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Lots of excitement around the launch of #AccountAggregator and rightly so! Paradigm shift which gives the power of their own data back to the users. Have been thinking about how will value be created and captured in this new era. A thread 👇 (1/10)
Doesn’t seem like an #AccountAggregator itself will be able to capture a lot of value because it is not allowed to read or store the data it is collecting. It’s just a pipe, a utility. A secure one sure, and it will be paid a fees for that service. (2/10)
Large financial institutions of today will actually lose value. “Proprietary access” to user data was their moat which will now be open to all, upon user’s consent. Keen to see how eagerly they support this shift 🧐 (3/10)
Third party apps will benefit as the time, cost and friction goes down dramatically for them. Chances of fraud also go down. Personal finance management, lenders, insurers and “neo-banks” will be keen to hop on soon (4/10)
However, will they really be able to capture a lot of value? Remember that data is no more the moat and all of their competitors will also offer the same frictionless experience. Two things can set them apart here imo: 1) Proprietary algorithms, 2) Robust distribution (5/10)
Data will be a commodity but how you interpret and process it wont be. E.g., Top fintech lenders today process the same widely used bank statement and credit report differently to unearth unique insights. That will continue to be an advantage. (6/10)
Distribution will by far be the biggest advantage though. How do you get to scale cheapest and fastest? Product led virality or cross sell to a large existing base? Curious to see how the incumbent vs new entrant dynamic plays here (7/10)
Also, will there be a new set of 3rd party apps / startups which were just not possible before this shift (even in a “frictionful” way)? Or will it just make the current apps better? Something I am thinking more about. (8/10)
Anyway, coming back to the last stakeholder who will by far capture most value - the user. More variety to choose from, providers fighting over you with better UX / lower costs and super easy to switch if you dont like your current one. User will finally be the king! (9/10)
Happy to brainstorm more and ideate with others who are working in this area. DMs are open. (10/10)
