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The question Wesabe is asking

July 27, 2007

Wesabe has an unbelievable product available to anyone who has the facility get get at their transaction data. They have delivered what some of us have thought about for awhile now, financial data and tagging. And they have brought how to use tagging to the easiest method imaginable. Then you have their graphing function, the ability to ‘vote’ on how you think the supplier is, Firefox uploader, browser snapshots, the list goes on. Did I mentioned the social networking aspect of giving financial tips?

So the question is, as a credit union, do you build something like this, which will take time and money and probably be a poor imitation. Or do you say to your members “This is the greatest thing since sliced bread. Here is what we can do to get you going on a truly innovative and valuable service!” But wait, some will say, and so begins the “if we don’t build it others will and we will loose out” discussion starts or “we must build it or it will dilute our brand” discussion continues.

What really should happen is that the member’s data, their financial transactions, should be viewed as their’s, not the banks or credit union’s. They spent the money, and paid for the service, they have every right to do with it as they see fit. And if Wesabe’s service is what they want then we should respond by doing what we can to make it easy for them to do it. And we should work with Wesabe to see how collectively we can serve our members better.

Will this model work? Yes I think it will because a good idea is a good idea is a good idea and you can’t keep something like this off people’s radar screen. Is it a revenue generator? No but does everything we do have to be. It builds a relationship. It assists people in getting a handle on how they spend money. It helps them to save money. It does everything that we have been trying to do, promote common sense and money usage.

As I have said before, banks and credit unions have become something like huge castles with moats around them and the drawbridge up. Then the Wesabians come marching up asking for what is theirs to do what they wish to do with it. We can lower that drawbridge and stop this financial feudilsm that is wasting time and resources for everyone. We need to listen that some have chosen a new financial polity.

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13 Comments leave one →
  1. July 27, 2007 6:18 am

    Great points. Two comments to build on this:

    1) Not only do the banks think that its “their” data, but the various departments and LOBs within the bank fight over whose data it is!

    2) Thank you for including CUs in your comment about “huge castles with moats around them.” It’s not just banks that have fallen into this trap. I’m getting really tired of hearing all the “we hate banks, we’re the little guy, we’re community focused” stuff from the CU community. I loved the quote that William Azaroff cited on his blog from Jesse Robbins (not repeated here as to preserve the “suitable for young children” rating this site gets). But you can see it here: http://www.azaroff.com/blog/2007/07/barcampcreditunion.html

  2. July 27, 2007 7:12 am

    Here, here Gene.

    This is one more piece of the user revolution taking place that credit unions need to be aware of and ultimately embrace. It reminds me a lot of the technology wars and how things can just creep up and take over. A few years ago all the talk was about Microsoft versus Linux versus Apple then all of a sudden all the momentum shifts to Google—a fresh young start-up who made things easy and useful. Tha’s a lot better than hard and useless.

    Tim

  3. tinfoiling permalink*
    July 27, 2007 8:06 am

    Ron – Jesse’s quote should have been taped as it really hit home. What bugs me is that when they say “we hate banks, we’re the little guy, we’re community focused” they think it gives them the excuse to sit back and do nothing. No change is exactly that, no change. Status quo. Don’t they see that the people who they are wanting to be members can see this? IF they were really and honest why the hell don’t they have real people answering the phones instead of a machine. Or giving out term loans for small amounts instead of shifting it to a credit card. Or…..well you get the picture.

    Tim – easy & useful vs. hard and useless. Sounds like some people need to get another tattoo. But where to put it?

  4. July 27, 2007 8:13 am

    Gene,

    Thanks for the kind words regarding our product. I’d also add that we don’t know what is possible when Wesabe and CUs work together…and we do want to work together.

    I suspect that we will help create a feedback loop that not only supports the members decision to use their CU, but will help drive new members into CUs.

    I forwarded your post to our entire team – thank you for the encouragement!

    Jason

  5. July 28, 2007 2:56 pm

    Hi Gene, great post. I love the conversation Ron started here:
    http://marketingroi.wordpress.com/2007/07/27/its-a-good-thing-i-wasnt-at-barcampbank/

    If banks and CUs only care about their own profits, then they’re not going to create real loyalty with their customers/members, but merely a fake sense of loyalty (a holding patterns until customers get so pissed off they resort to the pain in the butt known as switching).

    Using Wesabe could be a great way for FIs to demonstrate to customers that they want to give them tools to make better financial decisions, even if there’s nothing in it for them. Of course what’s in it for them is a practically free to way to create a personal financial management tool for their customers, saving themselves a fortune developing what, in the end, would be a mediocre product.

    And PS, can you fix the link to my blog in your sidebar blogroll?

