Response to NetBanker

In the short time MoneyAisle has been out in the world, we have been getting tremendous support from the media, industry influencers, and friends.

Jim Breune, of NetBanker, wrote a great piece on his blog - even going so far as to include screen-shots of the site. In his post, Jim did have a few questions about the future of MoneyAisle and some of the potential obstacles we may face. Since one of the purposes of this blog is to engage in a dialogue with the wider Internet community, I thought this would be a good place to answer the questions raised by Jim.

1. How to convince users that it's in their best interest to take the rate offered at the end of the auction?

I would hope that the consumer, after running a MoneyAisle auction, would be satisfied with the winning rate offered and would then take the steps to open an account. Jim's concern is that some of our participating banks don't have a "name" for themselves outside of their local area. My response to his concern is that the situation he describes is to the consumer's benefit: as smaller and mid-sized banks look to grow their business outside of their local region, they are inclined to offer higher rates. Also, all participating banks are Members FDIC, so a consumer's account is insured up to $100,000 by the government.

2. How to make the auctions feel "real"?

At the outset, since our auctions only have one variable (interest rate), our thinking is that showing only the winner keeps it fair to all of the participating banks. Were we to show three to five names, there is a possibility that other banks who advertise and have an established brand would benefit from it, thereby discouraging the other banks from being more competitive. Having said that, using our "Advanced Options" allows you to exclude up to three banks per auction. This is a help to consumers who already have $100,000 in a bank and need another bank to open their next account in to be eligible for FDIC protection. As feedback continues to come in, however, we are experimenting with ways to make MoneyAisle auctions the best user experience possible.

3. How to keep one bank from dominating the bidding?

Our platform is completely seller-neutral - large banks have no advantage over smaller community banks. By providing this level playing field, the idea is that everyone will be able to compete at the same level. Because MoneyAisle doesn't accept advertising there is no way to influence the process outside of offering great rates to consumers. If one bank dominates the bidding for a short time it is my belief that other banks will adjust their rates to become more competitive. One of MoneyAisle's goals is to make the free market work for both consumers and banks.

4. How do you compete with the offers available via Google AdWords, another type of auction?

As I mentioned in this post, online CPC advertising rates are very high, especially when you factor in conversion rates. Since our model is success-based - banks only pay us a small fee after they've acquired a new customer - our participating banks won't have to factor in the high cost of advertising when acquiring customers through MoneyAisle. If you take out that added cost, the savings can be passed on to consumers in the form of better rates!

I'd like to thank Jim for taking the time to look at our site in detail and for posting his honest thoughts and questions, thereby giving me the chance to dive deeper into our product and relay the ideas behind it on a more personal level.