At Sibos* in October The Value Web and Matter Solutions designed and facilitated a series of five discussions over three days about the implications for financial institutions of extending our ‘now’ so that it lasts a long, long time. SWIFT, who manages Sibos, invited some of the best minds from a variety of fields to consider how finance would look if our planning horizons were to be stretched all the way to the end of the century.
We looked at six change drivers – political, economic, social, technological, environmental, and legal – in the form of scenarios that extended out to 2080 and beyond. But throughout, our eye was on the here and now. We identified themes linking these six drivers to the decisions that financial institutions are making, or ought to be making, today. Among them:
The oldest bank (Monte dei Paschi di Siena) has been in operation since 1472. What we learned in our series is that because the system has lasted a long time, we trust it. If banks came and went regularly we would not trust them or the bankers that run them. That is why we don’t yet trust Facebook to be a global currency: they haven’t been around long enough for us to believe they will ‘stay.
As money itself becomes more of a virtual accounting unit rather than a physical store of value, our trust in it, and the institutions we rely on to mange it for us, risks fading. How do we know that Facebook won’t be the next Netscape (who?) The prospect of ‘Facebook money’, whether imminent or not, highlights the connection between our trusted network of friends and our transactions, savings, and investments. Building currencies around these networks might stimulate today’s banks to consider capitalizing on what confidence they have managed to build by becoming a trusted storehouse of all our personal data, managing our digital identities for us. Building on what they know about their customers, perhaps banks will become the ideal dating agencies!
For centuries, banks have been the principal conduit linking savers and borrowers. A neutral third party was needed between provider and user of capital, which placed the bank at the center of this relationship. Today, new models are emerging in which borrowers and savers are in more direct contact. Zopa, for example, represents crowd-lending—no bank intermediation needed. As banks’ role in allocating capital is challenged by these alternative models and as the physical reality of money is replaced by clicks and electrons, branch networks might come to play a new role as the bricks-and-mortar manifestation of the communities that create wealth – monetary and otherwise – meeting-places for those who otherwise only connect on-line.
Research shows we tend to accept making long-term investments so long as returns can be expected within a time period corresponding to half our likely remaining years of life. As a 50-year-old with 30 years left on the clock, so to speak, I am unlikely to make an investment whose time horizon extends beyond 15 years. Yet our money lives beyond us in a form we rarely appreciate.
The Long Now offers the perspective to think about our money after we are gone and how best to think about the inheritance our children and our society can expect from us. Once we begin thinking about what happens to our wealth once it passes to the next generation, it is a small step to re-thinking patronage and the broader impact our wealth can have within our own lifetimes.
An un-scientific survey of Sibos participants showed that the time horizon for their professional activities tends to be five years or less. The Long Now is about extending that time horizon and providing frameworks for being, as Paul Saffo put it, ‘good ancestors’. The Long Now is not about guessing our future; rather, it is about re-thinking the consequences of today’s investments, behaviours, interactions, and business decisions and how they will play out over time. We are looking far into the future but what we find there is a mirror, reflecting the choices we make today.
For more information on The Long Now and Long Finance, visit:
* Sibos is the world’s premier financial services event. In October, 2010, Sibos was held in Amsterdam. Over 9,000 people from across the financial services community came together for four days to learn from each other and to do business. For the third year in a row, The Value Web and Matter Solutions designed and facilitated interactive workshops as part of Sibos. Sponsored by SWIFT, the global provider of secure financial messaging services, Sibos is the ideal forum for the Value Web to bring genuine collaborative innovation to the financial services industry.
In addition to the Long Now of Finance, we designed and facilitated sessions on EU Harmonization, Islamic Finance, Standards and Inter-operability, the Basel Accords and Trade Finance, Business Continuity Planning, Keeping Secrets, Sustainability in Finance, and a week-long innovation lab, with teams competing to devise innovative services and present them to a panel of Venture Capitalists.