What is the future of finance?
Posted on June 20, 2007 by Richard Beddard
Filed Under Ramblings |
“With all these profound changes - the Google-isation of the world’s information, the creation of on-line social networks bigger than whole populations, the ability of new technology to harness the wisdom of crowds and the rise of user-generated content - we are seeing the democratisation of the means of production, distribution and exchange. This new democracy is a good thing. It is challenging our existing sources of authority, in the media and in politics, and so it should. People are no longer prepared to sit and be spoon fed. They are taking matters into their own hands. They are the masters now.”
To propose the Google-isation of finance:
And now new businesses are opening that auction customer leads to the institutions, turning the whole customer acquisition model on its head. Imagine if a Moneysupermarket did this for all business? Imagine if Google did this? Banks would quickly be relegated to commodity plays – to simply being the factories for money transactions. Their large profits and sector dominance would disappear as quickly as the major record labels’.
Now that’s a compelling thought. That financial institutions might in years to come, sweat like publishers are sweating now.
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2 Responses to “What is the future of finance?”
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i’m not sure i understand the second bit — why exactly would banks just be factories for money transactions? and isn’t that what they are now basically anyway — you deposit £1 with a retail bank and they lend it out 10 times to others and allow companies or individuals via their houses to create worth whilst charging interest? how would this model change? or have i misunderstood what banks actually do? hmmm i think i ‘m missing something.
Hi Giles, thanks for your comment. I guess James Alexander is talking about who ‘owns’ the customer. But what attracted me to the quote was the notion that the Internet, which we take for granted now, has totally disrupted publishing businesses and retailers, say. But in finance it’s not had such a big impact. Yes you can trade online and so on, it’s cheaper, it’s more convenient. But it’s the same old business under the skin. Actually, that’s just a feeling I have. Maybe the seeds of more fundamental change are already there. What the quote really made me think was I need to think more about the future of finance!