digital intermediary exchange ‘toolkit’
TRANSCRIPT
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DEPLOYING, INNOVATING AND DISRUPTING–DESIGNING DIGITAL INFRASTRUCTURES FOR ALTERNATIVE FINANCIAL SYSTEMS LESSONS FROM THE 3DaRoC PROJECT 3rd Party Dematerialisation and Rematerialisation of Capital: designing and innovating credible digital intermediaries in the personal financial marketplace
digital intermediary exchange ‘toolkit’
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Auth
ors
Mar
k Pe
rry, J
ohn
Carte
r McK
nigh
t,
Jenn
ifer F
erre
ira a
nd A
dam
Fish
Ta
ble
of C
onte
nts
! Executive!Su
mmary:!Digita
l!Intermed
iary!Excha
nge!‘Too
lkit’!..................!5!
1.!In
trod
uctio
n!!.............................!7
!!
Digita
l!unb
anking
!!.............................!7
!!
Digita
l!intermed
iarie
s!!.............................!8
!!
Aims!an
d!Orie
ntation!
!.............................!9
!2.!In
tend
ed!Aud
ience!an
d!Scop
e!!...........................!11!
3.!Case!Co
ntexts!
!...........................!13!
!Ca
se!1:!T
he!Bris
tol!P
ound
!!...........................!13!
!Digita
l!interactio
ns:!D
igita
l,!Mob
ile!M
oney!
!...........................!13!
!Ca
se!2:!Zop
a!!...........................!14!
!Digita
l!interactio
ns:!p
eerPtoPpee
r!len
ding
!!...........................!14!
4.!M
etho
ds!
!...........................!17!
!Pa
rticipan
ts!
!...........................!17!
!Re
search!th
roug
h!de
sign
!!...........................!17!
6.!Elemen
ts!of!D
esign!
!...........................!18!
!Section!I.!Archite
ctural!Factors:!u
ser%interactio
ns%&%com
puter%
interfaces%|%se
rvice%archite
ctures:%centralise
d%vs.%distrib
uted%|%
commod
itisatio
n%&%fina
ncialisation%|%tran
sparen
cy%&%opa
city%|%
tang
ibility%&%th
e%material%of%transactio
n%|%lega
cy%platfo
rms%a
nd%
infrastructures+|+inform
ation,+m
etric
s+&+user+fee
dback+
!Section!II.!Firm
,!Users!&!Techn
olog
y:+so
cial%co
nnectiv
ity%|%m
embership,%
bran
d%affin
ity%and
%collective%identity%|%user%trust%|
%risk%&%m
itiga
tion%|%
regu
latio
n%&%fina
ncial%ecologies%+
7.!Future!Outlook
!!...........................!33!
© T
he A
utho
rs, 2
015
! ! !3
WHO? This Report has been produced by the 3DaRoC project partners (Brunel, Lancaster and Bristol Universities), in collaboration with the Bristol Pound Community Interest Company and Zopa Ltd. The remit of the 3DaRoC project is to explore digital connectivity and peer-to-peer relationships in financial services. In the light of ongoing challenges in the UK and world financial sectors, innovations aimed at reducing systemic risk and rebuilding trust in financial services and their providers are urgently needed. At the same time, the increasing penetration and take-up of robust high-speed networks, dependable peer-to-peer architectures and mobile multimedia technologies enable novel platforms for offering financial services to current and new users. These 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 key area of transformation in the digital economy involves retail-level digital banking and payment services. The impact of the new economic models presented by these digital financial services is yet to be fully determined, but they have huge potential as disruptive innovations, with a potentially transformative effect on the way that services are offered to users. Little is understood about how technical infrastructures impact on the ways that people make sense of the financial services that they use, or on how these might be designed more effectively. 3DaRoC is exploring this space by working with our partners and end users to co-design and evaluate new opportunities for online, mobile, ubiquitous and tangible technologies, exploring how these services might be extended, and offering insights for regulators, innovators, designers, and end-users of disruptive financial technologies. The 3DaRoC project is funded by the UK’s Digital Economy ‘Research in the Wild’ theme (grant no. EP/K012304/1). Find out more about the 3DaRoC project on our website: http://digitalintermediaries.wordpress.com
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WHAT?
Executive Summary: Digital Intermediary Exchange ‘Toolkit’ The UK economy has a huge dependence on financial services, and this is increasingly based on digital platforms. Innovation in consumer financial services through the use of digital technologies is seen as increasingly important for market growth, efficiency, and user empowerment. These new digital solutions may allay an over-reliance on the traditional banking sector, which has proved itself to be unstable and risky, and we have seen a number of national policy moves to encourage growth in this sector. Partly as a result of the 2008 banking crisis, there has been an explosion in digitally-mediated peer-to-peer financial services for consumers, rather than professional financial managers. Firms in this area act as intermediaries between users looking to trade goods or credit rather than as depositories or investors. Although their businesses are not always purely computer-based, these services are made possible through digital technologies that allow these organisations to act as intermediaries between users looking to trade goods or credit – we call these organisations ‘digital intermediaries’. However, building self-sustaining or profitable financial services within this novel space can be fraught with commercial, regulatory, technical and social problems. This document 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. For more information, please contact:
Dr Mark Perry Reader, Department of Computer Science Brunel University, London, UK UB8 3PH [email protected]
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1. Introduction Digital unbanking Financial systems have long relied on digital technology, but since the financial downturn, we have seen a rush of activity around organisations operating outside of the traditional banking system utilising digital financial technologies (‘fintech’). We might call this process ‘digital unbanking’, as it is often driven by organisations and people that seem to draw more from the software industry or community-based organisations than the financial services industry. This process of unbanking has largely been built on what has become known as ‘peer-to-peer’ systems, which allow users to interact and transact with one another directly. This revolution has been made possible by this dematerialization of money into new digital forms and media allowing it to be handled and processed in entirely new and different ways – through software. This process of software driven change is underway in many traditional industries, famously commented on by Netscape’s co-founder and Silicon Valley entrepreneur, Marc Andreessen, in the Wall Street Journal, where he describes how Software is Eating the World: ‘Software is also eating much of the value chain of industries that are widely viewed as primarily existing in the physical world…. The financial services industry has been visibly transformed by software over the last 30 years. Practically every financial transaction, from someone buying a cup of coffee to someone trading a trillion dollars of credit default derivatives, is done in software. And many of the leading innovators in financial services are software companies….’ This change in financial service from what was considered as a market with extremely high barriers to entry now has the potential to be violently disrupted by new entrants, building on software. Some of these new financial services will be based on their own, proprietary systems, but in other cases, these may be provided by the expanding open source software movement. This move towards software-driven financial entrants is exacerbated by two parallel developments: big data and rapid hardware innovations. The ability to collect and mine big data to generate a better understanding of their users and customer base (habits, interests, social interactions, and their behavioural, purchasing and other financial patterns of activity) will provide unique opportunities to serve or capitalise on this in providing highly targeted and customised products or services. Rapid hardware changes are
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also crucial to people’s future financial activities. At a consumer level, we have seen development in high-bandwidth internet connectivity, powerful smartphones with rapid wireless networking, and a move towards tablet and app-based interactions in place of the PC, all of which have shifted the ways that people are choosing to access financial services. In the not so-distant-future, sensor-based systems, biometric security, powerless, disposable and new device form factors, all potentially giving rise to a very different set of context-sensitive service offerings and further fracturing of the existing financial ecology. Some of these financial services may replace existing products, others complementing them, and yet others, as we have seen in other software industries, potentially radically transforming the landscape and rendering our conventional ideas about financial services as redundant. All of this is taking place in a regulatory setting that, in part, shapes, and is shaped by, these technologies; this is not just a problem for organisations (ie. finance and tech developers) to understand and deal with, but is also one that governance and regulatory bodies will have to comprehend and grapple with. Digital intermediaries Managing the complexity of these ‘unbanking’ financial interactions are digitally-based intermediary organisations that connect users together and provide the infrastructures for capital flows and exchange. Such ‘digital intermediaries’ are peer-to-peer organisations that allow citizens to exchange ‘e-money’ in transactions that bypass the banks, and which offer different business opportunities to their proprietors that open up different ways that their users can benefit from them. These will be commercial and non-governmental organisations managing complexities previously handled by the banks, such as transactional protocols, ledger balancing, and risk. While it is technology that has created these new opportunities, examining the technologies by themselves is unlikely to lead to the much-touted transformed financial systems of the future – these disruptive technologies are enabled by social, organisational, legislative, commercial and financial infrastructures. Learning about the role and implementation of these technologies in the wild is necessary if we are to build momentum in developing these organisations - digital intermediaries - into a new financial force that will open up new and empowering opportunities for interacting around and transacting with money. This is an open issue at the moment, and one that is ripe for development – how we go about designing, implementing, managing, evolving, and regulating these kinds of digital intermediaries.
