The rise of social networking could have a profound effect on banking and personal finance. As companies combine massive databases of financial transactions with the “collective intelligence” of a networked customer base, interesting things can happen.
Because money and spending are topics that weigh on peoples’ minds every day, these issues are likely to become important topics at existing social networks, and/or new ones that crop up to serve the needs of the 30- and 40-year-olds rather than teens and twenty-somethings.
What if these new social networks functioned as financial co-ops, pooling their assets to negotiate favorable terms from financial providers? They’d behave much like credit unions, but without the messy details of providing actual financial services, a Virtual Credit Union of sorts. We call this version transactional personal finance networks.
What might those networks look like? This report looks at how social finance networks may evolve and how they compare to typical financial institutions today. We also have recommendations on the more pressing need: how to incorporate social finance features into your own Web-based delivery. Finally, we analyze the key startups in the space: Wesabe, Buxfer, and several others.