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Making cents of grains of sand

I often use the analogy that traditional money is the bedrock foundation of our society, but this is changing.

It began to change gradually as we introduced alternative currencies, such as loyalty programs and airmiles.

These form pebbles of commerce that are significant, but are not traded nearly as intensely as real money.

This does not make such trading irrelevant however.

For example, if you could bank and trade your points of loyalty, you could find alternative markets very fast.

Such trading is difficult today – I can’t find a website where I can auction off my BA miles and AMEX rewards with others – but maybe this will happen one day.

But now there is a more important development as we have the new world of microcredits in Facebook and other social media.

These credits are mainly for gaming today but, over time, could easily convert into virtual currencies for the exchange of other sources of value, including pure shopping.

Facebook credits trade in fractions of pennies and cents for the gaming points you gain, and therefore I refer to these as the grains of sand in the payment system.

Grains of sand

Each layer of payments programming adds cost to the infrastructure, but consumers don’t care about cost if they get what they want.

So …

  • Facebook charge me for credits; and
  • PayPal charge me again for the conversion of cash from my card; and
  • Visa and MasterCard charge me again for credit and debit payments on my bank account; and
  • my bank charges me again

… I don’t care. Just let me buy stuff and have fun.

Anyways, if you buy inot this idea of grains of sand, lets layers another piece into the equation: the semantic web.

The semantic web is emerging as a web where everything is classified in a relational database. We move away from everything being hierarchical, where you pull stuff out of the wibbly wobbly web, to an age where everything is pushed at you based upon your behaviours, needs and wants.

In other words, the web starts to relate the grains of sand together and sees the connections and relationships.

This then gets interesting, as the deep analysis of grains of sand creates opportunities.

Oh, Chris is a fan of the X-Men, maybe we can push him some offers for comics.

Oh no, the grains of sand tell us that Chris is a Marvel fan of the Silver Age (the 1960s), not a general comics fan, so let’s push a rare comics convention at him.

Yay, that works!

What I’m getting at here is that the web becomes far more intelligent, contextual and cognitive in what you can do with my data.

For a bank this leads to a new age of cognitive banking where intelligent data leverage allows the financial firms that are most savvy to reach me at the point of impact, rather than at the edge of boredom.

What is the point of impact?

Well, the web has got me to visit this comic convention and I’m enjoying the mood … then I see a rare copy of X-Men #1 from 1963.


The comic will cost me $12,000 if I want it … oooh, far too tempting but far too costly.

I don’t have the money …

… but wait. My cognitive bank has recognised where I am, and through geolocation tagging of comics and my wirelessly connected devices has realised that my pulse has raised as I saw the excitement of a $12,000 rare comic.

Message: “Chris – do you need $12,000? We can add this to your revolving account credit right now at an APR of just 2.9% for the first year.”

Yowzer … that X-Men baby is mine.

OK, so I’ve made this point again recently about information as a competitive weapon, but now I’m coming at it from a slightly different angle.

The angle is this: the connected world is moving to one where every grain of data can be mined for knowledge.

Someone is going to be mining that knowledge and if it ain’t my bank, it’ll be PayPal, Facebook or someone else who knows what they’re doing with data.

Roll on the comic convention ….


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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