STARTUP TO WATCH Comparing Bank Offers So You Don’t Have To

Mukesh Chatter is no stranger to startups. In 1997, he founded Nexabit Networks, a high-speed switch and router maker he sold to Lucent Technologies. He later founded Axiowave Networks.

His latest, project,, however, is different, in part because of the inspiration that got it started. After buying a new home, Chatter set out to buy new high-definition televisions for three of the rooms.

His frustration over his inability to effectively comparison shop, and the support of like-minded backers, gave rise to the auction and pricing engine that underlies neoSaej and its first Web company,

Preset Terms

MoneyAisle, which goes live on Monday, is aimed at allowing consumers to comparison shop for bank deposit and loan offers by posting what they’re looking for to the Web site. In the background, scores of banks across the country will compete in a real-time auction for the right to service that customer.

Making it possible is the seller automated engine, which enables those banks to preset the terms they are willing to offer and then set that information into competition with other banks. The reverse eBay approach is similar to the competition marketplaces that have evolved for home loans and insurance, with one difference, according to Chatter.

“With BankRate or LendingTree, they pick and choose who they think are right for you and it may not necessarily be the best rate,” Chatter, who serves as president and CEO of MoneyAisle, told the E-Commerce Times. “There is the influence of advertisers in those situations, and not necessarily active competition among the banks. That’s fine for the advertisers, but what about the people who aren’t advertising? As consumers, the burden is on us to find the non-advertisers, and that can be difficult if not impossible.”

Different Model

MoneyAisle uses a different business model than those competitors and will not rely on advertising for revenue, Chatter said, instead taking a fee when a bank completes a transaction.

The site will launch with more than 100 banks bidding behind the scenes on two savings products: certificates of deposit (CDs) and high-yield savings accounts. Users enter the amount they want to deposit — and the term for CDs — and get the best rate returned within minutes. Behind the scenes, the neoSaej engine, for which the firm has applied for patents, conducts multiple rounds of bidding among interested banks.

The approach could help level the playing field for small banks, who cannot afford to invest in the keyword and pay-per-click advertising required to get noticed on the Web. “A number of state banking associations have supported us because it’s a way for the small- and midsized banks to expand their market,” Chatter said. Many banks are eager to expand the amount they have under deposit, he noted. “It’s a no-risk situation for them because they only pay if there’s a successful transaction.”

Many small community banks see MoneyAisle as a chance to expand their markets in a way that is otherwise not possible due to cost and geographic constraints.

MoneyAisle will add lending products next, and the engine is set up to be able to handle other types of commodities as well, Chatter noted.

Market, Places

Many such marketplaces meant to increase the efficiency of the consumer-vendor interaction have been formed since the early days of the Web, noted Forrester Research analyst Sucharita Mulpuru.

In the end, their success depends on the effectiveness of the technology, the ease-of-use of the interface and the ability of the site to attract a critical mass of both buyers and sellers, she told the E-Commerce Times.

“The reason eBay works on the consumer side is that enough buyers and sellers are there so that people can find what they want at the price they’re willing to pay,” Mulpuru said. “Having enough consumers will attract the sellers, and having more sellers clearly benefits the buyers.”

To that end, Chatter has begun blogging about his project and hopes to drive traffic to the site with social networking, media attention and other techniques in the early days.

“There’s a huge amount of passion here,” said Chatter, whose firm was founded in 2006 and grew to 48 employees while operating in stealth mode. “We’ve got a team of people who want to change the marketplace, who really want to make this benefit for the consumer. There’s a passion that goes beyond making a business success.”

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