Here is a great quote from Facebook CEO Mark Zuckerberg in his letter to investors in the recent IPO filing that sums up their approach to product development:

“We have found that products that are “social by design” tend to be more engaging than their traditional counterparts, and we look forward to seeing more of the world’s products move in this direction.”  Facebook CEO Mark Zuckerberg - February 1, 2012

For our team, this is a critical concept in understanding how to build technology products for the future of personal finance. 

Collaboration, Another Word for Social

Personal finance is a naturally social and collaborative task.  We complete financial chores with the help of others.  However, it is not an entirely “open” task that you share with just anyone.  Individuals are not about to post their checking account balances to Facebook and ask random friends from High School that they have not seen in 10 years what to do about debt or retirement planning.  However, personal finance is still a collaborative chore meaning a chore that consumers complete with the help and support of immediate family members, their spouse as well as any number of trusted financial professionals.

There are well over 1 million personal finance professionals in the US serving tens of millions of consumers every year generating somewhere north of $50 billion in revenue.  Personal finance is a complex, daunting, nerve racking chore for most individuals and families.  Further, many of them are not very good at it on their own.  The existing army of professionals in the US serving this need is only expected to get bigger in the coming years. 

The lesson Facebook teaches us is that consumers are more and more willing to use technology to communicate, share and collaborate on projects.  Mark Zuckerberg has proven his belief that products “social by design” will be more successful.  Many of the same social elements used in technology at Facebook can be applied to financial services.

The Future of Personal Finance Technology

Again, personal finance is a naturally collaborative chore.  Even more, professional financial services rely on collaboration.  If you are a financial advisor or CPA, you must interact and engage with your client to deliver services.  You have to get to know your clients, collect information, stay informed of changes to their life and find ways to stay relevant in an ever changing world. 

In the future, look for tools and solutions that use technology to help make the naturally engaging & collaborative process of professional financial services more efficient and rewarding.  The most powerful technology being developed today makes the natural interaction and communication between humans more transparent, more efficient and more frequent. 

Examples of how finance is becoming more collaborative are beginning to pop up as well.  H&R Block, a company that built a $4.4 billion dollar a year business through thousands of retail stores and tens of thousands of tax professionals sitting down with consumers to prepare tax returns.  This year, they have a new service called Block Live that combines simple online tax prep software with a real person.  Nothing revolutionary from a technology stand point but a radical departure from the traditional business model H&R Block has had before.

The internet has gone through several periods of growth.  First there was the simple access to information, then companies such as Google helped us makes sense of the data and now we are definitively seeing a new phase.  This new phase is exemplified by Facebook and the idea of making the internet more social.  People crave information and we are a naturally social group.   

At Balance Financial, we build personal finance tools for financial professionals that are based on supporting collaboration and engagement.  We feel that personal financial chores and in particular professional financial services are more valuable, deliver better results for consumers, are more efficient and ultimately can be more impactful to a broader group of individuals & families. 

With Facebook and their IPO as a defining moment, the future of software development, at least for our team, looks very engaging. 

Devin