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Aims and Orientation While the area of emerging ‘alternative’ financial services and technologies is acknowledged as being increasingly important, little is understood about how technical infrastructures impact on the ways that users make sense of the financial services that they use, or on how these might be designed or regulated more effectively. The aim of our work has been to evaluate the role of infrastructural designs and its effects on the patterns of use of financial services provided by digital intermediaries. This document is the culmination of our work on the socio-digital systems that underlie these new and emerging digital intermediary services. In it we attempt to explain, in as simple and succinct a way as possible, how service presentation – comprising of the business model, information content and structure, and interaction design and data representation to users – impacts on the value, use and interpretation of digital intermediaries. Alongside this, we offer insights into the design of current and novel infrastructures and technology for digital intermediaries that are grounded in applied examples of use, showing the impact that these are likely to have and to whom these issues should be of concern to.
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2. Intended Audience and Scope This document presents concepts and concerns emerging from the 3DaRoC project’s case material – issues that have arisen out of real-world situations, grounded in empirically-derived evidence. Our intention is to package this in a digestible way for organisations planning to enter this space as well as other stakeholders – financial technology developers and designers, financial entrepreneurs, interaction designers, financial theorists, social entrepreneurs, digital currency thinkers, legislators and members of governance and regulatory bodies, rather than for academic researchers. Our purpose is to highlight the infrastructural and service design issues that underlie the digital exchanges between individuals, the devices used in the transaction, and the interconnections between the human and digital networks enabling digital exchange. Our intention is that it will be used as a reference ‘toolkit’ for people involved in the design, management, implementation and regulation of such ‘digital intermediary’ systems, allowing readers to identify key issues, and to consider how they will impact on service design, growth, and the future of the technologies through which money is dematerialised into cyberspace or made material again from its digital forms. The toolkit therefore presents a succinct synthesis of the issues that we have uncovered and the kinds of conditions that these problems and novel patterns of use may occur under. Our work has resulted in the exploration of simple examples of digital technology, and we examine how these exploratory technologies offer potential solutions, or introduce their own problems. We identify the interdependencies between these concerns to shed light on the relationships between issues and to alert the reader to potential impacts from other issues. The intended audience for this toolkit include those working in the finance and fintech, particularly those whose roles cross finance and technology development or deployment. We anticipate that entrepreneurs will also find this material useful, as it connects across business models, perceptions of financial products, and settings of use, showing elements that may need to be considered when innovating new financial products and services around these interrelated components. Although we have not targeted this toolkit at them, academic researchers may also find this work relevant, especially those whose backgrounds are not directly in digital or computer technology. In short, this toolkit is likely to be of relevance any of those who need to consider designing, implementing, managing, evolving, or regulating these kinds of services.
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3. Case Contexts The toolkit relies on two real cases that allow us to derive empirically supported design outcomes from. This section summarises the details of these two cases so as to contextualise and make clearer sense of the elements of design that follow. Case 1: The Bristol Pound The Bristol Pound (£B) is a local complementary currency in use in Bristol, England (Population: 432,500; the 6th largest city in England). It was launched by the Bristol Pound CIC (Community Interest Company) in September 2012 and as of March 2015, there were approximately half a million Bristol Pounds in circulation with over 750 businesses accepting the currency. £1 sterling is equivalent to £B1 and businesses in the city trade in £B on a voluntary basis. The currency is both paper-based and digital. Transactions occur in printed notes (in denominations of £B1, £B5, £B10 and £B20), SMS on any mobile phone, or online via an electronic account similar to a bank account. Printed notes are accessed from a number of businesses at various locations in the city (known as cash points). Digital payments (by SMS and online) require an electronic £B account. Eligibility to open an electronic account is granted by the Bristol Pound CIC, subject to certain rules based on membership type, which differs for ordinary members and ‘traders’, who sell products or services. Ordinary members can exchange sterling for £B notes free of charge, but once sterling has been exchanged for £B notes, the notes cannot be exchanged back into sterling; traders can exchange electronic £B for sterling, by withdrawing £B from an account as sterling, but this incurs charges and is discouraged. Administration of the £B occurs through the Bristol Pound Community Interest Company (CIC), a not-for-profit company incorporated on 16 August 2010. The CIC have physical premises in the centre of the city of Bristol from where a team conducts the day-to-day tasks of running the currency. Digital interactions: Mobile, Digital Money: Txt2Pay The platform enabling Bristol Pound members to conduct transactions via SMS is called Txt2Pay (T2P). It is implemented on the Cyclos platform
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(cyclos.org), which is widely used for mobile and online banking by commercial banks internationally, as well as social enterprises such as the Bristol and Brixton pounds. T2P is a type of mobile money transfer in which business and individual members can exchange electronic £B, irrespective of their mobile network operator. There is one mobile phone number to which all SMS payments are sent. When a member pays another member by sending an SMS text message, the payer transfers the amount in electronic £B from their account to the payee’s £B account. SMS texts are charged by mobile network operators at their standard rates and the payee incurs charges when receiving electronic £B via T2P. Case 2: Zopa Zopa, Limited is a London-based peer-to-peer lending firm, established in 2005. As of March 2015, Zopa has enabled lending of over £784 million by over 59,000 individual lenders to more than 100,000 borrowers. The firm acts as an intermediary between individual potential borrowers and lenders of money. Unlike banks, Zopa does not hold deposits, and does not act as a party to loan transactions, which are unsecured contracts between individual borrowers and lenders and not banking deposits qualifying for the Financial Services Compensation Scheme (governmental deposit insurance). Zopa maintains no retail offices: all transactions take place via its website, zopa.com. Over the course of its lifespan, Zopa’s underlying lending business model has remained largely stable, although it has matured in significant ways that are perhaps most evident in it’s simplifications around its interactive tools that match lenders to borrowers and the rates that they apply. Zopa is regulated by the Financial Conduct Authority. Digital interactions: peer-to-peer lending In order to request a loan, potential borrowers submit an online application and are graded by risk by the credit reference agency Equifax. Manual underwriting checks are made by Zopa staff in addition to evaluation by a proprietary risk-assessment algorithm. Loans are currently available only in two terms: 2 to 3 years and 4 to 5 years. After making its underwriting checks, Zopa’s software matches loan requests with lender funds, which automatically create a “basket” of segments of loans of varying risk, return, and term to create a standardized instrument for lenders which reduces the impact of any potential borrower default on any one lender and enables the offer of a fixed return on investment to lenders.
