I was thrilled to have the opportunity to speak with Terry Ammons on his Groundbanking podcast and share how Sunrise Banks is expanding its mission to empower financial wellness through partnerships with FinTechs. Check it out on iTunes, Spotify, or his website here: https://lnkd.in/dzWmgtg #fintech #communitybanks #financialwellness
An article in The Atlantic earlier this month reviewed the origins of sharing in society and concluded two things – the sharing economy was the norm, not the exception for most of human existence, and today’s sharing economy is not really a sharing economy.
While it appears novel today, sharing in society has been taking place since the times of the hunter-gatherers. Work by Lewis, Vinicius, Strods, Mace, and Migliano (2014) say these societies adopted the social norm of ‘demand-sharing’, whereby food brought into camps were claimed and divided among group members, even those who rarely hunted.
This is explained by the nomadic lifestyle inherent in the hunter-gatherer society. Families who shared while on the move through widely varying climates survived, while non-sharing and sedentary families tended to die off. As civilization migrated to an agrarian society, towns sprung up, trades specialized, homesteads were established and the idea of private property took hold.
Today, globalization is transforming the aspirational futures of millions of citizens of developing nations. These aspirations will help fuel the growth of the middle class in Africa and the Middle East to leapfrog in technology, entrepreneurship, and educational models. The Organization for Economic Cooperation and Development (OECD) forecasts the world’s middle class will grow from 2 billion to almost 5 billion people by 2030, with most of that growth coming from developing nations. The world’s buying power is shifting toward this growing middle class and these aspirations will fuel the demand for assets.
The sharing economy that has emerged recently is remarkable in the face of globalization, but the basic necessity driving social norms that allow ‘sharing’ are little changed from the early days. It’s survival. Today the threat is not death by starvation, it’s running out of usable natural resources.
Today’s ‘sharing economy’ is in reality an extension of flea markets, swap meets, garage sales, car boot sales, and second-hand shops. The difference is that today this system is internet-enabled, accessible through mobile technology, and promoted through social media. Known as ‘collaborative consumption’, it doesn’t involve sharing in the pure sense, but involves “consumers” and “obtainers”, who do not only “obtain” but also “provide” resources to others. As the Atlantic concludes, “Ownership is still private; everything is rented, not truly shared. The sharing economy might be a significant step toward more efficiently tapping into the wealth of physical things owned by individuals—as opposed to corporations—but it’s still vastly different from the kind of sharing that defined humanity for tens of thousands of years.”
Today sustainable consumption is forming a virtuous partnership with collaborative consumption for the benefit of mankind.
After the New England Patriots earned another trip the to Super Bowl, CBS aired the premier of Hunted. For those who are unfamiliar with the show’s premise, “Hunted follows nine teams of two in a real-life manhunt as they attempt the nearly impossible task of disappearing in today’s vast digital world as highly skilled investigators combine state-of-the-art tracking methods with traditional tactics to pursue and catch them. From searching their targets’ homes and scouring their internet and cell phone histories, to identifying behavioral patterns, Hunters in the field and Command Center investigators work together to identify clues to potential hiding places and collaborators that can ultimately lead to capture.”
What’s fascinating to me about the show isn’t the game, it’s the technology available to both the law enforcement teams and the contestants that make it virtually impossible to escape traceability. It’s not only the tools at the disposal of law enforcement but also the tremendous digital footprint we generate continuously when we possess operating computing and mobile devices.
Last evening I read in Bruce Schneier’s book Data and Goliath, that by using public data from the 1990 census, a computer scientist found that 87% of the U.S. population could likely be uniquely identified by their five-digit ZIP code combined with their gender and date of birth. We’re not talking deep dark personal data here. Upon reflection, I guess this shouldn’t surprise me too much. According the the US Postal Service, there are 7,489 people in the average zip code, so the odds of one of 7,489 people being male and having my birth date are really small. What does fascinate me is the means to store and process the data so cheaply enables a data scientist with various lists to identify me.
Does the sharing economy use this type of data and analysis? Absolutely. In fact, it relies on it.
I have spent the better part of my weekend reading many fine posts, papers, and articles on trust. The more I read, the more I believe that trust is contextual – it has different meanings based on the situation one is trying to define it.
I’m curious in your response. Complete the sentence, “I define trust as…
Today I’ve been pondering a comment I overheard recently – “the internet is made up of only marketplaces and communities.” Okay, profound, but isn’t the real world made up of marketplaces and communities too?
Out of this background, I’ve been thinking about players who have successfully turned a marketplace into a community. Big sharing economy websites like Uber and Airbnb have created a situation where money is dealt with in advance, so the experience, when it occurs, goes from being transactional to social. When people act on a social level, they are more open with each other and can build relationships.
Is it as simple as the act of changing money that takes the joy out of experiences?
