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web 3.0, the 2010s and an internet of markets

Now we move onto the third-generation internet, web 3.0.  What is web 3.0?  It’s not been well defined or described.  Many would say it’s the internet of things, but I disagree.  The internet of things is emerging, but it cannot exist until a bridge between the mobile social network and the internet of things has a strong underlying architecture for device-to-device commerce.

I call that the internet of value, and is covered in depth in my last book, ValueWeb.   So, I’m not going to do a deep dive into the internet of value here.  However, the internet of value discussion went along the lines of building an underlying real-time and near-free value exchange structure based upon mobile internet and shared ledgers.  I’ve changed my mind about that since, in terms of how it’s positioned in web 3.0 as yes, you need an internet of value for the internet of things but no, web 3.0 is not about just the internet of value.

The technologies discussed in ValueWeb are important, and included my initial outline of the new business model of the bank based upon front office apps linking through middle office APIs that are fed non-stop by intelligence from back office analytics engines using artificial intelligence and deep learning,

Again, I’ve blogged more recently about open banking and open marketplaces.  This is based upon apps, APIs and analytics, with banks having the opportunity to be better positioned to be the digital platform that allows open marketplaces to operate using these technologies.

Banks have the opportunity to be the digital platforms that run the marketplaces, but only if they open up.   Again, these are themes I’m regularly exploring on the blog, so I don’t want to overdo it here but, generally speaking, I think web 3.0 is the internet of marketplaces, connecting those who need things with those who have things.

It’s the internet of taxi firms that own no taxis, hotel chains that have no rooms and media companies who produce no content.  The taxis, rooms and content are created by those who play in your marketplace as you have become their preffered digital platform.  It is the people who need rides connecting to the taxi drivers registered on Uber; it is the people who need accommodation connecting to the people offering rooms through Airbnb; and it is the individuals creating and sharing content on social media through Facebook and more.

These marketplaces are the digital platforms for the sharing economy and many of us have struggled to find a good banking example.  We have struggled because there isn’t one, yet.  Maybe the nearest you get to a digital platform supporting a marketplace is Ant Financial.

But this is because banks that have traditionally been closed and proprietary are struggling with opening up to become collaborative.  But they are getting there and a wave of new start-ups are driving them there too.  I’ve mentioned the names before, so I’m not going to again, but these companies are creating the Banking-as-a-Service (BaaS) structures that I blogged about back in 2009.

The idea of BaaS is that, like SaaS and other cloud structures, people can pull together the bank of their choice from a marketplace through apps, APIs and analytics engines.

Now, is your average Joe or Mary going to do this?  Probably not, which is the real opportunity here for the collaborative open bank.   After all, the collaborative open bank recognises that it controls nothing, can only build some decent functionality and needs lots of other players to play on their platform if they are going to be able to offer choice to their customers.  So, an open bank offers their customers this choice but also offers to aggregate such services on the customers’ behalf.  After all, when faced with 1,000 different P2P services, which one do I choose?  Why choose at all?   Let the open bank do it for you.

That’s the beauty of a marketplace.  Do you choose the Facebook content you read or the Uber taxi driver you want, or let Airbnb Facebook or Uber do if for you?  It depends how much time and interest you have.  Same with banking.

Banks are creating an internet of value through web 3.0, but they are doing this because web 3.0 is the generation of open marketplaces based upon apps, APIs and analytics.  This has allowed the Fintech revolution, which has forced the banks to follow. This is also a new development in my own thinking, as I continually return to my business model chart.

The chart shows the bank with a back-office manufacturing products and services; a middle office processing transactions and payments; and a front office retailing intimacy and experiences.


My assertion is that in the old, industrial era bank, all of this front, middle and back office structure was proprietary and internalised and has to now move to open and externalised.  This is because smart devices are where the relationships are developed in the front office; plug-and-play software across the operations allow anyone to offer code through APIs to improve the middle office link between front and back office; and those APIs and apps are fed through data leverage based upon machine learning and artificial intelligence through the cloud.


As a result, the back office is all about analytics, the middle office about APIs and the front office is smart apps for smart devices.


The banks that can pivot from being monolith, vertically integrated, physically focussed structures to microservices, open market, digitally focused structures within the ten-year cycle of web 3.0, are the ones that will survive and thrive.

Meanwhile, if interested, this idea began eight years ago, so here’s that blog about BaaS from 2009:

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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  • Dear Chris

    I’m with you on most of the article but i just don’t see how or why this marketplace needs to be a bank.

