In the US, there’s a bank that is starting to make waves and it may actually even be sexy. It’s hard to think that would even be possible but when you check this place out you may rethink just what a bank means to you.
If we could start again, what would a bank really do.
Would it even be a bank or is the bank itself just a means to an end?
Do they really do anything that special any more?
Sure they are a place to keep your money safe (unless you are in Athens), give you a return (Yay 3%) and lend you money at a pretty cheap rate when you need it.
But what else does a bank need to do for you?
Fundamentally, a bank tracks your day to day spending and in what can only be considered a boring and horrible way. It’s line after line of debits and credits. I still don’t even know if I spend money is it a debit or credit or why it evens matters to me?
Technology is creating more transactions and the more lines there are, the harder it is to read. The harder it is to read, the less you know about what you actually spend money on. I guess however that's what a consumer society wants you to know and to continue to do. Banks want you to spend and borrow money. It’s what keeps the profits coming in year in, year out.
But what would happen if it was redesigned to help the very person who’s money it is.
What if heaven forbid we said goodbye to the old debit and credit and hello to buckets for spending and pots for goals.
Maybe it should track your money going upwards in the pots or downwards in the buckets. Not in one line on a screen but in a one screen showing all your pots and buckets.
Maybe every time you spent it automatically took it from cash and put an amount in the bucket that was associated with your expenditure.
What if whenever you wanted to know how you are tracking towards your end of year holiday, you could click on the app and see that you only have $1,000 to go.
It's simple to see that things can change and in a much better way.
But what if we wanted to move past the day to day expenditure and get a little more sexy.
Shouldn't your bank show all your assets in real time in a simple, clean and minimal way regardless of where or what they are.
It could have the value of your home automatically updated based on recent sales in your area. Your car depreciating based on recent car sales. Your loans showing not just $1mil owing, but $1mil owing and $20,000 ahead of where you wanted to be at this point in the year. Your superannuation moving up and down with the markets but importantly showing you where you need to be based on your dreams of retiring one day.
You see this is all very possible with technology.
Will we even call a bank a bank in the future or will we have a platform to do everything we need.
Surely however, the software can be smart enough so you never really had to speak to anyone and if you did a friendly assistant can help you via video conferencing.
Why do we pay by card anymore?
Wouldn’t payments at shops, online and basically anywhere be very easy and all via your mobile or smart watch. Lets just cut up all those cards and throw your wallet in the bin. Why do we still have to carry the thing around everywhere we go and hold on to the coffee cards so we can get that one free coffee in two weeks time.
Lets push this out further, what else would a bank do?
Maybe you would be able to borrow and lend to other people just like you at better rates. Swap those billions of bank profits and $50million CEO salaries to a nice little kicker on your savings or an interest reduction on your borrowings.
Maybe it could tag all your tax deductible expenses automatically each year and save receipts in a file. Allowing for an easy tax return come year end with the click of a button or two.
Maybe we say see you later to transferring by bsb and account numbers. Surely it should be just as simple as friend requesting someone on Facebook or LinkedIN.
Maybe when life changes and you want to begin to think through your next move. Why can’t you click a button to email the best local real estate agent for a valuation on your home, or dial your independent financial planner for some advice around your current strategic plan.
These are just some ideas of what is a worldwide revolution of personal finance management.
If you don’t believe me it’s already here. Yes it’s patchy but what isn’t at first.
Like anything, if it’s valuable, it survives. I cannot stress enough, just how valuable i believe this will be in changing the way you live your life financially.
From what I know, no one has nailed everything and probably never will. But all I have spoken about and much much more is here already in some form as you can see below.
A new way of banking - www.simple.com - An amazing clean banking option that allows you to automatically track your spending and set goals.
One portal for everything - www.myprosperity.com.au - A tool I use with clients to have all their assets, debts, spending and policies in one place and in real time. We can track tax expenses, upload important documents and partner with other professionals all at the click of a button.
Phone Banking - https://www.commbank.com.au/personal/online-banking/commbank-app/tap-and-pay.html- Commbank have a tap and pay with your mobile phone. I’m sure others do too.
Peer to Peer lending - https://www.lendingclub.com/ Lending club have nearly exchanged $10 billion dollars now. Moving profits from banks to individuals. There are many of these all around the world now.
Hopefully that’s enough to get your brain ticking.
The future is bright if you can see the light.