Home / Digital Bank / Moving from banks as money stores to value stores

Moving from banks as money stores to value stores

I’m talking a lot about the ValueWeb – how the internet is changing the things we value in banking, trade and commerce as well as life, love and relationships – at the moment, as this is the subject of my new book.

One of the most intriguing things about the ValueWeb is the latter – the ability to create value out of nothing but a relationship. 


We all value our relationships.  Our friends and family are probably more important to us than our work and salary, or they should be although it doesn’t always work that way.  It’s a bit like we used to talk about work-life balance, where our work was day and life was night, but that’s gone away in the networked economy.  Now we have work and life 24*7.  When we wake we check our email, facebook and twitter notes to see who’s talking and, before we go to bed, we do the same.  It’s why we are living in an insomniac world, with people tweeting, talking and emailing at all times of day.  We also live in a global community, which is why we’re insomniacs.

Our relationships are now being formed on the network.  That doesn’t necessarily mean love, but certainly our lives are becoming digitised.  We stare at our devices 24*7 looking for meaning, sharing and understanding.  We want to be entertained by our friends and celebrity likes, and we want to find knowledge and interest from sources as diverse as the Economist and Pew Die Pie.

This is the age where traditional media has become fragmented and social media has gained a voice.  A voice where anyone from a guy blogging naked in his bedroom (truth be told I don’t do that, well, not today anyway) can be as meaningful as your favourite columnist in the paper, or more so.  In mentioning Pew Die Pie, we live in an era where one person can be as influential as the BBC or even more so.  Pew Die Pie has around 40 million subscribers.  That’s more people than the entire population who watch television in the UK.

Some time ago, I noted that free is the business model, because free can be monetized.  My blog is free; Pew Die Pie’s videos are free; most media is free … so how do we make money?  We make money be being relevant.  Relevance and attention are the new value mechanisms that attract investment, not just goods and services.  Relevance and attention demand support and, just like traditional media, will get that support in the form of sponsorship, dialogue and engagement.

My blog is free because I monetize the blog through producing books, speaking at conferences, advising technology firms and banks and generally being an all-round pain.  Pew Die Pie makes over $4 million a year from online adverts that align with his media channel.

Free makes money.   Ideas make money.  Content makes money. It’s all about the value of relevance and attention.  If you get the eyeballs, you get the money.

This is where it gets intriguing as this side of the ValueWeb is untapped by banks, and untapped by many others.  Banks forces upon currency exchange and being a store of money, when they should focus upon value exchange and being a store of value.  A store of value will store everything from your cash and money to your investments and savings to your memories and mementos.

Who stores your memories?

The average baby born in 2015 is forecast to have a lifespan of 150 years.  What will your babies be watching in 2165 as they reach their final year?  Will they still have access to their memories?  Will Facebook still be around?  Will the USB sticks, the Teradata hard drives and the dongles be readable?

Many commentators are concerned about our digital graveyard where all of our digital assets become useless a century from now, when technology has moved forward at such a pace that your valued things today become irrelevant.  The problem is that the things become irrelevant but their value to you does not.  Those photographs of baby growing up are just as important to you today as they will be to your children tomorrow and their grandchildren a century from now, but who will store those memories?

What is a value store?

A value store is what a digital bank will become: a store of all the things you value.  Traditionally, banks have offered value stores in the form of lock boxes in the branch; in the future, the value store might be your Dropbox on the internet.  But do you trust your Dropbox, your social media or your other stores to be accessible a century from now?  Can a bank provide a value store that can guarantee such a thing?

If banks move to being value stores rather than currency stores, then that is exactly what they will do.  Their promise with money is that they guarantee not to lose it and, if they fail, you are guaranteed to get at least €100,000 returned (European rules).

What about if you promise to store my memories.  What guarantee do I get then?  What about a guarantee that you will bank my memories and guarantee they will be accessible forever.  If you fail, then you guarantee to provide reimbursement to the value I insure my memories for.  If I say my memories are worth €1 million, then you can charge me €100 a year (or whatever you feel the premium should be) to store my memories with a guarantee they will be retrievable for 100 years.  Should there be an impact where you fail, I get the million.

This is a tricky course, but there is a far wider role for a bank as a value store than as a monetary store, particularly as we move to a world of digital rather than physical assets. 

  

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...

Check Also

The top trends in retail banking innovation

I get lots of input from many sources, and one of the ones I like …