Boy, I’m glad I got that out of my system…
The Sharing Economy (or the Gig Economy, or the Collaborative Economy) is a model that’s disrupting inefficient industries in ways that provide a more convenient experience for the consumer and change the nature of work for the provider. The Economics and Statistics Administration of the U.S. Commerce Department issued a report in June 2016 defines this sector through the four following characteristics:
- They use information technology (IT systems), typically available via web-based platforms, such as mobile “apps” on Internet- enabled devices, to facilitate peer-to-peer transactions.
- They rely on user-based rating systems for quality control, ensuring a level of trust between consumers and service providers who have not previously met.
- They offer the workers who provide services via digital matching platforms flexibility in deciding their typical working hours.
- To the extent that tools and assets are necessary to provide a service, digital matching firms rely on the workers using their own.
As the implications of the sharing economy are being debated, one area is getting a good amount of focus from researchers and the press. It relates to whether the sharing economy is simply bringing more wage-earning opportunities to more people, or whether its net effect is the displacement of traditionally secure jobs and the creation of a land of part-time, low-paid work.
I believe it’s in this debate that reputation, of both the buyers and sellers, will prohibit a race to the bottom in terms of quality provided by the provider and lowest price provided by the buyer. In other words, a favorable provider reputation will extract value out of this efficient value chain through a higher demand for services which the provider can ask a higher price for than a similar provider with an unfavorable reputation or none at all. Conversely, a favorable buyer reputation will demonstrate value for the buyer through more options at a lower cost than a buyer with a limited or unfavorable reputation.
I think it’s time to explore the notion of online reputation. More to come.
“Character is like a tree and reputation is like a shadow. The shadow is what we think of it; the tree is the real thing.” – Abraham Lincoln
A week ago I wrote that the purpose of this blog is to explore personal data and the interplay of trust, privacy, reputation, and influence. Allow me to lead you down the path that sets the foundation for my work.
I believe that trust is the oil that will continue to lubricate the e-commerce engine. As this engine has transformed from an extension of the real world to a sharing or collaborative economy. In this transforming economy, more buyers want access to assets, not ownership of assets and sellers are willing to share their assets when not in use. Because assets in this economy can include skills and time, the sharing economy will require trust between strangers. The basis of this is an individual’s online reputation.
There are major privacy concerns that surround establishing and maintaining an online reputation. Much of what I have read about privacy falls into one of two themes. One is how to preserve as much of one’s privacy as possible, and the other is to call for us to ‘own’ our privacy through control of personal data. The implication being, “if I share my personal data with you, it’s worth something to you and I want a piece of it.” After working with this notion for awhile I’ve concluded that privacy is not the objective of personal data management. I believe the objective of personal data management is to build, nurture, and manage your reputation, especially your online reputation.
Influence is related to, but not equal to reputation. The waters are very muddy around this distinction in the online world, because many confuse the number of ‘likes’ or ‘shares’ with a numerical reputation score. “Likes’ and ‘shares’ are influencing mechanisms, not a reflection on the character, behavior, skills and results of an individual.
So why write about personal data privacy and reputation? Because in a sharing economy a person can leverage their reputation into real value in the form of more engagements at higher rates for sellers and better terms and more options for buyers.
I love my Amazon Echo. I don’t consider myself hip, but Christmas 2015 found an Echo under our tree and it has been an affair to remember. All the things it can do – play music tracks and radio stations, tell jokes, capture my shopping and to-do lists, answer trivia questions, wake me up, time my meals, hail an Uber, and control smart appliances – for me makes this device one of most indispensable items I own.
Voice assistants such as Alexa and Siri are changing the way we consume computing power. Apps are so 2013. Why get a reminder app when you can dictate your to-do’s to a list? Why have an app for every one of your favorite radio stations when you can call your station from Alexa? Why type when you can talk?
Talking is our natural means of communicating. Voice technology is the means toward transforming the way we interact with computers. This technology could make texting obsolete! (Pause for a minute to savor this future…) Fewer distracted drivers, more attentive students, less neck and thumb pain, not to mention more coherent messages.
Improvements in the technology and privacy issues aside, consumers will continue to adopt voice technology as it transforms the nature of computing and how we interact with our machines.
Subscriptions used to be related to magazines and newspapers. I oughta know – I haven’t met a business or news-related publication I didn’t like. It still take a tremendous amount of will power on my part to resist the temptation to add another rag to my mailbox. The trouble is I need to read, or at least look at, every page of every publication i’ve subscribed to, resulting in piles of publications…but I digress.
Subscriptions today have expanded both in the types of content available (think music and apps) and in the amount of content that can be purchased. A single song through iTunes, a single article from the Wall St. Journal, and a month of Microsoft Office 365 can now be had for a few bucks a month. These micropayments or low-value payments for goods or services are becoming increasingly prevalent for digital merchants and electronic payments providers.
Digital micropayments are on the rise because they have proven successful for digital music and app purchases. That’s led publishers of digital content, like news or video, to look at them as an alternative way to monetize content, particularly in the wake of rising
ad-blocker usage. The challenge for merchants is to entice enough consumers to adopt micropayments to lower the cost of processing these payments. Many consumers don’t like the idea of paying for small pieces of information such as an article.
