Reverse money auction site MoneyAisle says it has facilitated the deposit of more than US$1 million with its network of 72 banks in its first week of operations.
MoneyAisle provides an online auction marketplace that sees banks bid for customers that wish to deposit funds. The bank that offers the highest interest rate at the end of the auction gains the customer.
The service does for deposits what Lending Tree has been doing for mortgages since 1998. Both groups essentially operate a lead-generation business. Banks pay for the leads generated by each website in the hope that the cost for a lead generated via MoneyAisle works out to be less than the cost of a lead generated through other forms of advertising.
MoneyAisle even goes so far as to argue that in the current wafer thin margin environment, the money banks are spending on advertising deposits is making customers unprofitable.
MoneyAisle has deliberately gone after smaller financial institutions which find it even tougher to compete for deposits with traditional (and expensive) online and offline advertising campaigns.
It’s easy for MoneyAisle to argue that its “success-based” method is more effective than traditional cost-per-click advertising given banks only pay a fee for an already converted customer with a stated amount of money to invest.
With banks in Australia also sacrificing margins as they seek to raise deposits I’d be expecting to see more lead generating portals here in the not-too-distant future.
The UK has Money Supermarket, and we’ve also seen mortgage lead generator Help Me Choose launch in Australia earlier this year.
Another one to watch is Mozo, which is preparing to launch later this year.
Wednesday, June 18, 2008
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4 comments:
Looks like a great concept where the technology can have many applications. Watch out E-Bay! I tried the site for a 12 month CD and I actually got a rate that was equal to Bankrate. I'm very impressed that a startup can compete so quickly with the big boys.
You're leaving out ratecity and infochoice - both fairly well established here already.
Hi Charis,
As someone who work on MoneyAisle, thanks for the kind words about our site!
I did want to clear one matter up, however: MoneyAisle doesn't charge banks for leads. Our fees are success-based: banks only pay a small fee after a customer has been successfully acquired through our system. It's this cost-efficiency that has made us so attractive to the banks who have joined our network.
If you have any questions, we've got a blog set up at www.moneyaisleblog.com.
Thanks again for your interest in the site!
Kevin Cafferty
Senior Web Producer, neoSaej
Thanks Ed,
We're familiar with Ratecity and Infochoice but neither seem to have succeeded at matching consumers with products based on needs/requirements/money to invest. They have focused much more on comparisons which leaves the customer to wade through the hundreds of products on offer.
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