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The firm’s income is largely generated by an annual fee to lenders and a fee to borrowers built into the pricing of the loan. A portion of the borrowing fee is paid into the “Zopa Safeguard Trust,” a self-insurance scheme for defaults, with current trust assets of over £7.5 million. In case of borrower default, the lender assigns the loan contract to a separate firm, P2PS Trust, and may make a claim upon the trust for principal and interest due. If the Trust denies the claim, it will undertake collections efforts pursuant to the loan contract, paying a portion of amounts collected back to the initial lender. For the purposes of this document, these are highly summarised details, but a comprehensive set of details can be found in two additional documents. The first of these documents describes their technical infrastructures and their role in building business models (covering digital innovations and financial practices). The second document reports on how these infrastructures are practically used and understood, pulling from our own research on how their various users value, use and interpret these digital intermediary infrastructures. D1. Putting the ‘digital’ in Digital Intermediaries: the role of technical infrastructure in building business models. http://tinyurl.com/pyfg8uf D2. Interpreting infrastructure: Defining user value for digital financial intermediaries. http://tinyurl.com/q8668ox
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4. Methods ! This toolkit is the outcome of a programme of systematic studies run over approximately a fourteen-month period from October 2013 through January 2015 in which research teams from Lancaster University examined Zopa and Brunel University focused on the Bristol Pound. Extensive interviews, document analysis, questionnaires, observation of user interactions, and other participatory design methods were employed to investigate the ways that digital technologies were used in making exchanges through digital intermediaries. Our inquiries focused on the uses, resources, challenges, values, interpretations, roles and problems of using technology in accessing the financial services under investigation, which resulted in quantitative and rich qualitative data for all aspects surrounding the use of these systems. Participants Our studies involved extensive engagement with the two partner organisations involved – Zopa and the Bristol Pound CIC – and their representative users through attending meetings, social events and visits to their premises. This toolkit synthesises data drawn from individuals across a range of backgrounds, age groups and income groups, and split evenly across gender. Participants included users, business owners, managers, technical leads, and administrators. Research through design In combination with our empirical data, we worked with the end users in a number of participatory design workshops to iteratively develop design ideas and gain further insights into the financial service design space. In these workshops we explored the use of early-stage technology ‘probes’ to better understand our user groups, the settings they are used in, the computational characteristics and physical form of the technology, and its interaction design, in concert with the organisations’ business concerns. Through these workshops we were able to enrich our understanding of the issues surrounding the use of digital intermediaries in ways that studying existing practice could not. This provided rich insights into the challenges and opportunities for the providers and users of digital financial services. The full documentation on this set of design workshops, their analysis and prototype designs can be found in an accompanying document: D3. Participatory Design of Digital Intermediaries . http://tinyurl.com/ovlwgku
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Sect
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I. Ar
chite
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acto
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USE
R IN
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th
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ter’s
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with
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unde
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ser i
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ay th
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ns o
f the
se
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es: W
e ha
ve o
bser
ved
how
com
pute
r in
terfa
ces
shap
e us
er’s
inte
ract
ions
with
the
syst
em a
nd h
ow th
is im
pact
s at
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ndam
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ith th
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cces
s of
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ive
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cial
se
rvic
es, i
n th
eir t
ake-
up, o
n-go
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of
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and
per
cept
ions
of v
alue
. Tra
de-o
ffs e
xist
be
twee
n in
tera
ctio
nal f
lexi
bilit
y an
d bu
sine
ss
mod
els.
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incr
ease
d up
take
of m
obile
s an
d ta
blet
s ho
lds
chal
leng
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r use
r int
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e.g
. the
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and
un
expe
cted
con
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issu
es.
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ditio
ns: U
ser i
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face
s m
ay s
uppo
rt a
one-
to-o
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latio
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p be
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nd s
ervi
ce, o
r on
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latio
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ps w
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ther
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or fi
nanc
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ervi
ce o
pera
tions
that
ta
ke p
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with
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use
r int
erfa
ces
may
nee
d to
sup
port
both
pub
lic a
nd s
ecur
e in
tera
ctio
ns
sim
ulta
neou
sly.
In
terd
epen
denc
ies:
Tra
nspa
renc
y an
d op
acity
; us
er tr
ust.
Cas
e ex
ampl
es:
The
user
inte
rface
to th
e m
obile
£B
trans
actio
n is
th
e st
anda
rd m
obile
tele
phon
e SM
S te
xt
mes
sagi
ng a
pplic
atio
n. T
his
choi
ce a
llow
s pi
ggyb
acki
ng o
n an
exi
stin
g se
rvic
e, b
ut li
mits
fle
xibi
lity
and
cont
rol.
How
ever
, use
r int
erac
tion
is n
ot to
tally
det
erm
ined
by
the
exis
ting
SMS
appl
icat
ion
inte
rface
, but
als
o in
par
t by
the
form
at o
f the
pay
men
t tex
t ent
ered
(in
turn
de
term
ined
by
the
softw
are
that
han
dles
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trans
actio
n), a
nd th
e w
ay th
at fe
edba
ck a
rrive
s (a
n SM
S m
essa
ge) f
or b
oth
cust
omer
and
trad
er,
deliv
ered
ove
r the
mob
ile n
etw
ork.
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s pr
ovid
es
a de
gree
of c
ontro
l for
use
rs in
mak
ing
paym
ents
(a
t the
exp
ense
of m
akin
g er
rors
), an
d in
vie
win
g th
e ou
tcom
es o
f act
ions
via
SM
S fe
edba
ck (a
t th
e ex
pens
e of
net
wor
k la
tenc
y or
failu
re).
Issu
es
aris
ing
from
the
mob
ile £
B tra
nsac
tion
impa
cted
on
the
form
of f
ace-
to-fa
ce in
tera
ctio
ns, o
ften
rely
ing
on s
ocia
l int
erac
tions
to re
solv
e. T
he
resu
lting
soc
ial i
nter
actio
n w
as s
een
posi
tivel
y by
the
£B a
s it
was
hel
ping
to b
uild
a u
ser
com
mun
ity.
Zopa
’s in
terfa
ce d
esig
n is
con
stan
tly s
hifti
ng. I
ts
curre
nt g
oal i
s to
look
less
like
a h
igh-
tech
sta
rt-up
, whi
ch m
ight
app
eal t
o a
youn
ger a
nd
tech
nolo
gica
lly s
ophi
stic
ated
dem
ogra
phic
, to
be re
assu
ring
to o
lder
cus
tom
ers
that
may
be
less
com
forta
ble
with
onl
ine,
alte
rnat
ive
finan
cial
se
rvic
es. I
ts in
terfa
ce im
med
iate
ly s
epar
ates
bo
rrow
ers
and
lend
ers:
the
user
inte
rface
for
borro
wer
s fo
cuse
s on
pric
e of
fund
s, th
e ab
ility
to p
repa
y w
ithou
t pen
alty
, and
the
cred
it ev
alua
tion
proc
ess.
By
cont
rast
, the
use
r in
terfa
ce fo
r len
ders
is d
esig
ned
arou
nd a
m
essa
ge o
f tru
stw
orth
ines
s: in
the
firm
, in
the
tech
nolo
gy, a
nd in
the
borro
wer
s. T
his
mes
sage
is
con
veye
d vi
a de
sign
ele
men
ts in
clud
ing
page
la
yout
s an
d pa
ge fl
ow, e
ndor
sem
ents
from
finan
cial
med
ia, a
nd m
essa
ges
from
oth
er
lend
ers,
des
igne
d to
cre
ate
a se
nse
that
the
pote
ntia
l len
der i
s pa
rt of
a g
roup
of s
avvy
and
pr
uden
t inv
esto
rs.
Impl
icat
ions
: Int
erac
tion
desi
gner
s: fo
r the
al
tern
ativ
e fin
anci
al s
ervi
ces
disc
usse
d in
this
to
olki
t, th
e fo
rm o
f use
r int
erac
tions
will
ofte
n w
holly
sha
pe u
sers
’ exp
erie
nce
of th
e pr
oduc
t an
d m
ay h
elp
dete
rmin
e th
e us
ers
them
selv
es.