I recall my last experience with this. I searched a term and found an article that was about 6 months old. I clicked on the link and saw the article for about 5 seconds before a pop-up window offered to display the article once I paid $0.99. I really wanted to see the article so I bit. I clicked on the link and was taken to a payment page that wanted enough information to check me into a hospital. (All information required, of course). After filling out the form and unchecking the numerous newsletter boxes from the publisher and its numerous affiliates, I was finally able to access the article. Not a good experience at all.
Publishers and app developers are working on this in the form of content aggregators such as Blendle, a Dutch platform that has buy-in from publishers across the industry and allows customers to pay per article within its own proprietary feed, has seen slow but steady growth. We will see more players develop models that integrate content and payments to gain the necessary buy-in from merchants and consumers alike to make the model more successful across the board.
On Wednesday, Amazon and JPMorgan Chase announced they have partnered to introduce a new Amazon Prime Rewards Visa Signature Card, which will be the first card to target members of Amazon Prime. For all credit card issuers not named Chase, it is a sad day. There is no more valuable partner for a credit card issuer than Amazon because Amazon Prime has a massive user base and these users spend more often than nonmembers.
Amazon Prime had 49.5 million members in the US alone as of Q3 2016, according to Cowen & Co. estimates. Amazon Prime members accounted for 57% of all Amazon purchases in October 2016, compared with 49% last year. Moreover, 83% of Prime members made a purchase in that period, compared with just 49% of non-Prime members.
Amazon Prime represents the future of loyalty programs – a subscription-based program with very rich benefits. Here’s the list:
- FREE Two-Day Shipping on eligible items to addresses in the contiguous U.S. and other shipping benefits.
- FREE Same-Day Delivery in eligible zip codes.
- Prime Now: Get FREE two-hour delivery or scheduled delivery on over 10,000 items, from groceries to electronics and more. Plus, get free delivery from your favorite local stores.
- Restaurant Delivery: Get FREE one-hour delivery from popular restaurants with Prime Now.
- FREE Release-Date Delivery: FREE Release-Date Delivery on eligible pre-order items delivered on their release date to ZIP codes within the continental U.S.
- Prime Video: unlimited streaming of movies and TV episodes for paid or free trial members in the U.S. and Puerto Rico.
- Prime Music: unlimited, ad-free access to hundreds of Prime Playlists and more than a million songs for members in the U.S. and Puerto Rico.
- Prime Photos: Secure unlimited photo storage and enhanced search and organization features in Amazon Drive for you and the members of your Family Vault.
- Prime Pantry: Access to Prime Pantry, where members can purchase and ship to addresses in the contiguous U.S. low priced grocery, household, and pet care items for a flat delivery fee of $5.99 for each Prime Pantry box.
- Amazon Elements: Access to Amazon Elements products, Amazon’s own line of everyday essentials.
- Amazon Dash for Prime: Never run out of your favorite products with Amazon Dash Button.
- Prime Early Access: Get 30-minute early access to Lightning Deals on Amazon.com.
- Kindle Owners’ Lending Library: access to members in the U.S.
- Prime Reading: You can borrow books, magazines, and more from the Prime Reading catalog and read them on your Fire tablet, Kindle e-reader, or the Kindle reading apps for iOS and Android.
- Kindle First: Early access for members in the U.S. to download a new book for free every month from the Kindle First picks.
- Audible Channels for Prime: Get access to Audible Channels, a $60/year value, for free. Audible Channels includes unlimited listening to original audio series and playlists handcrafted for every interest. You’ll also receive access to Prime Exclusive Audiobooks, a collection of streaming audiobooks including best sellers, family favorites, celebrity-narrated classics and more. Just download the free Audible app and sign in with your Amazon account to start listening.
- Amazon Music Unlimited: Prime members can get discounted Amazon Music Unlimited monthly plans and there are annual plans available exclusively to Prime members.
- Video Add-On Subscriptions: Members can purchase Video Add-on Subscriptions to premium content providers.
- Deals and Discounts, Compliments of Amazon Family: These include 20% off diapers through Subscribe & Save and 15% off eligible products from your baby registry.
- Twitch Prime: Members get exclusive discounts on physical games pre-orders and new releases. Twitch.tv users who link their Amazon Prime account get ad-free viewing on Twitch, a free Twitch channel subscription every month, and exclusive access to free game content.
Progressive retailers and financial institutions have begun to view Amazon as an asset rather than competition, because partnering and associating with Amazon significantly widens a brand’s potential audience, thanks to Amazon’s global reputation and customer base.
The future promises to be challenging for financial institutions that use products such as credit cards to re-enforce their brand as retailers emulate Amazon’s value proposition and utilize online technology that allow consumers to store card information on their website for convenience. With card credentials stored with retailers, consumers can avoid deciding which card they use for purchases at that retailer – the default card will win. Much to the chagrin of the financial institutions whose cards are left in their customer’s wallets.