Portable bank account numbers

Sam Knowles, head of KiwiBank, has suggested that people have a bank account number for life.

The concept is similar to number portability in the telecommunications industry.

I think it’s a few steps short. In the early 2000’s I looked at this very issue. Bank accounts are like IP addresses. Much more useful would be a DNS-like system for bank accounts. You don’t give people your IP address, why give them your bank account number?

Simply linking your bank account number to a more public and easier to remember address, like an email address or web address, would allow you to give your deposit money on your behalf and your bank account can be anything at all.  If you change your bank account, no big deal.

As an example, Jane Smith might have a rental property.  To her tenants she could say:  “Send your rent payment  to jane@smith.com.”

In her banking portal Jane could map her email address to pay into any one of her accounts. If Jane changes her bank – no big deal. The actual bank account number she uses is private and hidden to the world.

Our public bank account could be xero.com. We know it’s globally unique, authoritative and easy for our customers remember.  Much easier than transposing numbers and we could change it between banks as required.

There are so many opportunities for innovation in banking.

9 Comments

alex
September 5, 2009 at 11:50 am

what a pity the banking industry is so slow to react to these ideas.

lubos
September 5, 2009 at 3:26 pm

and what is someone steals your domain name? :-)

Rod Drury
September 5, 2009 at 3:40 pm

Even if a domain was stolen (I don’t hear that happening much – if at all) you’d still have to map a domain to a bank account within a secure online banking session, which creates a solid audit trail.

So don’t think this suggestion is inherently more risky. You may even argue that if bank account numbers are kept private they are more secure.

It’s safe to assume that before such a scheme would be implemented by banks it would be secure and been subject to intense threat assessment.

Martin
September 5, 2009 at 7:42 pm

Rod – sounds similar to the paypal model. In base terms anyway.

M

Rod Drury
September 5, 2009 at 8:05 pm

Yes exactly. Paypal of course provides another useful abstraction, allowing people that are not credit card merchants to receive a credit card payment.

So financial intermediaries are providing these more advanced abstraction services showing the demand – and the opportunity for banks to innovate further.

John Birse
September 6, 2009 at 2:58 pm

Along similar lines is an initiative of the Australian Treasury with the Standard Business Reporting Program http://www.sbr.gov.au/content/standard_business_reporting_program.htm where individuals willhave a single “Credential” that will give them access to multiple Governement services (such as issuing a Tax File Number)in real time. Imagine this for our banking system which is currently bogged down with issues such as third party cheques and the need to name your account with your company, trust and trading name details (and ABN!). Similar reforms as SBRneed to be applied to banking which impacts our business lives DAILY.

Omar Kassim
September 7, 2009 at 12:07 am

Talking about banking, check out Matt’s post on Starting a Bank http://ma.tt/2009/08/starting-a-bank/. You’re absolutely right Rod, there are definitely a heap of opportunities out there to innovate in the banking space.

Blair Hughson
September 7, 2009 at 10:36 pm

I think it’ll be a while before banks come on board with something like this – I’d love to see internet transfers happen immediately instead of overnight.. would definitely speed a lot of things up.

Richard
January 5, 2010 at 9:55 am

This has a lot to do with online identity or so-called “Identity 2.0″. Check out OpenID or watch Dick Hardt’s very cool presentation at identity20.com.

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