Com
pute
r int
erfa
ces
may
dem
and
diffe
rent
le
vels
of t
echn
olog
ical
com
fort
and
liter
acy,
may
be
mor
e or
less
tran
spar
ent r
egar
ding
the
wor
king
s of
the
syst
em, a
nd m
ay s
hape
cu
stom
er d
emog
raph
ics,
inte
ntio
nally
or
othe
rwis
e, b
y ac
com
mod
atin
g or
cha
lleng
ing
youn
ger o
r old
er u
sers
. Diff
eren
t tec
hnic
al
plat
form
s (e
.g. w
eb a
cces
sed
via
PC o
r mob
ile,
or v
ia a
mob
ile a
pplic
atio
n) c
an p
rovi
de a
di
ffere
nt s
et o
f exp
erie
nces
and
/or p
robl
ems
for
user
s. G
ood
inte
ract
ion
desi
gn n
eeds
to
cons
ider
wha
t kin
d of
ser
vice
pro
vide
rs w
ould
lik
e us
ers
to e
xper
ienc
e, a
nd h
ow th
ey w
ould
like
th
em to
use
it. H
owev
er, f
or le
gisl
ator
s an
d re
gula
tors
, fin
anci
al d
iscl
osur
e re
gula
tions
de
velo
ped
for p
rint m
edia
, whi
ch m
ay in
clud
e de
taile
d re
quire
men
ts a
s to
type
face
, ca
pita
lisat
ion,
and
loca
tion
may
pre
sent
ch
alle
nges
for a
pplic
atio
n to
dig
ital m
edia
, es
peci
ally
mob
ile. W
hen
poss
ible
, dire
ct
nego
tiatio
n be
twee
n re
gula
tors
and
firm
s sh
ould
be
enc
oura
ged,
bea
ring
in m
ind
the
diffe
rent
af
ford
ance
s of
prin
t an
d di
gita
l com
mun
icat
ions
. !
!
SER
VIC
E AR
CH
ITEC
TUR
ES:
CEN
TRAL
ISED
VS.
DIS
TRIB
UTE
D
Def
initi
on: S
ervi
ce a
rchi
tect
ure
desc
ribes
the
orga
niza
tion
and
the
impl
emen
tatio
n of
ser
vice
s;
serv
ices
may
be
acce
ssed
from
a s
ingl
e po
int
(e.g
. a w
ebsi
te) o
r dis
tribu
ted
acro
ss a
var
iety
of
oper
atio
nal (
e.g.
diff
eren
t fun
ctio
ns fr
om d
iffer
ent
site
s) a
nd p
hysi
cal n
odes
(e.g
. phy
sica
l lo
catio
ns, m
edia
or d
evic
es).
Serv
ice
arch
itect
ure
desi
gns
may
trad
e of
f ava
ilabi
lity,
cos
t, sp
eed,
qu
ality
, rel
iabi
lity,
sta
ndar
ds, s
cala
bilit
y, a
nd
capa
city
. Is
sues
: The
mix
of t
echn
olog
ies
and
peop
le
deliv
erin
g se
rvic
es a
ffect
s th
e co
mpl
exity
of t
he
user
exp
erie
nce,
and
may
lead
to v
aria
tions
in
how
up-
to-d
ate
the
serv
ices
are
at a
ny p
oint
in
time,
leve
ls o
f rob
ustn
ess,
sec
urity
, and
sc
alab
ility.
Coo
rdin
atin
g th
ese
man
y sm
alle
r ex
perie
nces
is a
com
plex
exe
rcis
e w
here
eac
h po
int r
epre
sent
s an
opp
ortu
nity
whe
re th
e ov
eral
l ex
perie
nce
can
brea
k do
wn.
C
ondi
tions
: Occ
urrin
g w
here
ser
vice
s ar
e ho
sted
in (o
r acr
oss)
mul
tiple
loca
tions
, nod
es o
r te
chno
logi
es.
Inte
rdep
ende
ncie
s: U
ser I
nter
actio
ns &
C
ompu
ter I
nter
face
s; tr
ansp
aren
cy a
nd o
paci
ty;
lega
cy p
latfo
rms
and
infra
stru
ctur
es; u
ser t
rust
.
Cas
e ex
ampl
es:
Parti
cipa
ting
in th
e £B
sch
eme
invo
lves
a d
iver
se
set o
f rel
ated
act
iviti
es. T
he o
vera
ll ex
perie
nce
of
usin
g th
e £B
enc
ompa
sses
man
y pa
rtial
ex
perie
nces
, for
e.g
., us
ers
visi
ting
a sh
op to
ex
chan
ge s
terli
ng fo
r prin
ted
£B, g
o to
the
Bris
tol C
redi
t Uni
on’s
web
site
to c
heck
e£B
ba
lanc
es o
r top
up
cred
it, v
isit
a st
reet
mar
ket t
o sp
end
£B, d
rop
in a
t £B
AGM
s to
dire
ct
deci
sion
-mak
ing
as a
n ac
tive
mem
ber o
f the
co
mm
unity
, mak
e Tx
t2Pa
y pa
ymen
ts, o
r spe
ak
to a
mem
ber o
f the
£B
team
on
the
phon
e to
en
quire
abo
ut p
roce
dure
s. M
anag
ing
thes
e op
erat
ions
invo
lves
con
tinuo
us c
o-or
dina
tion
on
beha
lf of
the
£B m
anag
emen
t tea
m, a
nd re
quire
s its
use
rs to
be
awar
e of
how
the
parts
of t
he
syst
em a
re in
terre
late
d. A
gain
st th
is, t
he s
yste
m
has
a gr
eat d
eal o
f rob
ustn
ess
and
flexi
bilit
y fro
m re
dund
ancy
and
dis
tribu
tion
acro
ss it
s pa
rts.
Zopa
’s s
ervi
ces
are
prim
arily
des
ktop
-acc
esse
d th
roug
h its
web
site
for i
ts c
usto
mer
-faci
ng
appl
icat
ions
. Thi
s m
eans
Zop
a ha
s a
high
deg
ree
of c
ontro
l ove
r thi
s as
pect
of t
he u
ser
expe
rienc
e, a
lthou
gh fu
ture
cha
nge
is e
xpec
ted
here
. Ada
ptin
g to
mob
ile, a
nd to
cre
atin
g se
amle
ss tr
ansi
tions
bet
wee
n m
obile
and
de
skto
p ha
s pr
oved
com
plex
. Ret
ail c
usto
mer
us
age
patte
rns
in a
cces
sing
fina
ncia
l dat
a ar
e sh
aped
by
thei
r mea
ns a
nd lo
catio
ns: p
erso
nal
reco
rds
tend
to b
e ke
pt a
t hom
e, s
o th
e de
skto
p m
ay c
ontin
ue to
pla
y an
impo
rtant
role
. Pot
entia
l bo
rrow
ers
may
be
draw
n to
the
conv
enie
nce
of
mob
ile, a
t lea
st fo
r cal
cula
ting
cost
s an
d ra
tes,
if
not c
ompl
etin
g a
full
loan
app
licat
ion.
How
ever
, m
obile
acc
ess
pres
ents
cha
lleng
es in
dis
play
ing
finan
cial
and
lega
l inf
orm
atio
n in
a
com
preh
ensi
ble
and
com
forta
ble
man
ner.
!
Des
ign
Solu
tions
: the
futu
re lo
oks
to b
e on
e of
de
vice
pro
fusi
on. D
esig
ning
ser
vice
s ar
ound
ex
pect
atio
ns o
f an
excl
usiv
e, s
ingl
e po
int a
cces
s is
unl
ikel
y to
be
succ
essf
ul. M
obile
use
is
grow
ing,
alth
ough
this
cha
nges
wha
t use
rs
expe
ct (m
ore,
or d
iffer
ent,
serv
ices
) in
addi
tion
to
the
diffe
rent
inte
ract
iona
l dem
ands
of t
hese
de
vice
s. D
istri
bute
d fin
anci
al s
ervi
ce o
pera
tions
(a
s w
ith th
e £B
) are
like
ly to
pla
ce a
dditi
onal
de
man
ds o
n su
ppor
ting
tech
nolo
gy, b
ut
conv
erse
ly, m
ay a
lso
sim
plify
inte
ract
ions
and
co
nten
t pre
sent
atio
n: a
t eac
h no
de, o
nly
a pa
rticu
lar p
art o
f the
tota
l ser
vice
offe
ring
is
requ
ired.
