Banks have fallen behind in the online banking experience

I took note of something today that warrants the attention of bank customers and bank professionals. The 2008 Webby Awards (webbyawards.com) nominees have been released and in the category of Banking/Bill Payment not one nominee is an actual bank. This points out an important fact - banks are not giving their customers what they want when it comes to online banking.

Past nominees and winners in this category include some heavy hitters in the banking industry - Etrade, BofA, Chase, and ING. This years nominees include 2 social lending sites (zopa.com and lendingclub.com) and 3 account aggregation and personal money management sites (mint.com wesabe.com quickenonline.com) and not one bank or credit union. Personally, I am a member at 4 of these sites.

What makes these sites so special?

Zopa and Lending Club match up borrowers and lenders directly to cut out the "middle man" aka banks. (although Zopa USA still uses a credit union as a middle man). By matching up borrowers and lenders directly each side is offered a better rate then a typical bank can offer.

Mint, Wesabe, and Quicken allow you to view all your accounts from your different financial institutions all at one site. This means our customers don't even have to go to the bank website to view their accounts anymore. They also offer very nice personal money management tools and translate confusing bank transaction descriptions into plain English.

One of the site taglines is "Impress your friends, annoy bankers." ( Zopa)

What to take from this?

Financial institutions have more competitors than just other financial institutions and those competitors are the ones paving the way to a better online banking experience for our customers.