A FEW dollars spent at Starbucks, a monthly mortgage payment, a Netflix fee, Starbucks again: bank-account statements are not exactly exciting stuff. But there is gold hidden in this by-product of our financial lives, or so many budding technology firms believe. A host of startups crave access to the data and are pitching services, from budgeting apps to cheaper loans, to those who open their books to them. Yet banks worry that co-operating is the first step towards losing the lucrative grip they have on their customers.
Squeezing insights out of a bank statement is hardly at the cutting edge of big data. Years of salary payments confirm stable employment; bounced cheques hint at carelessness; regular green fees suggest an interest in golf. Banks implicitly use balance and income information when making loan decisions. That has typically given them a leg up over such rivals as consumer-lending companies, which have to base offers of credit on less detailed information.
Add the fact that switching bank accounts is seen as a chore, and incumbents are in effect shielded from competition. But three things have changed in recent years. The first is...Continue reading
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