Im
plic
atio
ns: A
ll: D
e-ce
ntra
lisat
ion
of fi
nanc
ial
serv
ices
can
pro
vide
use
rs w
ith m
ore
flexi
bilit
y in
ho
w th
ey c
an a
cces
s an
d en
gage
with
ser
vice
s fro
m m
ultip
le d
evic
es a
nd s
ettin
gs; t
he is
sue
then
bec
omes
one
of c
o-or
dina
ting
thes
e pa
rts.
Inte
ract
ion
desi
gner
s ne
ed to
con
side
r how
to
best
des
ign
and
mai
ntai
n st
anda
rds
and
cons
iste
ncy
in u
ser i
nter
actio
n ac
ross
sys
tem
s.
For e
ntre
pren
eurs
and
ser
vice
man
ager
s,
crea
ting
dist
ribut
ed s
ervi
ces
on o
ne h
and
broa
dens
mar
ket o
ppor
tuni
ties
and
acce
ssib
ility
but s
imul
tane
ousl
y cr
eate
s ch
alle
nges
aro
und
the
inte
grat
ion
and
com
mun
icat
ion
of
hete
roge
neou
s sy
stem
com
pone
nts,
del
iver
ing,
m
aint
aini
ng a
nd u
pdat
ing
cont
ent,
deal
ing
with
br
eakd
owns
and
sec
urity
issu
es. F
or re
gula
tors
, sh
iftin
g to
de-
cent
ralis
ed s
yste
ms
mar
ks th
e ne
ed to
con
side
r who
are
the
new
sta
keho
lder
s in
volv
ed in
the
inte
grat
ion
and
deliv
ery
of s
uch
finan
cial
ser
vice
s (e
.g. b
anks
, mob
ile c
ompa
nies
an
d ot
her m
iddl
ewar
e pl
ayer
s, s
uch
as a
pp
mar
kets
), an
d su
bseq
uent
ly h
ow to
bes
t reg
ulat
e to
ens
ure
smoo
th in
tegr
atio
n an
d se
curit
y at
an
indu
stry
or m
iddl
ewar
e le
vel. !
!
CO
MM
OD
ITIS
ATIO
N &
FI
NAN
CIA
LISA
TIO
N
Def
initi
on: C
omm
oditi
satio
n re
fers
to th
e pr
esen
tatio
n of
uni
que
and
com
plex
fina
ncia
l el
emen
ts a
s ge
neric
(ena
blin
g si
mpl
ified
trad
ing)
, w
hile
fina
ncia
lisat
ion
here
refe
rs to
the
proc
ess
of tr
ansf
orm
ing
prod
ucts
or s
ervi
ces
into
tra
dabl
e fin
anci
al in
stru
men
ts th
roug
h th
e gr
owth
of f
inan
cial
exp
ertis
e an
d re
fere
nce
data
. Is
sues
: Com
mod
itisa
tion
and
finan
cial
isat
ion
both
incr
ease
opp
ortu
nitie
s to
ext
end
finan
cial
pr
oduc
ts fr
om u
se b
y sm
all g
roup
s of
ex
perie
nced
inve
stor
s an
d pr
ofes
sion
al fi
nanc
ial
advi
sors
to a
larg
er u
ser b
ase.
The
y w
ork
in
para
llel:
com
mod
itisa
tion
crea
tes
the
appe
aran
ce o
f sim
plic
ity w
hile
fina
ncia
lisat
ion
requ
ires
user
s’ in
crea
sed
know
ledg
e of
, and
at
tent
ion
to, f
eatu
res
and
info
rmat
ion
surro
undi
ng fi
nanc
ial p
rodu
cts.
Sim
plifi
ed
prod
ucts
whi
ch m
any
peop
le h
ave
a ba
sic
unde
rsta
ndin
g of
hav
e m
ore
mar
ket r
each
than
co
mpl
ex o
nes
aim
ed a
t spe
cial
ist a
udie
nces
. M
any
advo
cate
s of
dig
ital c
urre
ncie
s an
d p2
p fin
anci
al in
stru
men
ts h
ave
laud
ed fi
nanc
ialis
atio
n as
a m
eans
of e
mpo
wer
men
t, w
hile
crit
iciz
ing
com
mod
itisa
tion
for o
bscu
ring
or re
mov
ing
user
s’ g
ranu
lar c
ontro
l. W
e ha
ve o
bser
ved
that
as
alte
rnat
ive
finan
cial
pla
tform
s m
atur
e, th
ey a
re
incr
easi
ngly
com
mod
itise
d: s
impl
ified
, pa
ckag
ed, a
nd m
ade
less
uni
que.
For
Zop
a an
d £B
use
rs, w
e sa
w le
ss fi
nanc
ial l
itera
cy, w
ith
spec
ialis
t kno
wle
dge
reta
ined
in th
e or
gani
satio
n, o
r em
bodi
ed in
the
plat
form
, rat
her
than
hel
d by
use
rs. T
his
com
bina
tion
of g
reat
er
com
mod
itisa
tion
and
less
fina
ncia
lisat
ion
is
unex
pect
ed, p
ossi
bly
rela
ted
to th
e U
K’s
rela
tivel
y lo
w d
egre
e of
con
sum
er fi
nanc
ial
expe
rtise
, alo
ngsi
de a
regu
lato
ry re
gim
e le
ss
focu
sed
on e
xper
t kno
wle
dge
than
its
US
and
EU e
quiv
alen
ts.
Inte
rdep
ende
ncie
s: T
rans
pare
ncy
and
opac
ity;
Use
r tru
st; R
isk
& m
itiga
tion.
C
ase
exam
ples
: C
once
rn w
ith c
omm
oditi
satio
n an
d fin
anci
alis
atio
n is
cle
ares
t in
Zopa
, whe
re th
e pr
oduc
t int
erac
tivity
and
cus
tom
isab
ility
has
been
redu
ced
over
tim
e. G
row
th in
its
user
bas
e se
ems
dire
ctly
rela
ted
to th
e re
mov
al o
f com
plex
us
er to
ols,
and
the
stre
amlin
ing
of th
e us
er
expe
rienc
e co
uple
d w
ith re
mov
al o
f tec
hnic
al
info
rmat
ion
from
the
mai
n w
eb p
ages
to F
AQs
and
othe
r “ba
ck m
atte
r”. I
ts u
ser b
ase
is
ther
efor
e bo
th te
chni
cally
de-
finan
cial
ised
th
roug
h th
e re
duce
d de
tail
avai
labl
e on
the
oper
atio
ns o
f p2p
lend
ing,
and
com
mod
itise
d th
roug
h si
mpl
ified
inte
ract
iona
l mec
hani
cs th
at
turn
a c
ompl
ex a
ltern
ativ
e p2
p fin
anci
al p
rodu
ct
into
the
appe
aran
ce o
f a g
ener
ic lo
an.
The
£B is
del
iber
atel
y no
t pos
ition
ed a
s a
corp
orat
e fin
anci
al in
stru
men
t, si
tting
with
in a
n id
iosy
ncra
tic a
nd u
ncon
vent
iona
l sub
cultu
re o
f us
ers,
and
initi
ally
thes
e co
ncer
ns m
ight
see
m
less
rele
vant
. Yet
, eve
n he
re a
re e
lem
ents
of
incr
ease
d co
mm
oditi
satio
n an
d m
ore
finan
cial
isat
ion
in p
lay.
