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Banks are just safe keepers of data

Just sat through the first innotribe Long Now discussion and it proved to be interesting. A small but nicely formed crowd gathered and we talked about banking for the next century and investing in the world for the next millennia.

It all seems fairly esoteric maybe, but it did have one important outcome for me, which is a debate about trust.

We were talking about banks becoming safe keepers of digital information and someone made the point that to be this, you have to have trust in the safe keeper.

Another person then built upon this, and underscored the fact that it’s trust in the guaranty that the safe keeper provides.

Traditionally in banking, the trust guaranty from banks has been in keeping your money, funds and investments safe and secure.

In the future, the feeling is that the trust guaranty will be to keep our data safe and secure.

Assuming a bank gets that licence to be the trusted holder of a client’s information, you can then view the bank differently.

The bank can become a data miner for example, but not mining for financial data but data in any and all of its forms.

A bank may network businesses together to say that your business may benefit from a relationship with this business, based upon buying habits and supply chain and treasury similarities.

A bank may network people together, and create human relationships potentially even becoming a dating service for example. Amusingly, someone else in the audience said that they actually did this in their previous financial institution.

So a bank is no longer related to finance at all, but is totally focused upon being the best at utilising data and data analysis.

This fits with a theme I picked up on earlier this year, which was all about banks being inept at leveraging their data richness but that cloud computing and algorithms would change this.

After all, Apple’s iTunes, Amazon’s Superstore (it’s no longer books) and Google are all data businesses who use the rich analysis of data as their key resource. In the same way that others use commodities or humans to create value, these businesses use data as their raw material to create value.

That’s what banks of the future will need to do, and it’s a theme I’m sure we’ll come back to in the future.

Meanwhile, off to the plenary keynote now …

 

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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  • Chris Barry

    The items you have mentioned in this post are already reality in the market. Online financial management tools are currently used in this manner to help consumers find better deals, decrease their spending, increase their savings, and make better purchases. At the same time the banks mine this behavioral data to understand and improve the client relationship long term. The evolution of these online tools incorporate social media in the form of user reviews and ratings, friends and family contributions and payments options like P2P. The gap that is soon to be closed will be safekeeping the users identity and and important papers via digital safe.