The MIT Media Laboratory and Bank of America recently announced the creation of the “Center for Future Banking,” a five-year effort that will explore the impact of Web computing and social networking approaches on the way people manage their finances.

The Center will be funded by BofA to the tune of $3-$5 million annually, and is chartered to “explore new ideas in banking by inventing technologies that reveal and leverage insights across a wide range of physical and social scales, from one-on-one customer interactions to global transactions.”

Researchers will address such questions as: ‘How can every customer be empowered with the knowledge and tools to take better control of their financial futures?’ ‘How will banking interactions evolve as a customer’s physical and virtual worlds become completely intertwined?’ and ‘How will social networks and mobile platforms transform customers’ banking experiences, making it easier, more convenient, and better integrated with their daily lives?’.

The banking industry is just but one of many industries that will be rocked by the shift of empowerment and information management to end-users. The industry saw its first wave of transformation with the advent of Web computing in the mid to late 1990s. At that time, many institutions opened up online access as a new channel. Internet-only banks or subsidiaries of banks were launched. The next phase of this revolution may follow the rise of the networking effect of Web 2.0.

As Frank Moss, director of the MIT Media Lab, puts it: “We hope not only to discover the principles that will transform banking in the next decade, but also to advance our basic understanding of the rapidly changing relationship between people, technology, and society in the twenty-first century.”