To
enab
le s
impl
e in
tera
ctio
ns, t
he £
B ha
s w
orke
d to
sim
plify
its
mea
ns o
f tra
nsac
tion:
for e
.g.,
£1 s
terli
ng =
£B1
; un
like
bitc
oin,
its
valu
e do
es n
ot fl
oat,
inst
illing
a
sens
e of
sim
plic
ity (a
nd p
erce
ived
con
fiden
ce) i
n tra
nsac
tions
. In
so d
oing
, tra
ding
£B
is
stra
ight
forw
ard,
but
may
suf
fer f
rom
losi
ng s
ome
of th
e un
ique
ness
that
it s
take
s its
ope
ratio
nal
valu
e in
. D
esig
n So
lutio
ns: Z
opa
has
focu
sed
on
rebu
ndlin
g its
exp
ertis
e in
to u
ser-
faci
ng a
nd
back
-end
sof
twar
e, ra
ther
than
dem
andi
ng u
ser
expe
rtise
. Whi
le o
ther
dig
ital f
inan
cial
pro
duct
s (e
.g. c
rypt
ocur
renc
ies)
requ
ire a
hig
h de
gree
of
finan
cial
isat
ion,
this
com
bina
tion
may
onl
y be
ap
prop
riate
for n
iche
mar
kets
of t
echn
olog
ical
ly
and
finan
cial
ly s
ophi
stic
ated
use
rs. I
t may
be
a m
ista
ke fo
r fin
anci
al s
trate
gist
s to
exp
ect t
hat
incr
easi
ng th
e av
aila
bilit
y of
fina
ncia
l dat
a an
d th
e ab
ility
to v
isua
lise
or e
xplo
re it
may
be
rele
vant
to u
sers
, or p
rovi
de a
pra
ctic
al b
asis
for
build
ing
nove
l bus
ines
s m
odel
s, a
t lea
st fo
r m
atur
e op
erat
ions
see
king
to w
iden
thei
r use
r ba
se. F
ewer
and
‘cur
ated
’ gen
eric
sol
utio
ns th
at
do n
ot re
quire
tech
nica
l or f
inan
cial
acu
men
and
ar
e co
mpa
rabl
e ac
ross
the
wid
er s
ecto
r (e.
g.
utilis
ing
XML)
may
offe
r adv
anta
ges
to n
on-
expe
rt us
ers,
as
wel
l as
help
bui
ld c
ritic
al m
ass.
Im
plic
atio
ns: I
nter
actio
n de
sign
ers
may
wis
h to
m
inim
ise
man
dato
ry fi
nanc
ial d
iscl
osur
es fr
om
core
inte
ract
ions
, but
ava
ilabl
e to
thos
e se
ekin
g m
ore
deta
il. S
impl
icity
of d
esig
n an
d w
orkf
low
is
key
to b
uild
ing
new
tech
nolo
gies
and
ser
vice
s.
For e
ntre
pren
eurs
and
ser
vice
man
ager
s, tr
ust i
n fin
anci
al fi
rms
and
prod
ucts
see
ms
rela
ted
to
clar
ity a
nd d
irect
ness
in c
omm
unic
atio
n, w
hile
fin
anci
alis
atio
n m
ay b
e re
sent
ed b
y or
dina
ry
user
s w
ho fe
el b
urde
ned
with
mas
terin
g co
mpl
ex s
yste
ms
in o
rder
to s
ave
or in
vest
. For
re
gula
tors
, reg
ulat
ory
regi
mes
for f
inan
cial
in
stru
men
ts h
ave
been
bas
ed in
an
appr
oach
to
disc
losu
re d
esig
ned
for f
inan
cial
exp
erts
and
pr
ofes
sion
als,
bas
ed o
n th
e no
tion
that
trus
t is
root
ed in
acc
ess
to d
etai
led
prod
uct i
nfor
mat
ion.
W
ith c
onsu
mer
pro
duct
s, s
uch
disc
losu
re c
an b
e fri
ghte
ning
ly c
onfu
sing
, and
wor
k to
redu
ce tr
ust.
Regu
lato
ry re
gim
es fo
cuse
d at
the
firm
or
indu
stry
leve
l may
be
mor
e ap
prop
riate
for
cons
umer
-faci
ng fi
nanc
ial t
echn
olog
ies.
!
TRAN
SPAR
ENC
Y &
OPA
CIT
Y
Def
initi
on: T
rans
pare
nt s
yste
ms
are
thos
e th
at
reve
al th
emse
lves
and
the
way
s th
at th
ey
oper
ate
to th
eir u
sers
. It i
s ge
nera
lly u
nder
stoo
d th
at p
eer-
to-p
eer f
inan
cial
sys
tem
s ar
e m
ore
trans
pare
ntly
acc
ount
able
to th
eir u
sers
and
m
ore
dem
ocra
tical
ly o
pen
than
the
opaq
ue s
tyle
of
inte
ract
ions
pre
sent
ed b
y tra
ditio
nal b
anks
, w
hich
typi
cally
pre
sent
a ‘b
lack
-box
’ mod
el o
f th
eir u
nder
lyin
g pr
oces
ses
to u
sers
. Is
sues
: We
have
obs
erve
d a
rela
tivel
y lo
w
degr
ee o
f tra
nspa
renc
y in
the
way
s th
at d
igita
l in
tera
ctio
ns a
nd tr
ansa
ctio
ns h
ave
take
n pl
ace–
and
that
this
has
bee
n le
ss o
f a d
rag
on th
e up
take
and
suc
cess
of t
he s
yste
ms
than
we
wou
ld h
ave
expe
cted
. How
ever
, sys
tem
s th
at
are
mor
e op
aque
hav
e a
pote
ntia
l bar
rier t
o ov
erco
me
in p
rovi
ding
acc
ount
abilit
y ab
out t
he
way
s th
at th
ey o
pera
te (e
.g. e
thic
ality
, leg
ality
), co
mpr
ehen
sion
abo
ut th
eir s
ervi
ce o
fferin
gs a
nd
met
hods
of i
nter
actio
n, a
nd a
ssur
ance
s on
the
viab
ility
of th
eir f
inan
cial
ope
ratio
ns.
Con
ditio
ns: T
rans
pare
nt/o
paqu
e in
tera
ctio
ns
can
occu
r bet
wee
n us
ers’
dig
ital t
rans
actio
ns,
betw
een
user
s an
d th
eir p
erso
nal a
ccou
nt
deta
ils, b
etw
een
user
s an
d th
e di
gita
l in
term
edia
ry, a
nd b
etw
een
the
digi
tal
inte
rmed
iary
and
thei
r sof
twar
e or
ser
vice
pr
ovid
ers.
Inte
rdep
ende
ncie
s: U
ser
Inte
ract
ions
& c
ompu
ter
inte
rface
s; T
angi
bilit
y &
the
mat
eria
l of t
rans
actio
n;
Use
r tru
st; I
nfor
mat
ion,
m
etric
s &
user
feed
back
.
Cas
e ex
ampl
es:
In th
e £B
cas
e, it
is o
ften
not c
lear
wha
t the
st
atus
of t
rans
actio
ns is
(e.g
. pay
men
ts
succ
essf
ully
rece
ived
, use
r acc
ount
bal
ance
s,
and
whe
re o
r how
thei
r mon
ey is
hel
d an
d m
anag
ed).
Cou
nter
intu
itive
ly, u
sers
app
ear t
o co
nsid
er th
ese
issu
es a
s la
rgel
y un
prob
lem
atic
: th
e na
ture
of l
ocal
ness
and
face
-to-
face
in
tera
ctio
n (a
nd p
ossi
bly
the
typi
cally
sm
all s
ize
of u
ser b
alan
ces
and
trans
actio
ns) a
ppea
rs to
m
oder
ate
man
y fin
anci
al in
tera
ctio
ns in
whi
ch
the
tech
nica
l inf
rast
ruct
ure
mig
ht o
ther
wis
e en
gend
er lo
w le
vels
of t
rust
. Thi
s co
ncer
n is
pe
rhap
s al
so m
oder
ated
bec
ause
of t
he h
igh
leve
ls o
f tra
nspa
renc
y in
the
man
agem
ent a
nd
oper
atio
n of
the
£B C
IC, w
hich
hol
ds re
gula
r op
en m
eetin
gs a
nd is
sub
ject
to h
ighl
y vi
sibl
e pu
blic
crit
icis
m a
nd s
crut
iny.
