PEOPLE are becoming increasingly empowered in their interactions with companies. But this is only the beginning. Soon, people will be using the assets of their reputations to make all their dealings with businesses easier. And banks are well placed to be the custodians of this data.
For example, buying a car is currently a headache. You have to consult many websites, visit garages, and spend considerable time comparing the offers. Then you will spend energy and nerves negotiating, dealing with insurance, and so on. It can be more trouble than it is worth.
But in the new digital economy, if you have a good online reputation, and if your willingness to buy a car is certified (possibly by a bank), then you will simply have to state the type of car you want to buy and vendors will propose their best offers to you. Doc Searls, a long-time advocate of the open source movement, and author of the Cluetrain Manifesto and The Intention Economy, has dubbed this vendor relationship management. It provides customers with independence from vendors, alongside a better means for engaging with them.
You will soon be able to put a value on your data, such as your reputation on eBay, or your purchase history on Amazon; or even your credit card numbers, phone numbers, health records or logs of your bank account transactions.
Today, these various assets are locked away in digital silos, with individuals having very little control over how they are managed, where they are stored and who accesses them. Your eBay reputation is only useful as long as you’re buying on eBay.com.
A handful of companies, such as Google and Facebook, are reaping most of the profits from collecting, aggregating, analysing and monetising personal data. Consumers have no control and little knowledge of what is being done with their data.
It is envisioned that a new digital trust framework will be built on a peer-to-peer vouching system. It will be like the reputation system on eBay but open and operational between all applications on the grid. One such framework is being experimented today on Connect.me, a Silicon Valley start-up which lets you build your reputation. You can use it to vouch for the people, content and businesses you trust across Facebook, Twitter, LinkedIn, and other providers.
Empowered users should be able to monetise their own digital assets: to financial institutions who manage the assets and to vendors who have visibility to more business opportunities.
The financial industry could have a role to play in this new currency. The role of trust in the digital economy needs special attention, as it can’t be replicated from the today’s “bricks and mortar” framework – based on “know your customer” processes. As we currently trust financial institutions to look after our money, the financial industry has an opportunity to look after these more intangible (but no less valuable) assets.
Kosta Peric is co-founder of Innotribe and head of innovation at the Society for Worldwide Interbank Financial Telecommunication (SWIFT).