data and transaction services. After all, the banking data belongs to their clients, they make it happen!
I will like to extend this further and will like that (this applies to South Africa, but you know how it works in your country) all institutions that are legally registered at the Financial Services Board should provide an API that can be used by external developers and companies. We can have an Open Insurance API, Open Credit API (which includes credit report from both Experian and TransUnion), etc..
Summary
Money is a hot topic, and banking is always done by behaviour. The behaviour can be personal or affected by external change. My behaviour and factors that results in my behaviour is different compared to my neighbours and it will affect in the way I bank. A behavioural banking app can provide a "shock value" to its consumer. Example: The reckless borrowing of money & its spending habit: How it can affect their short-term goals; or suggestive ways to invest into a child's education, etc. It's all about context, behavioural context and each context is different for each individual.
For those with physical disability, verbal banking can be one aspect to look at (see the video post below).
With the collapse of ABIL and the way people panicked, don't you think it's time that we have an overview and understanding of where our money lies and the in/out flow of it?
Note: Will this technology (APIs) replace financial advisers in the future if we had intelligent banking apps at our disposal?
To understand where I'm going with this, here's a video from PrivatBank.
Thanks for reading!
PS: After publishing this post, I stumbled upon this article from Gartner. Though the article is dated 30 October 2012, the content and its context is relevant today.
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