3rd Party Dematerialisation and Rematerialisation of Capital

Lead Research Organisation: Brunel University
Department Name: Computer Science

Abstract

New forms of digital connectivity give rise to opportunities in doing financial transactions in different ways and with radically different business models that offer the possibility of transforming the marketplace. One area in the digital economy that has had such an effect is in the ways that users access and use digital banking and payment services. This move can be seen in the suggestion that highly digitally connected societies might even abandon the use of cash (e.g. Sweden), but has also resulted in the emergence of wholly mobile currencies (e.g. M-Pesa), mixed media currencies (e.g. Bristol and Brixton Pounds), and peer-to-peer moneylending (e.g. Zopa, prosper.com). These financial services dealing with money transfers bypass the traditional banking sector, and new players acting as financial intermediaries have begun to provide financial exchange services without directly acting as banks, i.e. as 'financial holding services'. A variety of different models to achieve this have emerged, often to meet the particularities of different market conditions and sectors. Understandably, these different services-and the different platforms they are built on-may be perceived by their users as offering different kinds of risk and utility to their traditional counterparts. The socio-digital systems that underlie these services form the focus of our enquiry. This research will explore how service presentation (comprising of the business model, information content and structure, and interaction design and data representation to users) impacts on their value, use and interpretation. This will involve data collection and participatory design exercises with two such financial services to understand the issues and difficulties that they and their users face in accessing and using these services. We will also work with these stakeholders to design and evaluate novel approaches and solutions that would be potentially useful to them. We will explore new opportunities to examine how their business models and technological solutions could be used to extend their services outside of their current product range. Finally, we will package our research findings in a form that is available and useful to other players wishing to enter this new and emerging economic environment.

Planned Impact

This research will benefit the developers of commercial and not-for-profit financial systems and content by providing an understanding of users' needs, their informational requirements and potential directions for the development of next-generation digital intermediaries. These include software platforms and content developers (e.g. Microsoft, Qoin.org, Socialtrade.org), and the financial intermediaries themselves (e.g. Zopa, Funding Circle, Prosper, Brixton Pound). These organisations will learn about the use of digital intermediary technologies in real world settings, and provoke them to think about novel forms for systems design, media content and delivery. As an output of this, end users will also benefit by its impact on service provision, through gaining better access to content and new forms of service that suit their needs.

Market regulators and governments would also be beneficiaries. These who wish to leverage these systems in supporting the economy will benefit from these in knowing more about user needs and expectations, and in the ways that these organisation manage and present their business and technology models to their users. In the UK, for example, there is little or no regulatory legislation regarding financial intermediaries, as they do not directly hold their customer's money. Whilst this is seen as largely beneficial by the organisations, there is a recognition, not least by the digital intermediaries themselves that this may not provide a stable environment for future service development and to support and guide new entrants into the market. We have also seen that governments (as recently has occurred in the UK) are beginning to see these type of organisations as offering opportunities for sustainable investment and in promoting economic growth in ways that the banks may fail to deliver. By exposing the ways that these organisations operate and how their technological infrastructures impact on patterns of use, we can provide knowledge that allows governmental departments to use this information to invest wisely and have the anticipated policy impact.

'Impact'-related information will be provided through a number of avenues. Most notably, where the impacts are relevant to the partner organisations, we will engage in regular meetings and workshops to discuss ongoing research. The organisations themselves will promote research findings through their trade bodies. For e.g. Zopa is a founder member of the UK's 'Peer 2 Peer Finance Association', an internet-based social lending trade body. Zopa has already costed project publicity into their letter of support, and are keen to do this. The Bristol Pound CIC are also interested in this and have been effective in communicating developments in their work, both as marketing publicity to their user-base and in directly working with their technology providers (Qoin.org and Socialtrade.org). The findings will be published in the academic literature, and whilst this is not perhaps the most effective form of dissemination to these organisations, internet search engines make locating this content increasingly easy for non-academic users; given the necessary technical specialism of the user-base for this material, an academic format should be relatively easy for them to make effective use of use. We will also be publishing (online and in print) and promoting a Digital Intermediary Exchange 'Toolkit. This is intended to be a substantial output of the research, using our case material and analysis to show best practice around how Digital Intermediaries can deploy their technical architectures to meet their business needs. This Toolkit will have sections supporting: i) digital intermediaries (best practice, infrastructure, user interaction, interface design), ii) trade bodies, regulators and legislators, iii) technology developers, iv) emerging technologies (mobile, ubiquitous, tangibles), v) business and financial management (new business models, market dynamics).

Publications

10 25 50
 
Description These are accessible on a dedicated website in detail (https://digitalintermediarytoolkit.wordpress.com):

"This web-based toolkit reports on how social, organisational and technical infrastructures augment and assist users and businesses in making financial decisions, and how new technologies might change the use, utility and nature of this activity. To do this, we draw from the detailed analysis of case studies carried out in two retail digital financial intermediary organisations: Zopa Limited and the Bristol Pound. Its purpose is to serve as a 'toolkit' for those interested in the key issues impacting the design and use of innovative financial products."

