[Dave Birch] At the round table on paleo-future, Tom Standage mentioned one of my favourite comments about innovation -- in fact, one of everyone's favourite comments about innovation -- which is William Gibson's comment on National Public Radio in 1999, paraphrased as "the future is already here, it's just unevenly distributed". What he means by this, I think, is that all of the technologies that will make a difference to a company's business model in any reasonable timescale (let's say the next 25 years) already exist. Therefore, the right way to try and get ahead of the curve on new business models is not to try and imagine amazing new technologies from scratch but to simply go out and look at how technologies are moving from the lab into the world and then try to consider their impact in a reasonably structured way.
The history of the technologies that we associate with payments today -- cards and ATMs being the key examples -- is that they came from outside the banking and payments world but were then picked up and exploited by banks. OK, fair enough and not a particularly radical observation. But does it matter? Well, look at the nature of the innovation underway at in prosaic processes.
[Quicken's] s new tool is just another example of how innovation in the online personal financial services sphere is being driven, not by banks, but by more imaginative outfits (often newcomers such as Mint and where Wesabe). The result: banks are steadily surrendering their franchise in personal finance as the population gets younger and more tech-oriented.
[From Banks failing in personal finance online proposition]
Perhaps whereas it didn't matter in the past, it will matter in the future because the new technologies will sit between banks and their customers, making banking services into a commodity accessed via networks and not a customer-facing proposition at all. As John Reed observed, "one day banking will be a line of code in a big network".
Anyway, back to learning from the past. Tom made some fantastic observations on the nature of "futurology", in particular accusing those of us trying to think outside the box of actually being too conservative because we imagine technological improvements but not changes to business model. Tim said that one of the things he would do differently is that he wouldn't listen to customers as much when trying to create a future vision. Jon said that while new players in payments start off trying to create a priviliged position in the value network, building in openness really ought to be a central strategy. All perspectives which led to vigorous, enjoyable and edifying debate.
After listening to Tom, Tim and Jon put forward their incredibly well-informed perspectives and discuss some of their ideas in front of an equally well-informed audience at the round table, I'm more convinced than ever that if paleo-future study can teach us anything, it's that the "next big thing" will come not from the centre but from "the edge" and it will use technologies, tools and techniques that are already widespread. Thus, we need to spend more time trying to work out how to use existing platforms for payments rather than trying to invent something wholly new. But what does this mean in practice? Hopefully we'll get some outline ideas in some of the future round tables.
Incidentally, Tom also made another great point when we was talking about the success of M-PESA. In the same way that mobile networks enabled developing countries to leapfrog fixed-line telephony, it may well be that mobile handsets enable developing countries to leapfrog fixed-line banking, providing cash-like (P2P) e-payments via mobile rather than building on bank account to bank account or card account to retailer account payments. This deserves further reflection. Perhaps the connection between banking and payments isn't as intimate as is often assumed.
Perhaps the most important use of money - It saves time.
Author W. Somerset Maugham (1943).
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