Zo
pa p
rese
nts
a si
mila
rly p
arad
oxic
al c
ase
mov
ing
from
an
early
pha
se in
whi
ch u
sers
wer
e pr
esen
ted
with
a ri
ch s
et o
f int
erac
tive
tool
s to
ac
cess
and
inte
rroga
te th
eir l
endi
ng p
ortfo
lios,
bu
t the
se h
ave
tool
s be
en s
low
ly re
mov
ed to
on
ly g
ive
sim
ple
acce
ss to
gen
eral
mar
ket d
ata.
Th
e ra
tiona
le fo
r thi
s w
as th
at c
hang
ing
user
de
mog
raph
ics
(you
ng to
old
er),
an in
crea
sing
fo
cus
on fi
nanc
ial r
etur
n (fr
om s
ocia
l len
ding
), an
d ch
angi
ng p
rodu
cts
(less
cho
ice,
‘saf
er’
inve
stm
ents
) mea
ns th
at d
eman
d fo
r ana
lytic
to
ols
is lo
wer
, and
pro
vide
s a
clea
ner,
easi
er-t
o-un
ders
tand
use
r-ex
perie
nce
(UX)
. Thi
s la
ck o
f tra
nspa
renc
y ha
s al
so m
eant
that
exp
erie
nced
us
ers
are
not a
ble
to ‘g
ame’
the
syst
em a
nd
outc
ompe
te n
ovic
es (w
ho a
re m
ore
num
erou
s,
and
mor
e fin
anci
ally
val
uabl
e as
cus
tom
ers
to
Zopa
) for
mat
ched
loan
s.
!
Des
ign
Solu
tions
: Whi
le it
is p
refe
rabl
e an
d go
od p
ract
ice
to p
rovi
de tr
ansp
aren
t sys
tem
s th
at a
re o
pen
to in
spec
tion
and
fore
nsic
ex
amin
atio
n, th
is is
not
alw
ays
nece
ssar
y or
ev
en d
esira
ble.
Whe
re o
ther
met
hods
or s
ocia
l pr
otoc
ols
can
be c
alle
d in
to p
lay,
mor
e tra
nspa
rent
sys
tem
s m
ay b
e di
spen
sed
with
for
inte
ract
iona
l sim
plic
ity. T
he re
mov
al o
f ful
l tra
nspa
renc
y is
als
o ad
vise
d w
here
it m
ay
disa
dvan
tage
gro
ups
of u
sers
that
do
not h
ave
the
reso
urce
s to
mak
e fu
ll us
e of
thes
e sy
stem
s,
so th
at th
ey o
pera
te o
n a
leve
l fin
anci
al p
layi
ng
field
in c
ompe
titiv
e si
tuat
ions
(as
with
Zop
a).
Impl
icat
ions
: All:
at d
iffer
ent s
tage
s of
ser
vice
m
atur
ity, u
ser e
xpec
tatio
ns o
n th
e vi
sibi
lity
of
trans
actio
nal i
nfor
mat
ion
may
cha
nge;
at t
he
sam
e tim
e, th
is c
hang
e is
like
ly to
impa
ct o
n se
rvic
e co
nsis
tenc
y an
d co
nseq
uent
ly o
n us
er
satis
fact
ion.
Thi
s ha
s re
leva
nce
to in
tera
ctio
n de
sign
ers
in th
at w
hile
tran
spar
ent i
nter
actio
ns
prov
ide
a ‘g
old
stan
dard
’ for
UX
desi
gn a
nd
trust
wor
thy
trans
actio
ns, t
hey
may
not
offe
r the
m
ost e
ffect
ive
solu
tions
in a
ll ca
ses,
and
use
rs
may
be
able
to w
ork
arou
nd le
ss tr
ansp
aren
t fo
rms
of in
tera
ctio
n-if
they
see
a v
alue
/effo
rt pa
yoff.
For
ent
repr
eneu
rs a
nd s
ervi
ce m
anag
ers,
cr
eatin
g m
ore
trans
pare
nt o
r opa
que
syst
ems
may
allo
w th
em to
eng
age
with
diff
eren
t use
r gr
oups
, or t
o ch
ange
how
the
serv
ice/
busi
ness
m
odel
ope
rate
s ov
er ti
me.
For
regu
lato
rs, i
t is
impo
rtant
to u
nder
stan
d th
at c
hang
es to
the
trans
pare
ncy
of in
tera
ctio
ns m
ay fu
ndam
enta
lly
chan
ge w
hat t
he fi
nanc
ial s
ervi
ce p
rovi
des
to
user
s, e
ven
if th
e fu
nctio
nal f
inan
cial
ope
ratio
ns
unde
rpin
ning
the
serv
ice
prov
ider
rem
ain
the
sam
e.
TAN
GIB
ILIT
Y &
THE
MAT
ERIA
L O
F TR
ANSA
CTI
ON
D
efin
ition
: Tan
gibi
lity
refe
rs to
the
abilit
y to
re
ach
out a
nd to
uch
som
ethi
ng; p
hysi
cal a
nd
digi
tal m
ater
ials
offe
r diff
eren
t tan
gibl
e ex
perie
nces
to o
ne a
noth
er. M
oney
in th
e fo
rm
of c
ash
is a
form
of m
ater
ial t
hat w
e ca
n to
uch
and
hand
le, a
s op
pose
d to
dig
ital m
oney
that
ex
ists
in e
lect
roni
c fo
rm a
nd re
quire
s di
gita
l in
term
edia
ries
to a
ccou
nt fo
r and
tran
sfer
it o
n ou
r beh
alf.
In te
rms
of d
igita
l med
ia, d
iffer
ent
repr
esen
tatio
ns o
ffer d
iffer
ent l
evel
s of
wha
t ap
prox
imat
es to
tang
ibilit
y–th
is a
mou
nts
to th
e ‘re
ach’
of t
he u
ser i
n co
ntro
lling
wha
t the
y ca
n do
with
thei
r dig
ital r
esou
rces
. Is
sues
: Dig
ital f
orm
s of
val
ue (e
.g. m
oney
) may
be
com
plem
ente
d by
phy
sica
l cou
nter
parts
(e.g
. pr
inte
d no
tes)
; diff
eren
t for
ms
of m
ater
ial o
ffer
diffe
rent
opp
ortu
nitie
s fo
r act
ion.
It is
gen
eral
ly
acce
pted
that
incr
ease
d ta
ngib
ility
offe
rs
sim
plic
ity o
f ope
ratio
n, a
nd fl
exib
ility
in h
ow
user
s ca
n ap
prop
riate
tech
nolo
gy fo
r the
ir ow
n an
d ne
w p
urpo
ses.
Rep
rese
ntin
g da
ta th
roug
h ph
ysic
al o
bjec
ts a
nd o
f man
ipul
atin
g th
e da
ta b
y ph
ysic
al h
andl
ing
of th
e ob
ject
s ca
n ai
d its
co
mpr
ehen
sion
and
con
trol.
Link
ing
the
phys
ical
to
the
digi
tal o
pens
up
finan
cial
sch
emes
to
wid
er u
ser g
roup
s, fu
rther
incr
easi
ng th
eir r
each
an
d ac
cept
abilit
y. B
ecau
se p
2p a
nd a
ltern
ativ
e fin
anci
al s
ervi
ces
are
not t
ied
to e
xist
ing
syst
ems
and
form
s of
mon
etar
y ex
chan
ge, t
here
are
br
oad
oppo
rtuni
ties
here
for c
onsi
derin
g ho
w
tang
ible
and
mat
eria
l int
erac
tions
mig
ht b
e le
vera
ged
in b
uild
ing
new
use
ful,
usab
le a
nd
cred
ible
tran
sact
iona
l for
ms.