"Given the rapidly changing technological landscape and the accompanying new forms of digital connectivity, we need a better understanding of how to innovate for consumer-level financial transactions and methods of financial exchange. Examining the social, organisational and technical infrastructures underlying interactions around novel digital financial products, this toolkit offers practical insights into the design of digital financial services to make them easier to understand and use, more trustworthy, accessible, and socially useful. Novel technologies will continue to transform the relationship between users and digital financial intermediaries, opening up new services and new ways for users to benefit from them. Our own research identifies a number of forces that future innovators are likely to need to be prepared to harness for competitive advantage"
Exploitation Route The development of user experience design for financial services and alternative money systems.
Sectors Communities and Social Services/Policy,Creative Economy,Digital/Communication/Information Technologies (including Software),Financial Services, and Management Consultancy,Retail

URL https://digitalintermediaries.wordpress.com
 
Description Contacted by a variety of people from tech industry (eg. Intel), fintech (eg. Orca Money) User Experience (eg. bynd.com) about our findings. Findings have also been used internally by our research partners, Zopa Ltd. and the Bristol Pound CIC.
First Year Of Impact 2014
Sector Creative Economy,Digital/Communication/Information Technologies (including Software),Financial Services, and Management Consultancy
Impact Types Cultural,Societal,Economic

 
Description Contributor and document reviewer for parliamentary briefing paper (Parliamentary Office of Science and technology)
Geographic Reach National 
Policy Influence Type Participation in advisory committee
URL http://www.parliament.uk/briefing-papers/POST-PN-475.pdf
 
Description Input into national blockchain policy
Geographic Reach Multiple continents/international 
Policy Influence Type Citation in other policy documents
Impact Impact on international and UK regulatory environment on transactions, and on UK research policy
URL https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0ahUKEwjJ2oel-vPRAhWjLMAKHcA_C...
 
Description Organising policymaker/practitioner event at Royal Society (Digital Change Symposium)
Geographic Reach National 
Policy Influence Type Influenced training of practitioners or researchers
 
Description Applications of Distributed Ledger Technology
Amount £748,642 (GBP)
Organisation RCUK Digital Economy Theme (DET) 
Sector Public
Country Unknown
Start  
 
Title participatory financial technology design 
Description Development of participatory methods to allow users explain, design and evaluate financial technologies. 
Type Of Material Model of mechanisms or symptoms - human 
Year Produced 2015 
Provided To Others? Yes  
Impact very recent development - as yet no notable impacts - yet. 
URL https://digitalintermediarytoolkit.wordpress.com/methods/
 
Title Peer-to-peer financial service design 
Description Early stage probe/prototyping of novel financial services. 
Type Of Technology New/Improved Technique/Technology 
Year Produced 2015 
Impact Currently being considered for candidate adoption by partner organisations (Bristol Pound CIC, and Zopa Ltd.) 
URL https://digitalintermediarytoolkit.wordpress.com/design-concept-storyboards/
 
Description Reconfiguring Peer to Peer Finance: From Technological Play to Sensible Saving 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach Regional
Primary Audience Other academic audiences (collaborators, peers etc.)
Results and Impact Talk sparked questions and discussion afterwards

Increased interactions with peers and potential co-applicants and co-authors.
Year(s) Of Engagement Activity 2014
URL https://app.box.com/s/1ul1ejsbtxozg2u0knjl
 
Description journalism on new media and 'financialisation' 
Form Of Engagement Activity A magazine, newsletter or online publication
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Public/other audiences
Results and Impact article shared multiple times on twitter by significant players in this area (eg. New Economics Foundation).

social media interest.
Year(s) Of Engagement Activity 2014
URL http://theconversation.com/online-finance-should-be-the-next-concern-not-spying-bins-25127
 
Description journalism on social media in finance 
Form Of Engagement Activity A magazine, newsletter or online publication
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Media (as a channel to the public)
Results and Impact Shared by 50+ people on twitter - a significant amount in its 6 months since publication

widescale social media sharing
Year(s) Of Engagement Activity 2014
URL http://theconversation.com/nothing-is-private-once-facebook-gets-into-your-wallet-25677
 
Description public talks (cafe scientifique) 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? Yes
Geographic Reach Local
Primary Audience Public/other audiences
Results and Impact Lots of interesting questions and debate from the general public, feeding back into our own thinking about the topic and communicating the work, as well as in broad dissemination of research outside academe and institutional environments.

30 min talk followed by 70 mins of questions - lots of interest in the future of money and statements raised by the audience about their increased understanding of what money is - and could be.
Year(s) Of Engagement Activity 2014
URL https://fbcdn-sphotos-d-a.akamaihd.net/hphotos-ak-xfp1/v/t1.0-9/10404456_912762322086877_89522255231...
 
Description symposium talk 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Other academic audiences (collaborators, peers etc.)
Results and Impact Talk sparked questions and discussion afterwards

academic interest and questions about future funding possibilities.
Year(s) Of Engagement Activity 2014
URL http://bobjessop.org/2014/05/16/the-details-of-the-fourth-cultural-political-economy-workshop/
 
Description video production - Zopa digital infrastructures 
Form Of Engagement Activity A magazine, newsletter or online publication
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact Just up online - too early to say impacts yet.
Year(s) Of Engagement Activity 2015
URL https://youtu.be/UzQNg2qKEmQ
 
Description video production - slow payments 
Form Of Engagement Activity A magazine, newsletter or online publication
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Media (as a channel to the public)
Results and Impact Video has been passed on to media bodies by the university PR bodies at Brunel and Bristol Universities.

Picked up by online media outlets, with a number of online articles on the project.
Year(s) Of Engagement Activity 2014
URL https://youtu.be/VpAPRgLg7s4