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Über dieses Buch

This book is a practical guide to the evolving landscape of finance, highlighting how it’s changing our relationship with money and how financial technology, together with macroeconomic and societal change, is rewriting the story of how business is done in developing economies. Financial services companies are trying to become more customer focused, but struggling to help huge customer segments, particularly in developing economies. Alternative financial models and tools are emerging, which are being embraced by consumers and incumbents. In large parts of the developing world, alternative services are leapfrogging traditional finance, meaning more and more people have access to finance without ever needing a bank. Meanwhile, the barriers around financial services companies are crumbling, as they become more reliant on integration with new providers and alternative types of service. Financial products can no longer be viewed in isolation, but as part of a service landscape that supports how people do life. This means rethinking how our businesses are designed, motivated and organised, and letting go of the old ways of thinking about supply and demand. With practical steps businesses and, in particular, financial services organisations need to take to participate in a global service ecosystem, this book will be of interest to financial professionals who work in banking, financial technology, and development finance.

Inhaltsverzeichnis

Frontmatter

The Un-bank, Part I

Chapter 1. Ecosystem vs Egosystem and Revolution vs Evolution

Abstract
Banks need to move into the ecosystem to participate in the new economy, but it’s not easy. In this chapter, we consider the forces driving us from traditional financial services egosystem to the emerging financial ecosystem. We examine the way financial services organisations have been structured to date, and the binding forces that are keeping them that way, despite efforts to change. We discuss the factors that have allowed the ecosystem economy to emerge, and how the transition is happening—with some examples of organisations that are successfully bridging the gap. We also consider the level of disruption that will be required or result from the transition and ask whether relatively pain-free evolution will be overcome by a more compromising, dramatic and painful revolution.
Sofie Blakstad, Robert Allen

Chapter 2. What’s the Point of Banks?

Abstract
In this chapter, we review the alternative financial solutions emerging to challenge the services offered by traditional banks and question whether the utility of banks is waning, or whether banking as a concept needs to change. We run through the key services now offered by banks, describing the alternatives that are emerging and how these new services are likely to impact traditional banking. We consider the immediate, future and long-term challenges to traditional banking and how likely these are to present a threat.
Sofie Blakstad, Robert Allen

Chapter 3. The Death and Resurrection of Capital Markets

Abstract
In this chapter, we examine how capital markets have evolved, how they have contributed to the growth of global trade and international currency stability. We describe how the structure of capital markets, increasing complexity and lack of transparency has contributed to various crises, growing inequality and a lack of accountability in large corporations, which are becoming more powerful than nations in the twenty-first century. We posit that today’s capital markets structures are flawed and favour exaggerated growth of already large corporations, at the expense of smaller businesses. We also consider how technology, platform and ecosystem economics are likely to impact capital markets, as banks lose their stranglehold, and participation in the benefits is no longer restricted to larger companies.
Sofie Blakstad, Robert Allen

The Un-bank, Part II

Frontmatter

Chapter 4. New Payments Landscape

Abstract
In this chapter, we examine how payments have evolved in recent years, from cash-based to digital and from batch to instant. We present the commercial landscape of payments today, with central banks, centralised infrastructure, distributed commercial banks and payments services, together with some of the technical challenges in adapting to new standards, such as instant payments. We show how alternative methods of moving value, including non-bank payments and blockchain-based transactions, are bypassing payments infrastructure and the banking system.
Sofie Blakstad, Robert Allen

Chapter 5. Central Bank Digital Currencies and Cryptocurrencies

Abstract
We briefly described the potential impact of Central Bank-issued cryptocurrencies in Chapter 2. In this chapter, we explore the emerging trend for central banks to experiment with digital versions of fiat currencies and cryptocurrencies. We discuss the opportunities presented by cryptocurrencies for central banks and individuals, together with the risks. We explore the possible impacts to existing commercial banking systems and why the structure of government, central banks, regulators and commercial banking in different countries creates more or less challenging environments for the issuance of Central Bank Cryptocurrencies/Digital Currencies (CBCCs, or CBDCs as we use in this book). We present alternative models with greater or lesser involvement of central and commercial banks and discuss the pros and cons.
Sofie Blakstad, Robert Allen

Chapter 6. Shifting Values in the Connected Economy

Abstract
As currencies digitise and trade globalises, the world’s getting more connected. In this chapter, we consider the macroeconomic impact of this trend, the shift of value that appears to be taking place away from larger organisations towards smaller firms and the implications for banks. We examine the changes in how work and creative input are being revalued against money, the phenomenon of people working for nothing and the growing importance of network reputations in our self-actuation and in contributing to community resources, now at a global scale. We consider how the rise of individualistic determination through new platform outlets has arisen in parallel to a more fragmented commercial environment, as local and tribal values overcome economies of scale.
Sofie Blakstad, Robert Allen