  6. tinfoiling permalink*
    July 28, 2007 9:10 pm

    Sorry about that William. The descriptive URL was right, the actual link was non-existent. Whoops.
    You bring up a great point about “a fake sense of loyalty”. IF people use Wesabe, like it, find value in it, and have a definite loyalty to it’s use, then individuals will begin to make sure their choice for the next FI, when they do switch, is going to be Wesabe compatible. IF the FI endorses someone like Wesabe then they will be part of this ongoing movement. This is going to get very interesting, very quickly.

  7. Kennith permalink
    July 29, 2007 9:04 am

    What objective metrics about the composition of the people actively participating in Wesabe and the actual improvements in consumer spending and saving among Wesabe users can you point to that justifies your unqualified support of Wesabe?

    You and most of your readers seem to be totally enamored with social networking without having the supporting metrics to make your opinions credible.

    I would think that a large percentage of users of Wesabe are among the poorest savers and managers of their money. The wisdom of a crowd is totally dependent on the composition of the crowd and if it’s weak………. I suspect there is a reason why Wesabe has never posted numbers and demographics of their users.

    Is this a blog of totally unfounded positions or something more?

  8. tinfoiling permalink*
    July 29, 2007 12:19 pm

    You are asking about objective metrics. I would ask “have you ever granted a loan of any amount to anyone” or “have you ever cashed a cheque for anyone who didn’t have a balance to cover the face value of the cheque”. The reason I ask these questions is that besides objective metrics in banking there is the subjective evaluations that are part and parcel of everyday business. There is and always will be a basis of trust. And trust is earned.
    One condition of poor savers and managers of money is they don’t realize their own accountability for spending and usually have little or no understanding of how and what to do. (ask a bankrupt what got them into trouble) Wesable gives them an easy and understandable tool to do just that.
    I have heard from 3 individuals now who knew nothing about Wesabe a few days ago and began using it. One individual pointed out that he was shocked by the amount of money he spent on restaurant food. He hadn’t realized this and was now going to make a strong effort to get that spending under control. What he does with his money is really his own business but the knowledge he had acquired to make that decision was of value to him. The objective metric was based on his spending history. The others have like stories. That would point to me as some qualification for the support of Wesabe.
    If changes in any fashion were always to await supporting metrics to support credible opinions it would seem the world would be that much less. Someone likes the colour ‘green’, someone likes the colour ‘red’. Would I be so bold as to ask what the objective metric is to support their position? No. But I could ask them why and listen to the further discussion.
    As to your last question of “Is this a blog of totally unfounded positions or something more?”
    The OED defines unfounded as “Having no foundation or basis; chiefly fig., groundless, unwarranted.” Any reader would need to qualify in their own mind what this blog is. Opinions are welcome. Debating issues should be the norm. Objective metrics are a value of technique. Technique without a human dimension is just a plain algorithm.
    A key point is that this blog holds personal positions and not those of corporations or consultants. It is always interesting to view the individuals URL though not always interesting to view the person’s employer’s URL.

  9. Kennith permalink
    July 29, 2007 7:06 pm

    You actually know people who did not know they were spending lots going out to eat until they uploaded their expenditures and saw the total? I am sure that Wesabe is full of people like that…and they are supposed to help someone else better manage their money? Can we say the blind leading the blind!

    I cannot believe you actually compared your support of Wesabe to the totally subjective opinion on colors! In the end, Wesabe is a tool that either adds value managing money or is not worth the time. If you are going to advocate that financial institutions should embrace Wesabe for their consumers, you really need to step up and provide some metrics that demonstrate why they should. I don’t think they would care what your favorite color is either.

    How about Wesabe start showing some metrics that speaks to the actual value, numbers and composition of their crowd?

  10. tinfoiling permalink*
    July 30, 2007 12:00 am

    There are actually a number of people who know they spend large amounts in specific areas but have a misconception on the total dollar amount they are spending. When their NDI is tight this presents problems and pointing to areas they need to manage is much easier when they can quickly see the results. You can say the blind leading the blind. I would say that people who have common problems with spending may have some insight into possible solutions. Money management isn’t the exclusive domain of MBAs or experts.

    The comparison to colours was to point out the nature of change and that objective means are not the only means when arriving at a decision. Somewhat like you spelling color and my method of spelling colour. They both signify the same thing but in different terms.
    I fail to see what metrics has to do with a service that people can choose to use or not. They will see the value themselves or they won’t. If they don’t, they will not use it. The question to Wesabe is probably best left to Wesabe. C’est la vie, c’est la guerre.