    Yes, members of the marketplace will produce and consume – ‘prosumers’. Yes they will need a ‘trading account’. Yes they will need a digital wallet. Yes they will need a social network to connect and to share and to trade, and yes they will need a currency that allows them to pay for things cheaply and easily.

    I’m just not convinced that it needs to be a bank.

    I see it more of a members club with a shared business model, processes and revenues. One for all and all for one. That sort of thing.

    Of course it requires a new currency not dissimilar to Bitcoin but which is earned into existence (for contribution to the common good) rather than mined into existence as in Bitcoin, or loaned into existence as in money.

    • Chris M Skinner

      Thanks Mike

      I am not saying the marketplace has to be a bank, but that banks have the possible opportunity to be the marketplace owners, as they currently have the customers and the capital and, more importantly, because the current regulatory structures gift them that opportunity.



      • Yes Chris I get what you are saying.

        I think what I’m trying to say is that financial capital is increasingly being challenged by social capital.

        When the measurement of social capital is standardised (here in MCR we’re working on that with the Universities) and its issuance regulated (we’re working on that too) what we will see is the means of creating capital shift from the banks and financial QE supporters, to the people and communities that create social capital and which can stored as a complementary digital currency.

        In this instance it doesn’t matter if the banks have the capital or the customers. Distribution of capital becomes the responsibility of organised community groups (under network licence of course).

        For the value of social capital to be unlocked, all we have to do is stake out what it looks like and how its measured in a way that Joe Public and Mr Investor both understand.

        When that happens we’ll have created the social investment market that us social capitalists long for. Get paid for doing good? Magic our Morris.

        Such a marketplace will is the sharing economy waiting to happen but it will really catch fire because it will be represented by its own (complementary) currency.

        That makes it investable for those who possess financial capital and who are after a safe, sustainable long-term investment play – a safe haven if you like. Community in other words.

        I think Bitcoin is a straw in the wind. All the other alt-currencies likewise.

        People are restless. They have no money and need to fix their problem. So what’s happening is that people like me are working like crazy to fix that problem.

        I think we’ll see a membership club emerging. Think member dividend. Think shared enterprise. Think shared business model. Think shared purpose. Think Co-operative but without the decision-by-committee achilles heel that’s bogged down their brilliant idea. Think Co-ops 2.0. Think personal date stores in fact.

        Make/build community, unlock stored value (share your underused assets and talents with others just like you), waste less etc.

        Also, give community groups the software they need to consolidate their independent membership clusters into one giant population with massive buying power. Like trump, do big trade deals.

        Redistribute entitlements in proportion to contribution. Open, transparent, accountable. Digital. Points earned into existence then traded on the social stock exchange.

        I think that’s where we’re headed and I’m not sure that banks can help it or hinder it but I’m loving the debate Chris so cheers for that.


  • Dear Chris – thanks for the nice blog. You’ve enlightened all your readers about the Web 3.0 and embracing it. I don’t see a choice for banks. Only Web3.0 will address the complexity that gets created when all all businesses and customers are connected and exchange value online.

    Today all B2B and B2C interactions are hand coded. The steps being: services discovery (i.e. entities) and mediation and contracting and value exchange, etc.. This could be taxi, hotel, car loans, international remittances, or any of the other services. APIs and presentation technology are enabling this.

    In the for see able future all these will be automated. As the combinations of interconnections become explosive, getting the best value and integrated experience will be very complex. As we speak the whole world is getting “organized” into entities and knowledge graphs on top of a few standard dictionaries from the public domain. All B2B interactions that we saw above will be “automated”. The intelligence for the same will come from AI/ML.

    The analogy I would to think is – like the village market scene, and people, skills, products and customers go through value exchange by languages and dialogue. But when the market for a product of service diminishes the provider goes to new market. S/he first has to “adapt” to the language to the new market. S/he picks up “translation” as the way forward, initially. But being inefficient the provider has to learn the new language and fulfill any transaction in the new language.

    So also, as machines does the business decisions (sanction a loan, sell a product at a price point, map customer to the producer of service, etc.) in the new world, we ought to move to machine-understandable interactions. And that is Web 3.0

    Banks have one fundamental question to answer – do you believe in the coming of Web 3.0? If so, plan!

    Please keep blogging – I read all your stuff and get inspired!