Chapter 7. Leapfrogging Banks in Emerging Markets

Abstract
In this chapter, we discuss the challenges for the 2 billion people who lack access to financial services in developing and developed economies. We examine how developing economies have embraced alternative financial services, in many cases bypassing traditional banks, and how lives and the economy in some countries have been transformed where these services are available. We present how these services can act as a gateway to inclusion in the traditional financial system, and how they are evolving as a valid alternative. We discuss the challenges of regulation, interoperability and usability and how overcoming these barriers will enable them to scale to supplant traditional banking in developed as well as developing economies.
Sofie Blakstad, Robert Allen

The Un-bank, Part III

Frontmatter

Chapter 8. Alternative Wealth: The Cow in Your Pocket

Abstract
In this chapter, we discuss how blockchain technology, through tokenisation of physical assets and behaviours, enables the creation of new types of community currency, which can be used to shape, support and bind global and local communities. We present how this can support value chain provenance, and how it can guarantee origin of goods and behaviours of actors in a system. We show how new asset-based tokens will change our relationship with currency and securities, as they become transactable and it becomes possible to hold a portfolio of assets without participating in traditional capital markets or banking. Finally, we show how to combine tokenised assets with the blockchain benefits of being trusted, faster, more transparent and more efficient than traditional supply chains.
Sofie Blakstad, Robert Allen

Chapter 9. New Standard Models for Banking

Abstract
In this chapter, we explore how traditional banking operating models are struggling, and describe the emerging models for banks that are being adopted both by incumbents and by challengers, together with some of the opportunities and challenges these new models present. It’s important to bear in mind that this is still a relatively new industry development and, like every other major disruption, early adopters and leading-edge pioneers are more likely to get it wrong than right. We believe some will succeed, but today there is limited evidence to indicate who that will be.
Sofie Blakstad, Robert Allen

Chapter 10. The Money Revolution: Recycling Value to Drive Sustainability

Abstract
The shape of finance and how businesses are being funded have already seen some fundamental changes, but this is only the beginning. We’re starting to see the same sort of paradigm changes in finance and money, as those that hit print media when the internet came along. Just like popularly held perceptions of books and news media over the last two decades, our concept of what money is and how it’s invested are being challenged. In this chapter, we explore the impact of these changes on how money is moving around in the system and what this means for small and micro-businesses, particularly in developing economies.
Sofie Blakstad, Robert Allen

Chapter 11. Green Fintech

Abstract
In this chapter, we provide a broad overview, together with some examples, of how these emerging technologies can help provide solutions in support of the UN’s Sustainable Development Goals. The UN and many other NGOs, together with investors, researchers and technology companies, are converging to start building solutions to some of the thorniest problems in this area. We explain the background to the sustainable Fintech movement and present some top-down and bottom-up use cases that are abstractions of a number of projects being developed in emerging economies today.
Sofie Blakstad, Robert Allen

Chapter 12. SME Microfinance, Fractional Ownership and Crowdfunding

Abstract
Expanding on some of the UN’s priorities, in this chapter we explore the challenges facing communities of small businesses globally, including the financing challenges they face, and discuss how emerging technology solutions, platform solutions and behavioural reputation systems can help them re-establish community cohesion and their economic power. This is an opportunity for developing economies, where many people are poorly served by the financial system and exploited as a result, but also in developed economies where there’s a real opportunity to rebalance the power of individuals and small businesses.
Sofie Blakstad, Robert Allen

Chapter 13. International Sustainable Investment

Abstract
In this chapter, we explore the world of sustainability investment, the scope of the challenge and the barriers faced today. We discuss how growing awareness and technology are working together and how current developments in financial technology will help remove some of the barriers. We present how some of these challenges can be addressed, the efforts to overcome them and the potential for Fintech solutions to address the still-gaping investment gap.
Sofie Blakstad, Robert Allen

Future Business, Part IV

Frontmatter

Chapter 14. Services and Demand

Abstract
In this chapter, we examine the differences in perception for businesses and consumers, of what it is that they’re selling and buying, and why the distinction is important for businesses as they design their service offerings. We discuss how a focus on products has arisen in banks, and why this is contributing to their decline as the competitive environment evolves around them.
Sofie Blakstad, Robert Allen

Chapter 15. Platform Consumers

Abstract
In this chapter, we examine the evolution of consumers from retail consumers to platform consumers, as businesses move into the ecosystem and marketplaces emerge to manage B2C and peer-to-peer sales. We observe how platforms have evolved since the 1980s to become global giants, and how they have been fundamental to changing customer expectations and behaviours and discuss the impact on businesses, and how their service models have evolved as a result.
Sofie Blakstad, Robert Allen

Chapter 16. Technology vs Solution

Abstract
This chapter will be useful for anyone who thinks that new technology is the answer to their service or operating model problems. We explore how technology has become a shorthand for products or services, and why business and technologists alike have subscribed to this view. We present the arguments for why this is a costly way of papering over problems in operating models or services, how adding technology to a complex organisation or process can reduce efficiency and service levels, and why a solution focus can help organisations avoid falling into this trap.
Sofie Blakstad, Robert Allen

