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How We're Building a Better Bank: Negotiating Privacy & Utility

kacy 16y ago
Has anyone received an invite to the service yet? How do you like it?
- i2pi 16y ago
  Kacy - We aren't currently issuing invites. There has been some confusion about this, but we clarify this here http://banksimple.net/blog/2010/08/10/our-invite-process http://banksimple.net/blog/2010/08/10/our-invite-process
alecco 16y ago
> We think it's in your interest as a customer to provide us relevant > behavioral information. No, thanks. My current banks (+PayPal/CC) already know too much about me. Also, I wouldn't like to be patronized by a one-size-fits-all algorithm.
- chc 16y ago
  I think that's the point. You're already being served by a one-size-fits-all algorithm at any place that doesn't know you. Those places are guessing at how to treat you based on how other people act en masse. By learning about you, their algorithm can adapt so that it isn't generic.
  - alecco 16y ago
    > By learning about you, their algorithm can adapt so that it isn't generic. It will still be the same algorithm, for everybody. Yes, it won't offer health insurance to old people or viagra to youngsters. But it will be the same recipe. Banks and credit cards already use sophisticated generic algorithms for advertising. Just because an algorithm adapts to parameters doesn't mean it isn't generic. (In fact, most algorithms "adapt" in some way.) A cool idea instead would be giving control to the customer. Not just configuration but allowing programming of some kind. People are not stupid (no matter what your MBA course taught you.) Sure, humans have issues coordinating and large groups tend to behave at their lowest common denominator, but this isn't the case.
    - Unseelie 16y ago
      If the algorithm contains more pidgin holes, should it be judged based on the fact that it is still an algorithm, or should we actually consider whether it might be a better algorithm?
      - alecco 16y ago
        Almost every practical algorithm I know behaves differently based on input. That doesn't mean it is a different algorithm every time.
herf 16y ago
This sounds related to the accounting method businesses call "accrual" as opposed to "cash". http://www.nolo.com/legal-encyclopedia/article-29513.html http://www.nolo.com/legal-encyclopedia/article-29513.html I would also like to see one of these services predict periodic expenses properly. e.g., I pay my car insurance once every six months, and I would love to see this as an amortized expense (as if I'm "saving" monthly to pay this expense when it comes due). Mint does not do anything like this.
jrockway 16y ago
Whether in spendy behavior or overdraft fees, there's a reward in it for them. Where? Less money in your account = less money for the bank to loan out and make money from. Also, in the US anyway, overdraft is "off by default", due to new laws (and that banks realizing customers hate overdraft fees). If you spend more money than you have, the transaction is declined. If banks wanted you to spend money, they wouldn't give you fee waivers and higher interest rates when your balance goes over a certain level. (Credit cards are a whole other issue. They want you to spend up to your limit and pay the minimum every month. But loans and deposit accounts are two very different beasts.)
- deleted 16y ago
  [deleted]
- detst 16y ago
  Less money in your account = less money for the bank to loan out and make money from Not when it's in their pocket. If banks wanted you to spend money, they wouldn't give you fee waivers [...] Doesn't that just re-enforce the behavior of spending? Why worry about it when it'll be waived? [...] and higher interest rates Waiving fees and giving higher interest is out of fear of you taking your money somewhere else.
  - jrockway 16y ago
    Waiving fees and giving higher interest is out of fear of you taking your money somewhere else. Uh, exactly? When you buy useless crap from Walmart, that's bad for the bank. When you save your money, that's good for the bank. Yup, they make money off of your good habits and bad habits. Hedging. :)
alecco 16y ago
That's a false dichotomy. We don't need to run things with our private data on third party servers. There is a way out: browsers have very powerful JS engines and it is possible to do client-side processing and even store private data encrypted somewhat securely without the service provider having access. But since this concept doesn't lead to profits it is completely disregarded. There are many systems using this approach, like password managers and secure email services. It's not perfect but it's been out there for many years.
- jacquesm 16y ago
  There even was an attempt at making a digital form of cash: http://cryptome.org/jya/digicrash.htm http://cryptome.org/jya/digicrash.htm It preceded powerful browsers by a couple of years but the ideas were very similar (I believe) to what you suggest.
thinkcomp 16y ago
I'm confused. If BankSimple isn't a bank (it's not, right?), then why does it have "bank" in its name and issue statements like "how we're building a better bank?" Be a bank or be something better that isn't a bank, but you can't have your cake and eat it too.