  11. July 30, 2007 9:19 pm

    In my work as a ‘money coach’ (for want of a better title) I meet so many people of all income levels who feel frustrated and guilty about not having a handle on their money. Many people expect in-depth help from financial planners, but don’t receive it (no reflection on financial planners; they do their job of setting up investments for retirement etc., but they don’t have time nor the mandate to continually enquire ‘do you know where your dollars went this month?’). They see banks as aloof and big corporations. wow – if a credit union could give a really practical, user-friendly, real-world tool to help people feel more in control of their money, I think people would trip all over themselves to join the credit union. (Wesabe, wanna team up with me??)

  12. John permalink
    August 6, 2007 11:26 am

    It would be nice if someone from Wesabe would respond to Kennith. Their lack of response makes you wonder if they have objective data to support the hype and proclaimed value provided to their community I agree that the “crowd” must have some skills to be valuable in effectively helping others. So many of these community sites live on hype and can only hope the reality of their community will someday live up to the hype. Jason really should step up here.

  13. August 12, 2007 9:28 pm

    Apologies for the slowness in replying — I’m Jason’s co-founder at Wesabe and he asked me to reply.

    Kennith’s critique is one I’ve heard a number of times, that Wesabe is full of “the blind leading the blind” and that no one is getting value out of it. I think there are two misconceptions about our site in that critique.

    I think many people believe that paid financial advisers are the only ones who can give trusted advice about investments, retirement planning, asset allocation, and so forth, and that turning to the Wesabe community for advice on these topics would be foolish. This assumes both that no financial advisers are on Wesabe, and that people only come to Wesabe for advice on these topics.

    Both are untrue. There are several professional advisers participating on the site — for instance, David Satterwhite in this thread:

    https://www.wesabe.com/groups/17-how-to-retire/discussions/4-where-s-the-best-place-to-start-a-roth-ira

    Several advisers have told me they’re happy to participate in the site for free because it helps them generate business. That said, there’s plenty of good advice in that thread and many others, and only some of it comes from professionals.

    But retirement and asset allocation make up a small percentage of advice traded on the site. The idea behind our Tips tab is that everyone has some specialization that they might share with others, and that others might use to improve their financial lives. For instance, several of our users are generally under a lot of financial stress, but know a huge amount about cars, how and where to get them fixed, and when they need replacing. Even if these particular members would have no good advice on, say, Roth IRAs, they don’t contribute that advice — but they do contribute advice on areas where they are confident and have information to share. When other members reinforce that the advice is good, we all can benefit from it.

    The second big misconception is that Wesabe’s benefit is solely anecdotal advice between members. We’ve made it very clear — and backed it up with hard data and concrete numbers — that that is not the case. We reveal aggregate, anonymous data about the merchants where our members shop, and by doing that, we point the way to better deals and greater value for everyone — whether they are “blind,” in Kennith’s words, or not.

    One of our earliest successes on the site — well before we launched — was around auto repair shops in Berkeley, California (where the site was originally developed). Several of our members at the time were getting their BMWs repaired at the local BMW dealership. The average repair cost was about $1200, and the dealership’s Wesabe score (a rating based on member feedback) was 17 — on a scale of 1 to 100. A few of our members instead took their BMWs to an independent shop about a mile from the dealership. That shop had an average bill of about $450, and a Wesabe score of 92. Less than half the cost on average, more than five times the satisfaction. I highlighted this comparison in a tip, and we saw many members switch repair shops in the months following — and saw their satisfaction jump and their spending go down.

    That example — one of many like it — has nothing to do with “blind leading the blind” or sharing of bad advice. It has to do with making hard data about consumer experiences with merchants transparent and clear. The combination of hard data with reported results makes for a great way for consumers to get and share advice on *any* financial topic.

    You ask for numbers about our members and demographics. We have been vague about some of these numbers for competitive reasons, but we have said many times that we have tens of thousands of members uploading data to the site. Two months ago, we put out a press release saying that our members had uploaded more than half a billion (U.S.) dollars in transactions to the site:

    http://www.wesabe.com/page/press/halfbillion

    Today, that number is more than one billion dollars. While our privacy wall (see http://blog.wesabe.com/index.php/2007/02/23/safeguarding-your-data-the-privacy-wall/) and our privacy policy deliberately prevent us from associating any personally identifiable information with our users’ transactions, we do have users in over 90 countries around the world (primarily English-speaking, as we don’t yet provide versions of the site in other languages — though we do support automatic currency conversion).

    I hope this helps. You can decide for yourself whether you think our site is overhyped — but before you do, please take the time to read some of the things our users say about us:

    http://blog.wesabe.com/index.php/2007/02/16/feedback-from-happy-wesabeans/

    To me, that’s what matters.

    Marc Hedlund, Wesabe

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