Financial Industry Meltdown Means Prime Time For New Competitors

Amidst headlines of yet another multi-billion-dollar bank bailout, non-bank competitors appear to be swarming at the proverbial bank-vault door. Consumers now have more choices and new ways to obtain and manage their money, presenting a challenge to banks at a time when financial institutions can ill-afford to lose customers, deposits and fee income.

But recent innovations indicate customers could be swayed by new online alternatives for financial advice, financial account management, credit cards, online payments, mortgages, financial planning, peer-to-per loans and more.

A recent industry conference, Finovate 2008, provides a glimpse of just how rapidly things are changing in the financial services arena. As reviewed by Blogger and Maritz executive Thad Peterson, there are all sorts of new and innovative ways to:

-Manage money with all-in-one access: Mint, Quicken Online, Thrive and Wesabe.

-Bank online: the MyMoney app for Facebook.

-Compare rates on credit cards:  FiLife, BillShrink, or RateSurfer.

-Get home loans: SmartHippo

-Invest: WeSee

-Seek advice: Boulevard R

-Analyze financial position: Inner8

-Have banks compete for CD rates: MoneyAisle

-Seek peer-to-peer loans: LendingClub or Loanio

At a time when banks and financial services firms are fighting for trust, respect and even survival in some cases, new non-bank competitors are offering consumers new and different ways of obtaining and managing money. Bottom line? These new virtual players and online communities are certain to shake up the familiar bank mantra of “trusted, expert advice” and “friendly hometown service.”