One of this year judges – Per Harald Strøm, Head of Innovation at NETS is a very innovative guy, who believes in newbees, innovative brains and freedom of creativity. In the following article he presents his version of 5 innovative ways to “rethink” finance.
RETHINKING FINANCE, IN 5 HOT TOPICS
By Per Harald Strøm
BANKS BEING PART OF THE SOLUTION OR PART OF THE PROBLEM?
The current financial crisis leaves a financial industry currently deprived of trust. This might be temporary, but for the next decade we can expect pendulum shifts, new surprises and aftermath analysis. We can expect legacy players of all types to take individual or collective actions to ensure that they are seen as part of the solution, not as part of the problem. This could create room for new players, massive regulatory change, or huge power shifts within the types of players in the current financial ecosystem.
PIGGY BACKING – OR WAS IT PIGGY BANKING?
The digital revolution and increasing deregulation of the financial markets will create more and more opportunities for aggregators, mediators, and value adding entities to extend current consumer and merchant services. The financial sector must learn to live with such players. The value adding services will fill individual market gaps, and represent both a differentiating option as partners, and a role threatening scenario as intruders.
END OF THE ‘DIGITAL BANK BRANCH’ PARADIGM
Within everyday transactional banking for the consumer, the use of bank controlled portals will become a less attractive option. This development is enabled by use of distributed trust mechanisms providing sufficient security outside of the current portals. It can be seen as the digital analogy to what has happened to the physical bank branches role for everyday transactional purposes. If played correctly, this could create opportunities for individual banks to capitalize on omnipresent, transparent and contextual services in parallel to their own portals.
FROM MONEY HANDLING TO VALUE HANDLING
Transferrable non-monetary values will become equally or more important than ‘real money’ in more and more commerce and social situations. This is driven by the possibility to handle multiple ‘currencies’ for such alternative values, and by the desire from merchants to create loyalty mechanisms driving more future business towards themselves. While this could constitute a threat to existing monetary based ecosystems, it is also an opportunity for existing players, as many of the current mechanisms will have reusability potential also for such non-monetary values.
Driven by loyalty creating mechanism, our future commerce behaviour will create a massive digital slipstream. Compared to financial providers, merchants will have ten-fold capitalizing potential. In such a world we will see small and big banks teaming up with selected merchants, as well as players moving towards a neutral third party trusted role not only between consumers and merchants, but also between merchants in a marketplace creating paradigm