Major social media platforms like Facebook, Instagram, Twitter, Wechat,and even Whatsapp have the potential to offer financial services products in a way that is tailored to our specific needs and de-risked in a way that has previously not been possible. As these platforms can access such rich data, they could compute the lifetime value of a portfolio of financial products, informed by our spending patterns, by the week-to-week, year-by-year calendar of our disposable income and the behavioural traits that determine our ability to save or service our debts. And, they could even extend these products to our families and communities, at a potentially lower rate due to a ‘community risk’ profile.
A decade ago Sean Park, author of the influential Park Paradigm blog, mooted the spawning of AmazonBay, a fictional global financial market exchange formed from the merger of Ebay and Amazon. Park, who went on to co-found Anthemis Group, the digital financial services investor and advisory company, saw the potential for a two trillion dollar organisation surpassing all others in scale and disruptive capability. AmazonBay, the world’s largest corporation by market capitalisation, was to be many things, acquiring lesser trading exchanges and virtual economies and creating a platform for the kind of big-time financial intermediation previously the preserve of the investment banks.
… if we think about smart contracts being computer protocols that facilitate, verify, or enforce legal contracts or rights, they can easily emulate the logic of contractual clauses, with the capacity to make them self-executing or self-enforcing when certain conditions are met. Arguably, they can be more secure than traditional contract law. If you then combine the potentially incorruptible rigour of smart contracts with the transactional transparency enabled by blockchain technology, the possibility, and indeed benefits, of DACs starts to emerge. Blockchains bring a level of transparency and resilience to transactions that were previously opaque. And it isn’t necessarily Artificial Intelligence we should fear. Until AI reaches the point of criminal self-awareness, it’s hard to see a computer committing grand scale financial fraud or manipulating libor.