Banking 2.0 at SXSW

Sunday, March 14, 2010

Banking 2.0 at SXSW

I went to a session on banking 2.0 at SXSW yesterday. The panelists were Rob Garcia (Lending Club), Kenneth Lin (Credit Karma), Aaron Forth (Mint), and Bob Weinschenk (SmartyPig).

The most interesting comment of the panel came from Bob Weinschenk… I don’t have a direct quote, but to paraphrase: Look at the way you bank today, you likely have a credit card from a separate institution, you use ATMs from separate institutions, you borrow money (mortgage) from a separate institution, and with Mint you’re consuming the data from a separate institution. The functions of banking that were traditionally all under one roof are being fragmented and microchunked into separate functions, and each of these functions can be their own business. Your bank is just the place you hold your money in order to engage with these services elsewhere.

Bob only expects this trend to continue, and more services you do with your bank today will be shaved off and turned into new business segments, and I agree.

The second most interesting comment came from Aaron Forth from Mint regarding OAuth. Mint today directly collects your banking credentials, which I imagine has to be a significant point of friction in their sign up process. A session attendee asked Aaron if he thinks the banks will implement OAuth in the future, and if Mint is pushing OAuth at all.

Aaron answered “no (and no)” because he thinks that consumers don’t know what OAuth is and it will just add additional doubt/fear to the process. Mint works very hard to make their brand/design foster trust, and if they inject an OAuth workflow into the sign up process, users will now have to consider the trust of a third entity. Users will say to themselves “I know and trust my bank, and I am learning about this ‘Mint’ company and trust them so far, but who is this ‘OAuth’ company???” Of course, OAuth is a protocol, not a company, but most users don’t know that.

I understand Aaron’s hesitation, but asking for users bank credentials directly will always be a liability and will continue to reenforce bad password habits, so I disagree with Aaron. I would throw his hesitation back on him as another design challenge, one that the excellent designers at Mint can likely handle with enough testing and iterative design.

Overall it was a great session.