Future Business, Part V

Frontmatter

Chapter 17. Career as Microservices—Reputation-Based Skill Validation

Abstract
The shape of work is changing, and along with it how we perceive our careers. More than 1/3 of the workforce in many countries is now in the growing “gig” economy, which can no longer be described as an anomaly, as it’s rapidly becoming the norm. In this chapter, we examine how reputation- and fact-based validation is overcoming traditional career paths, how this is influencing current trends in reputation-based recruitment, implications for employment and career paths, and where we believe this will take us in the future.
Sofie Blakstad, Robert Allen

Chapter 18. Plebocracy Bias

Abstract
Post-truth. Information bubbles. Echo chamber. Confirmation bias. We’ve all heard a lot about these phenomena recently, but they’re not new. Opinion, regardless of whether it’s founded on fact, has always influenced apparently impartial decision-makers, often unfairly disadvantaging individuals and organisations. We explore the failings of traditional and contemporary reputation systems and why platforms have created so many opportunities for bias, together with the fundamentals of human psychology and globalisation that have created the conditions for this to happen. We present some of the results and responses to this and an outline of how the challenges can be addressed with new approaches to reputation.
Sofie Blakstad, Robert Allen

Chapter 19. New Approaches to Identity and Authentication

Abstract
In this chapter, we explore concepts of customer authentication and identity, arguing that in the ecosystem economy we need to take a fresh look at what we mean by a customer, break the traditional human-based paradigm and start adopting more community-based trust systems for validation and authentication. We question the received wisdom about individual identity in the age of IoT and community activities, and propose an ecosystem approach that can address the perennial challenge of what we mean by a customer.
Sofie Blakstad, Robert Allen

Chapter 20. Contextualised Trust Solutions

Abstract
In this chapter, we explain how contextualised trust systems, such as that being built by hiveonline, can address reputation and identity challenges, particularly those associated with truth, for organisations and individuals. We consider why we need to trust people and organisations, what this means for how we consume trust, and how we can apply new lenses to reputation, to support trust in the ecosystem economy.
Sofie Blakstad, Robert Allen

Chapter 21. Service Consumers

Abstract
In this chapter we build on the previous chapters to discuss how customer interaction with services has evolved, how this evolution is impacting customer behaviours and expectations, the complex relationship customers have with service providers regarding data, and what this means for financial service providers today and in the future.
Sofie Blakstad, Robert Allen

Future Business, Part VI

Frontmatter

Chapter 22. Service Alignment

Abstract
In this chapter, we discuss how banks and other organisations need to evolve away from product focus and towards service alignment, to become fully functional ecosystem players. While we focus on banking transformation, the same considerations apply to large, traditional organisations across many industries, struggling to evolve in rapidly changing competitive environments.
Sofie Blakstad, Robert Allen

Chapter 23. Case Managed and Core Standardised Capabilities

Abstract
The service aligned model relies on two key types of capability: Case Managed—flexible at the customer-facing edge, and Core Standardised—pre-loaded elements that are instantly available to the customer-facing teams on demand. This chapter describes the two types of capability. With these two simple capability types, organisations can easily flex structure to include third-party providers, partnership-operated services and other ecosystem players, and continuously evolve to meet changing customer needs.
Sofie Blakstad, Robert Allen

Chapter 24. Communities of Practice and Centres of Excellence

Abstract
This chapter describes a way to manage skills development in any organisation in the ecosystem, but in particular within the service aligned organisation. It expands on the theme of devolving decision rights and control to expert groups, covered in the previous chapter. We describe two approaches to the skills community, in the Communities of Practice distributed throughout an organisation, and the centres of excellence where skills are centralised into a single type of service delivery. We compare the two models, highlighting common themes and differences, and how they can be applied to the capability aligned organisation.
Sofie Blakstad, Robert Allen

Chapter 25. Service Architecture

Abstract
In this chapter, we discuss some core principles behind and practical steps towards developing a Service Architecture and how it sits alongside the other chapters in this section, with particular reference to Service Alignment. This chapter briefly describes how the concept of service fits into the constructs of service aligned organisations, and focuses primarily on how to arrange services as a Service Architecture (or Ecosystem) both within and beyond the organisation.
Sofie Blakstad, Robert Allen

Chapter 26. Decision Architecture

Abstract
Following on from service architecture and the structures needed to support a service aligned organisation, in this chapter we address the governance implications for organisations in general and the service aligned ecosystem in particular. We present a model for creating a decision architecture from the decisions that need to be made in an organisation, and how to structure decision-making groups around these, based on expertise and operational expediency rather than budget and hierarchy.
Sofie Blakstad, Robert Allen

Backmatter

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