kacy 16y ago

Has anyone received an invite to the service yet? How do you like it?

i2pi 16y ago
Kacy - We aren't currently issuing invites. There has been some confusion about this, but we clarify this here http://banksimple.net/blog/2010/08/10/our-invite-process http://banksimple.net/blog/2010/08/10/our-invite-process

> We think it's in your interest as a customer to provide us relevant > behavioral information. No, thanks. My current banks (+PayPal/CC) already know too much about me. Also, I wouldn't like to be patronized by a one-size-fits-all algorithm.

chc 16y ago
I think that's the point. You're already being served by a one-size-fits-all algorithm at any place that doesn't know you. Those places are guessing at how to treat you based on how other people act en masse. By learning about you, their algorithm can adapt so that it isn't generic.
- alecco 16y ago
  > By learning about you, their algorithm can adapt so that it isn't generic. It will still be the same algorithm, for everybody. Yes, it won't offer health insurance to old people or viagra to youngsters. But it will be the same recipe. Banks and credit cards already use sophisticated generic algorithms for advertising. Just because an algorithm adapts to parameters doesn't mean it isn't generic. (In fact, most algorithms "adapt" in some way.) A cool idea instead would be giving control to the customer. Not just configuration but allowing programming of some kind. People are not stupid (no matter what your MBA course taught you.) Sure, humans have issues coordinating and large groups tend to behave at their lowest common denominator, but this isn't the case.
  - Unseelie 16y ago
    If the algorithm contains more pidgin holes, should it be judged based on the fact that it is still an algorithm, or should we actually consider whether it might be a better algorithm?
    - alecco 16y ago
      Almost every practical algorithm I know behaves differently based on input. That doesn't mean it is a different algorithm every time.

herf 16y ago

This sounds related to the accounting method businesses call "accrual" as opposed to "cash". http://www.nolo.com/legal-encyclopedia/article-29513.html http://www.nolo.com/legal-encyclopedia/article-29513.html I would also like to see one of these services predict periodic expenses properly. e.g., I pay my car insurance once every six months, and I would love to see this as an amortized expense (as if I'm "saving" monthly to pay this expense when it comes due). Mint does not do anything like this.

jrockway 16y ago

Whether in spendy behavior or overdraft fees, there's a reward in it for them. Where? Less money in your account = less money for the bank to loan out and make money from. Also, in the US anyway, overdraft is "off by default", due to new laws (and that banks realizing customers hate overdraft fees). If you spend more money than you have, the transaction is declined. If banks wanted you to spend money, they wouldn't give you fee waivers and higher interest rates when your balance goes over a certain level. (Credit cards are a whole other issue. They want you to spend up to your limit and pay the minimum every month. But loans and deposit accounts are two very different beasts.)

deleted 16y ago
[deleted]
detst 16y ago
Less money in your account = less money for the bank to loan out and make money from Not when it's in their pocket. If banks wanted you to spend money, they wouldn't give you fee waivers [...] Doesn't that just re-enforce the behavior of spending? Why worry about it when it'll be waived? [...] and higher interest rates Waiving fees and giving higher interest is out of fear of you taking your money somewhere else.
- jrockway 16y ago
  Waiving fees and giving higher interest is out of fear of you taking your money somewhere else. Uh, exactly? When you buy useless crap from Walmart, that's bad for the bank. When you save your money, that's good for the bank. Yup, they make money off of your good habits and bad habits. Hedging. :)

alecco 16y ago

That's a false dichotomy. We don't need to run things with our private data on third party servers. There is a way out: browsers have very powerful JS engines and it is possible to do client-side processing and even store private data encrypted somewhat securely without the service provider having access. But since this concept doesn't lead to profits it is completely disregarded. There are many systems using this approach, like password managers and secure email services. It's not perfect but it's been out there for many years.

jacquesm 16y ago
There even was an attempt at making a digital form of cash: http://cryptome.org/jya/digicrash.htm http://cryptome.org/jya/digicrash.htm It preceded powerful browsers by a couple of years but the ideas were very similar (I believe) to what you suggest.

thinkcomp 16y ago

I'm confused. If BankSimple isn't a bank (it's not, right?), then why does it have "bank" in its name and issue statements like "how we're building a better bank?" Be a bank or be something better that isn't a bank, but you can't have your cake and eat it too.