Buy My Place in the Herald Sun
FOR far too long the only innovation in banking has been new and improved sneaky fees but new technology is turning the tide back in favour of savvy consumers.
So let's take a sneak peak at the latest financial innovations that will to rock your financial world in 2009.
Sell your house online and save thousands
Real estate agents have been given notice with the launch of buymyplace.com, a site that helps consumers deal direct, using the motto "sell it yourself and save".
Agents would no doubt protest that the process of negotiating the sale of your biggest asset is one best left to the professionals but really, how hard is it to stand out the front of a house with a clipboard and not return calls?
In the current market of tumbling property prices, the lure of saving yourself $14,000 in commissions (for an average home) could go a long way to smoothing over any `softness' in your selling price.
Selling a home isn't that complicated. It really only takes two basic things: a sign out the front to capture drive-bys (and neighbourhood gossip), and an internet listing.
For $199, buymyplace.com will send you a `For Sale' board, provide you with live Residex property value data so you can accurately price your pad, and list your home (complete with a buyers' blog) on its website.
CEO Peter Butterss has research suggesting that within two years between 5 and 10 per cent of people will sell direct (which equates to approximately 50,000 to 100,000 homes a year).
He may be on to something. You only have to look at what occurred when discount online share broking was introduced to see how eagerly consumers embrace technology (and dirt cheap commissions). Internet brokers now account for one in every four transactions on the market.
Auction off your mortgage
Ian Thorpe wants you to get a better deal on your home loan. That's why the men's underwear and jewellery designer has turned his attention to a mortgage site called ziggybid.com, which matches borrowers with lenders.
The site works like eBay: once a potential borrower registers on the site, lenders bid in a live auction for the opportunity to lend them money, with the winning institution being the one that offers the cheapest deal.
There are plenty of these sites springing up (like bidmyloan.com.au) and many more in the pipeline. Yet the Thorpedo is merely a messenger for a revolution that won't be televised; technology will continue to find new ways to cut out the middlemen (like mortgage brokers) from transactions and in the process save smart customers thousands of dollars over the life of their loans.
Social lending will soon let you bypass the banks
Social lending is not when your mate borrows twenty bucks off you at the pub, but an online marketplace where people can bypass the banks. Savers can get a return on their money, and borrowers can get a loan.
A few short years ago, people would scoff at the suggestion of lending money to strangers over the internet. That's the job of professional bankers who employ the best and brightest brains to ensure that they uphold the strictest lending criteria. While there are only a handful of start-up social lenders in Australia, they're gaining traction overseas, especially as technology advances the ability for people to vet borrowers via credit checks.
Last year the Beard and Teeth made a big splash when his Virgin group bought US-based social lender Circlelending, which has so far facilitated $300 million in loans, using the catchy title `Go Fund Yourself'.
Internet banking on steroids
Last month ANZ quietly ushered in a new service that may eventually turn the banking industry on its head.
Money Manager (anzmoneymanager.com.au) is a free web-based platform that allows users to upload all their financial information from different institutions (direct feeds from their bank accounts, mortgage, insurance, superannuation, investments, rewards points, etc) to the one place. And you don't even need to be an ANZ customer to use the service.
All your spending thereafter is automatically recorded and categorised so you can produce pretty pie charts of how much you spent last year on pies. The service will also alert you to when your credit card is due, and give you a snapshot of your overall financial position.
It works a bit like Quicken and other such budgeting products already do, though this is automated. But if you ask me, these products are built for geeks so they can track how much money they saved by spending their Saturday nights entering their receipts into a spreadsheet. What would really have Barefoot running to Money Manager is if it send messages like this:
`Scott, your records indicate that with your current ANZ everyday account you've paid $27 in the past month in foreign ATM charges. We've analysed every offer currently in the market and suggest that you click here to set up a Citibank Plus account that offers unlimited withdrawals from any ATM. Over the course of a year this represents a saving of $324, which can be put towards your stated goal of "getting drunk with your mates at the football".'
I won't be holding my breath.
However, in the US, sites like Mint.com do exactly this and with 600,000 users since launching last year, the worry for banks is that the customer relationship will reside with the platform rather than the financial institution. The banks argue that these services are unlikely to affect them. Perhaps they think we'll stay loyal for the compelling customer service we receive.
These financial innovations aren't just for younger tech-savvy consumers Australia leads the world in the take-up of online banking.
The hope is that constantly improving technology can do for consumers what governments have failed to do create compelling competition in the billion dollar banking industry.
Tread your own path!
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