The Crowd in Finance is 1% integrated


Crowdfunding, and Crowdsourcing insights, information, services is nothing new. Fintech themed Scrabble boards (anybody working on one?) could allow players to use names of companies in this broad area.

Tipranks, SharingAlpha – investing

Kickstarter, Indiegogo – funding

OpenideoYambla – ideation

Daemo, Aragon – governance

Wikipedia, Reddit – knowledge

There are hundreds of variations of businesses that position themselves as platforms with the crowd being both a supplier and a client. From providing knowledge to consuming knowledge. From voting about future developments to being a “community member” living under that “constitution”. From designing the idea, to using the final product/service. From funding a project/service, to being an ambassador of it. From evaluating an investment to investing in it.

The possibility of tokenization of financial assets (equity, debt, any financial contractual arrangement), of all sorts of illiquid real assets (real estate, diamonds, and luxury items), and of intangible items (reputation, identity, and social goodness); is blurring further the lines of conventional concepts and frameworks and aiming to involve the crowd in a different way.

The fact, however, is that we, the market, has not yet fully embraced and integrated neither platformification nor a crowd balanced approach. As the motto of 11FS goes “Digital Banking is 1% done”. No neobank or challenger bank has managed yet to be a full crowd brainchild – despite efforts to crowdsource its design, its products, its business development (e.g. Tandem Bank). Banking as a service is nowhere close to being the dominant business model/technology.

We are still in a state of pushing banks to collaborate with crowd-centered unbundled solutions and to integrate them as a digitization facelift rather than at their core. Even banks that launch their own crowdfunding platforms (e.g. Triodos Bank[1], in the UK) or their own crowdinvesting robo platforms (e.g. CleverCircle[2] from Bank CIC Switzerland) are the exceptions rather than the norm.

The market has no strategic plan around a decentralized approach that has end customers being also suppliers. The involvement of the crowd is not built-in, with optionality and incentives. The reason is that the market is still soul searching to find the “what is a bank”, “what is the value of the “professionals””, and “how to serve customers”.

The market feels like a crowd with no choreography that will incentivize each participant to move in the “appropriate” position, so that it all looks and feels like a live and coordinated design.

Crowd people

[1] TriodosCrowdfunding, is an impact investing crowdfunding platform from Triodos Bank, the sustainable banking pioneer.

[2] CleverCircle, is a robo-advisory platform on which investors and professionals, get rated and earn points.

Efi Pylarinou is a Fintech thought-leader, consultant and investor. 

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One comment

  1. Triodos looks really interesting. I think people care about the impact of their money.

    One area where I think crowd has gone beyond 1% is Angel List Syndicates. VC will never be the same ie tipping point has been reached in this sector of the market

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