I have highlighted in the past several major trends affecting financial services :
- Digitization of transactions, especially receipts from purchases.
- Improvement and democratization of marketplaces, lowering the cost of liquidity on transactions
Private Banking is sometimes offering to their high net worth clients the management of both their financial and non-financial assets. Is a similar approach possible for retail clients?
With the lowering costs of data storage and processing power, driven by Moore’s law, Kryder’s law… and made real in cloud services (Amazon AWS for example), leveraging large sets of data is easier. For example Instagram, before its acquisition was managing 35 million users and multiple terabytes of information.
The success of Mint.com has shown that aggregation of financial data and representation across various class makes finance management easier. But this financial data only shows a fraction of someone’s assets. There has been some inroads in adding non financial data to this picture, such as home value leveraging Zillow’s data but there are still some step lefts to true asset management.
As Amazon and Ebay have proven with their apps, for products, SKU data is becoming a commodity. Using a simple camera, any bar code, reference can be matched to an exact product and definition. While this was manually possible before, inventory of assets as become much easier. Using e-receipts, anyone will soon be able to maintain a digital list of their assets, in effect virtually tagging digital information to their physical stuff.
The most obvious use case, as Patagonia’s common thread initiative is hinting at, is connecting this data live to a marketplace, making it easier to re-use these assets. This is not new in itself but several drivers have potentially lowered the cost of doing transactions, making lower value transactions viable.
- Reputation and identity remains a partially solved problem. While reputation works quite well in a single vertical (ebay for example), reputation across several services is not carried.
Complexity over delivery is still an important issue for these transactions, but experiments, such as the Amazon Locker may show possible solutions. If we are indeed moving away from consumerism, an improved management of small assets is one of the key factors. When will we see banks list your TV set next to your savings account?