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A new banking system for social life

Some time ago I was having a debate about social networks and the problems of where they overlap with professional networks.

For example, when I first registered on Facebook, I connected with everyone I knew – family, friends and business acquaintances.

The result is that I have a completely messed up Facebook life, where I daren’t post anything personal as most of my network is business colleagues, but my extended family post things about me which all of them can see.

It’s just plain embarrassing.

As a result, I now have two Facebook profiles: a business one and a personal one.

Similarly, I’ve moved towards clear delineations between my personal and professional life, and hence use LinkedIn for business purposes and Facebook for personal life.

Similarly with Twitter, where I have two accounts – one for my more irreverent comments as Chris Skinner, and the other for purely business focused news through the FSClub.

This clarity of keeping work and personal lives apart is summarised well by this hugely popular presentation from Google's Paul Adams on the real life social network:

View more documents from Paul Adams.

The presentation clearly shows that in the first phase of Web 2.0 we got confused, and mixed up our buckets of friends, family and work in one massive heap.

The next wave of change will separate these into compartments that are firewalled, and we determine what information and when is allowed to overlap or filter across the walls.

If we want our work colleagues to see our partying on New Year’s Eve, then we tag those entries accordingly; if we want to stop our work mates seeing our holiday photos, then that’s easily protected for privacy through a tag too.

The reason I mention this is that this challenge of keeping business and social needs apart in our individual networking applies to banking.

Right now, banking deals with one area of value management: commercial trade.

It’s all about trade and commerce, but nothing about community and life.

It’s as though money is life, whereas life is about far more than money.

Most people will say that life is about family and friends. When you die, it’s not your work colleagues that will cry, it’s your family.

It won’t be your boss that misses you when you pass on, apart from your contribution to profits, it’s your partner, children, parents and mates.

That’s why money runs in a parallel stream to life.

But it’s not life.

Money enables things, but the best things in life are free.

OK, so I’m going off on one again, but you see the point.

And the point is this: just as our network of contacts needs organisation and compartmentalisation; so does the exchange of value mechanisms.

Right now, we have a very well organised, regulated, sometimes fragile but generally strong system for money … but we have an extremely nebulous, disorganised, poorly managed and little understood system for exchanging social value.

Sure, there’s been experimentation with community currencies, as I’ve referenced before, but these are all very local in nature and often short-lived.

And yes, we have a welfare state, but such states differ country-by-country and often depend on governments to organise them … and, as everyone knows, governments are there to create the state not to manage it.

Therefore, in most examples, the welfare system is better run, managed and organised by private or public-private cooperations, than by pure nationalised or governmental systems.

What this means is that the management and exchange of welfare and community systems should have a system that runs like the banking system, but in parallel.

It might even be run by the banking system, with compartmentalised firewalls allowing some commercial trade to filter into community services and some community services to filter into commercial trade.

This is what I think we were getting at in the lengthy debate I had with Venessa Miemis last year, and it is something that struck me today as I talked about social networks and professional networks.

In other words, we need a parallel banking system for trading social currencies that is as well organised, regulated and managed as the banking system is for trading commercial currencies.

You may or may not agree, but now it gets interesting and I’m sure there’ll be a lot more written about this in 2011.

Watch this space.


About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.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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