Making moving your money easy

The move your money campaign has got a lot of visibility recently. Although the actual benefits of moving your money can be discussed, it seems pretty clear that it can’t be bad either for community banks and credit unions, since it will effectively do the job of breaking the big banks that the government seems unable to do.

Whether you agree or not with the impact of moving your money to smaller financial institutions, you will certainly agree that doing so is difficult.

If we put aside the transfer of loans, and focus on deposits, in particular checking, one hurdle is the fact that you may have given out your bank account number to a number of third parties for direct debit of various subscriptions: card insurance, health insurance, mortgage, etc.

How then can we make moving your money (almost) a one-click operation?

It seems to me that virtual bank account numbers may be an appropriate solution. A bank institution would issue virtual bank account numbers that you would configure to forward debit/deposit requests to a real bank account number. When you want to move your money, you would open a new bank checking account, transfer you funds to this new account, then re-map the virtual bank account # to the new account.

Such a virtual bank account scheme may also be used for managing relationships and preventing unauthorized access to your funds: you may be issued as many virtual bank account numbers as you wish and use each of them for each service provider who you want to automatically debit you. This way, you may decide to turn off a virtual account if you fail to stop the relationship with the provider in other ways.

A service provider providing virtual bank accounts could provide a centralized view of the automatic debit/deposit that you have agreed to, in VRM fashion.