3 FI Snacks: Finovate, CURIA, and Account Portability
Posted by Brent Dixon on May 6th, 2008
I apologize for the lack of love OSCU has been receiving lately. As my Twitter-friends know, I’ve been on the road and elbow deep in on-sight client work pretty much constantly for the past month.
But I miss you. I do.
Here are three things we woulda/coulda/shoulda been covering over the past couple of weeks:
1. FinovateStartup
I wish to high heaven I could have attended FinovateStartup this year. But fortunately, I was able to stay in the live-action loop thanks to fantastic coverage by the following folks:
- Brad & Mark from The Garland Group / Banktastic. Their coverage includes reviews of each and every demo and video interviews of presenters.
- Ron Shevlin’s “Notes from FinovateStartup 2008,” in which he tells it like it is.
- Jeff Stephens from Creative Brand’s insightful series of posts.
- Christophe Langlois from Visible Banking’s collection of posts and video interviews. Aside – you should add this blog to your feeds.
- Live-action commentary from the Twitter militia.
- And, of course, the belle-of-the-ball, Jim Bruene from Netbanker’s write-ups.
Congrats to Jim on another hugely successful event.
2. Joe Lieberman introduced CURIA to the Senate
Anyone who knows me knows I’m not a legally or regulatorily-inclined person. I color with crayons and markers for a living. But after doing some research I realized how significant CURIA could be for CU’s ability to impact people. To quote the Cornerstone CU blog, CURIA, which stands for the Credit Union Regulatory Improvements Act, proposes to:
- Modernize credit union capital standards to permit more efficient capital management while allowing more earnings to be returned to members in lower costs and expanded services;
- Expand the ability of credit unions to make loans to finance their members’ local small businesses; and
- Permit more credit unions to offer needed services in lower-income communities that are not adequately served by other depository institutions.
Learn more about CURIA here.
3. Account portability
When I was at the GAC, I had an awesome conversation with Robbie Wright about data portability – the idea that your data from any given online service (from your Facebook profile to your online photos to your gmail acount) belongs to you and not the service. Groups like DataPortability.org are working to make this a reality, and web services like Wesabe and Mint have applied the same concept to transactional data.
So I was excited when Colin Henderson linked to Better Banking Blog’s write-up on ‘BPAY’s top-secret MAMBO project’:
...the top-secret BPAY proposal could deliver the bank account portability that Treasurer Wayne Swan so desperately wants Australian consumers to enjoy.
Instead of a bank account number and BSB, individuals would register for their own BPAY code which could be used to facilitate payments. Consumers could then port their number from bank to bank without the need to re-establish direct debits or credits, and use it to enable online payments.
Because of your collaborative nature, I think this is more relevant to CUs than banks. The closest thing I’ve seen to this in the states, outside of general back-end consolidation work (which is great), is Filene’s ‘Once a Member Always a Member’ i3 Project. But even that is limited in scope compared to the potential of account portability.
How member-empowering, representative of your cooperative structure, and incredible for retention would this be for credit unions?
The infinate possibilities of Brent’s future:
1. Aspen Institute Fellow
2. Filine Research Institute, Director of All Things True and Smart
3. Presidential Appointee to the creation of a Cabinet: Aggregator of Goodness.
So many good things in this post…
Finovate would have been awesome to go to, but I ran off to NACUSO instead! CURIA and CURRA need to get some traction and we need to not let the bankers control our fate in Congress. As far as account portability, I obviously would love to see member account portability work exact like cell phone portability, but I just can’t see the FDIC, NCUA, and the Fed teaming up to make that happen. So that means we’ll just have to find a way to make that work. And so far we’ve come up with two ways it could potentially work. Now we just have to see if it can be done. I’d be interested to hear what others think of the concept.
I commented on Colin’s post on the Better Banking blog, but I might go a little bit further in my post here.
BPAY in australia is a payments method that allows a convenient and speedy payment of bills. On top of this, almost all bills you get these days seem to accept BPAY.
Essentially, users log onto their FI’s Internet Banking service and go to the ‘BPAY’ area. All you need is a Biller code and Reference number that is on your bill, hit ok and the funds go. Easy.
Now what the BPAY mob have done really impresses me, they have thought well and truely outside of the square.
They’ve pretty much created a situation where users can register for a reference number under some specific biller code, and use that instead of a BSB and account.
I’ve thought and thought about it, and for something like this to work in the States (or anywhere else) you are going to need to piggy back off some existing service that already has a network similar to BPAY. Can you think of anything like this that exists in the states?
Instead of getting banks or credit unions to sign on, you need create the product within existing infrastructure and provide sufficient reason for customers to vote with their feet and sign on.
I’m concerned that the only way CURIA will ever pass, in any form, is through a grassroots effort by credit unions to inform their members of its benefits.
CURIA has been around since 2003 and has failed to gain any traction in Congress. While it’s easy to blame the banking industry and their lobbyists, part of the blame should fall on the ineffectiveness of the credit union lobbyists to apply the proper amount of pressure.
I understand that CU influence is only as deep as its pockets, and they’ll never be as deep as the bank’s, but CUs have had a pretty good regulatory run over the past couple of decades.
CURIA’s likelihood of passing is currently so slim that a watered down version, CURRA, which removed several key ‘banker’ complaints, was pulled from the Congressional schedule last week.
With 2008 an election year, I’m afraid that savvy politicians understand that it isn’t in their best interest to risk alienating either their voting base or a possible contributor to their campaign, regardless of their feelings on the bill. Perhaps 2009 will be the year CURIA is finally given the vote we’ve been waiting for.
@James—I agree, for something in the states to work, it will have to piggy back off of the existing infrastructure. I think the definition of “account portability” also needs to be thought through. I always imagine that it would work just like cell phone portability, meaning your special number follows you to different providers and you select the service you wish during the move. With the BPAY example, it sounds like a clearing account is being created rather than actual moving the physical account and details over to a new provider.
@ Robbie:
With this BPAY project, you are pretty much on the ball. They assign you a couple of codes, and link it to whatever bank account (with a BSB and account) you want. I guess the beauty of it is that you can just switch the account its linked to at the drop of a hat… rather than having to change your credits and debits with each and every company or employer that you deal with.
... But I don’t think it’s so much a clearing account as just a routing point.
When you talk about a ‘special number’, are we talking some number that is completely separate to the routing number and account number that currently exists in the states?
Techcrunch just posted a brief article on the current scuffle over Data Portability. Although it addresses SNS sites specifically, it brings to light a few good points regarding how the MySpace Generation could be affected and further integrated into a brand dialogue.