Lending Mindset

Collaborative consumption and financial services

From The Social Cost of the Loss of Job Stability and Careers

McKinsey had Yankelovich survey the attitudes of young people a decade ago, and even then, the results were pretty disturbing. Yankelovich projected that college graduates would average 11 jobs by the time they were 38 (!), yet found they were demanding of their employers, wanting frequent feedback (as in lots of attention) and quick advancement. But if you are not likely to be around for very long, no one is likely to want to invest in you all that much (McKinsey, which was competing for a narrow slice of supposed “top” talent and not offering Wall Street sized pay opportunities, might have been more inclined to indulge this sort of thing than other employers).

But these rapid moves from job to job, and now a much weaker job market, are producing behaviors that old farts like me find troubling. One is rampant careerism. I’ve run into too many polished people under the age of 35 where the veneer is very thin. It isn’t hard to see the opportunism, the shameless currying of favor, and ruthless calculations of whom to help and whom to kick, including throwing former patrons under the bus when they are no longer useful (I can cite specific examples of the last behavior). The world has always had its Sammy Glicks, but now we seem to be setting out to create them on a mass basis.

While I do not share the idea that this new behaviour is by choice only, the current job instability is probably here to stay.

In the same time, probably not uncorrelated, we are seeing the rise of collaborative consumption:

Collaborative Consumption describes the rapid explosion in traditional sharing, bartering, lending, trading, renting, gifting, and swapping reinvented through network technologies on a scale and in ways never possible before.

WHAT’S MINE IS YOURS from rachel botsman on Vimeo.

Leveraging assets’ idle time makes a great economic sense, especially if incomes are becoming less constant than in the previous career framework.

The impact for financial services is major. If we take the example of the 2 major purchases that require credit : house and car, the current credit score system is based notably on stability of income over time as a way to measure reimbursement capacities. However the current career instability will have a negative impact on lending, making it less easy to access property.

However, if you consider the supplemental income that could be generated over the life time of an asset (House via Airbnb or Car via Getaround), then the decision for lending could be made using another basis than stability of the main source of income. Especially if these assets are built around the possibility of collaborative consumption. Taking the example of a car, Ford could pre-equip cars with the necessary equipment for sharing, allowing a wider population the access to car ownership.

Calculating risk and evaluating value over time is at the core of financial services. Applying those to new behaviours is not innovation, it’s just servicing customers.

Market Watch Mindset Personal Finance

Accounting and Banking: design issues

I am no designer, nor a marketing specialist but as a bank customer (with different banking relationships) I can tell you I think my banking experience is pretty bad. Because I switched to a more corporate finance job, I finally realised what could be the root cause of this issue : accounting.

Accounting to be honest is not the most sexy topic, though it serves its use. It allows keeping track of a corporation financial situation by embedding control in the way it is done (double entries) as well as allowing a common language for several people working on the same topic or transitioning. Also in pre-computer era, it was built in relation with its support : books. Accounting on paper makes sense.

Good design (at the time)

But since I am not a corporation / nor an accountant by trade / nor doing my personal finance on paper, why are banks sending me banks statements in the format of accounting statement?

This makes no sense. Accountants must represent 0.01% of the population of bank customers.

Mint is a good example of design applied to financial information (while not the first and the best one). This makes much more sense than the previous statement.

Other startups, such as Simple [Note: Anthemis is an investor] are trying to redefine how financial information should be presented to customers. The first difficulty is to bring understandable information to each spending transaction. A better identification of the vendor and its category is key, notably for searching past transactions (also keeping more than 2 months of transactions helps).

Additionally, presenting not only an historical account of financial transaction, but also a forward looking view of a customer financial situation is moving from an accounting statement to a personal finance overview. This is not new as startups such as Rudder (, have tried to show forward looking information. The concept of Safe to Spend balance used by Simple is in the same concept.

Fast Company has an interesting review of Simple design decisions:

Other interesting design choices used by financial services that could be added to this post?