I read a great post by the Tim O’Reilly a while back about how banks could do much more good with the data they have on us by harnessing our collective intelligence Web 2.0 style. I remember thinking at the time that the banks would never do this because they are inherently complacent and usually too slow to do anything that remotely resembles innovation. It also occurred to me that if the banks continued to be this way, they could well live to regret it.

Today I read another post on O’Reilly Radar by Marc Hedlund, about Wesabe - a web application/service that enables you to extract your transaction data from any bank account (you own) in any country of the world. You can then do useful things like get tips on where to shop for less, e.g. find out where other people bought the same things as you did for less. You can also set financial goals for yourself and get tips on achieving them.

Wesabe lets you add tags to your transactions, so you can mark the grocery store transaction as having included cereal, milk, wine etc. Imagine how powerful it would be though if retailers or the grocery store could integrate with Wesabe such that you could link a transaction to the actual items you bought and in what quantities.

If the likes of Prosper and Wesabe do not make the banks sit up then I doubt anything ever will - not before it is too late anyway.

To learn more about Wesabe, check out this 3-minute demo.

Update: I have just seen that Mashable has a post on a similar app called Geezeo.