C
ondi
tions
: Tan
gibl
e an
d m
ater
ial t
rans
actio
ns
can
occu
r whe
re p
hysi
cal m
edia
can
be
exch
ange
d, ty
pica
lly in
syn
chro
nous
, fac
e-to
-fa
ce tr
ansa
ctio
ns.
Inte
rdep
ende
ncie
s: U
ser i
nter
actio
ns &
com
p.
inte
rface
s; S
ocia
l con
nect
ivity
; Use
r tru
st.
Cas
e ex
ampl
es:
The
tang
ible
and
aes
thet
ic q
ualit
ies
of th
e £B
ph
ysic
al n
otes
pro
mot
e in
tere
st in
the
sche
me
itsel
f and
giv
e vi
sibi
lity
to th
eir a
ims,
(e.g
. th
roug
h lo
cal a
rtist
s’ w
ork
on th
e no
tes)
, as
wel
l as
cre
dibi
lity
to th
e sc
hem
e as
a w
hole
thro
ugh
thei
r qua
lity
(they
look
exp
ensi
ve to
pro
duce
), se
curit
y fe
atur
es, a
nd re
fere
ntia
lity
(e.g
. not
es
can
be tr
aced
to th
eir s
ourc
e). T
his
give
s su
bsta
nce
and
cred
ibilit
y to
use
of t
he £
B as
a
who
le, i
nclu
ding
its
elec
troni
c co
unte
rpar
t. M
oreo
ver,
unlik
e Tx
t2pa
y, n
otes
do
not r
equi
re a
sp
ecifi
c te
chno
logy
and
use
rs a
re a
lread
y fa
milia
r with
thei
r ope
ratio
n. £
B us
ers
also
de
scrib
e ho
w th
ey h
ave
paid
in d
enom
inat
ions
of
£B20
not
es fo
r sm
all p
urch
ases
, bec
ause
the
rece
iver
will
now
a la
rge
amou
nt o
f £B
to fu
rther
ci
rcul
ate
into
the
loca
l com
mun
ity. N
otes
can
al
so le
ave
the
loca
l are
a an
d re
ach
a w
ider
au
dien
ce; t
hey
are
perm
anen
t, cu
rious
and
co
llect
able
, occ
asio
nally
bei
ng s
old
on e
Bay
for
pric
es a
bove
thei
r fac
e va
lue,
and
alth
ough
di
scou
rage
d, p
oten
tially
brin
ging
fina
ncia
l be
nefit
s to
bot
h th
e se
ller a
nd th
e £B
CIC
. Zo
pa’s
loan
s an
d in
vest
men
ts a
re p
ure
inta
ngib
les.
Mon
ey fo
r bot
h bo
rrow
ers
and
lend
ers
is s
een
as a
larg
ely
irrel
evan
t in
term
edia
ry s
tage
bet
wee
n th
e us
er a
nd
conc
rete
or a
bstra
ct g
oals
: an
extra
bed
room
ad
ded
to o
ne’s
hou
se, a
n ad
ult c
hild
’s m
ortg
age
dow
n pa
ymen
t sav
ed fo
r, a
mor
e co
mfo
rtabl
e re
tirem
ent p
rovi
ded
for.
Ther
e ar
e ad
vant
ages
to
this
in th
at p
art o
f wha
t Zop
a of
fers
is th
e di
sint
erm
edia
tion
of m
ater
ial a
ctiv
ities
: pa
perw
ork,
vis
its to
ban
kers
, dire
ct c
onta
ct
betw
een
borro
wer
s an
d le
nder
s. W
hat i
s lo
st is
th
e ab
ility
to c
reat
e a
casu
ally
trad
able
se
cond
ary
mar
ket f
or lo
ans
or d
ebt t
hrou
gh
pape
r or d
igita
lly tr
ansf
erra
ble
certi
ficat
es; f
or
e.g.
, pro
mis
sory
not
es o
r phy
sica
l tok
ens
that
co
uld
be e
xcha
nged
as
a fo
rm o
f val
ue o
r se
curit
y. T
here
are
cle
arly
sol
id b
usin
ess
reas
ons
for n
ot d
oing
this
, but
the
form
of m
ater
ial a
nd it
s pr
oper
ties
stro
ngly
sha
pe th
e w
ays
that
thes
e ki
nds
of a
ltern
ativ
e fin
anci
al s
yste
ms
may
be
used
, app
ropr
iate
d an
d va
lued
. D
esig
n So
lutio
ns: D
igita
l con
tent
can
be
enha
nced
with
phy
sica
l med
ia (a
nd v
ice
vers
a) to
en
hanc
e its
tang
ibilit
y, in
tegr
atin
g ph
ysic
al
mat
eria
ls w
ith a
dig
ital l
ayer
of i
nfor
mat
ion.
For
e.
g., d
igita
l res
ourc
es, s
uch
as e
lect
roni
c m
oney
ca
n be
mad
e ph
ysic
al (b
y pr
intin
g). S
imila
rly,
phys
ical
obj
ects
(e.g
. IO
Us
or m
oney
) can
be
sens
ed o
r sca
nned
for u
niqu
e id
entif
iabl
e fe
atur
es (p
erha
ps v
ia a
sm
artp
hone
), al
low
ing
them
to b
e di
gita
lly a
sses
sed,
or t
o be
enh
ance
d in
som
e w
ay (s
uch
as tr
acki
ng o
wne
rshi
p or
use
ov
er ti
me)
. Im
plic
atio
ns: F
or le
gisl
ator
s, m
any
regu
lato
ry
issu
es in
volv
ing
digi
tal p
aym
ent a
nd lo
an
cont
ract
s ar
e co
untry
-spe
cific
, and
bey
ond
the
scop
e of
this
doc
umen
t. Th
ese
may
hav
e pr
ofou
nd im
plic
atio
ns o
n th
e de
sign
and
lega
lity
of d
igita
l for
ms
of v
alue
. A la
ck o
f mat
eria
lity
of
digi
tal f
inan
cial
inst
rum
ents
may
(as
with
low
er
Tran
spar
ency
), ac
tual
ly m
inim
ize u
ser c
onfu
sion
an
d un
war
rant
ed a
ssum
ptio
ns o
f fam
iliarit
y ba
sed
on fl
awed
ana
logi
es to
trad
ition
al
inst
rum
ents
: e.g
., a
phys
ical
alte
rnat
ive
curre
ncy
mor
e ak
in to
a b
ankn
ote
than
may
be
appr
opria
te. A
long
side
this
, reg
ulat
ory
syst
ems
that
ass
ume
prin
ted
docu
men
tatio
n (s
ee a
lso
Use
r Int
erac
tions
and
Com
pute
r Int
erfa
ces)
may
ne
ed to
be
re-th
ough
t in
a co
ntex
t of i
mm
ater
ial
or d
igita
lly-n
ativ
e in
stru
men
ts. !
LEG
ACY
PLAT
FOR
MS
AND
IN
FRAS
TRU
CTU
RES
D
efin
ition
: Leg
acy
tech
nolo
gies
are
thos
e th
at
are
no lo
nger
cur
rent
ly th
e m
ains
tream
or b
est-
in-c
lass
, but
stil
l in
use.
Thi
s m
ay b
e be
caus
e th
ey re
liabl
y ca
rry o
ut s
peci
alis
ed fu
nctio
ns,
mak
ing
them
risk
y or
exp
ensi
ve to
repl
ace,
or
beca
use
they
hav
e a
larg
e ex
istin
g us
er b
ase,
m
akin
g it
diffi
cult
or im
prac
tical
to m
igra
te th
em
to a
noth
er p
latfo
rm.
Issu
es: U
sing
and
mai
ntai
ning
lega
cy
tech
nolo
gies
can
mea
n th
at th
e te
chno
logy
is
trust
ed a
nd re
liabl
e. T
his
has
to b
e ba
lanc
ed
agai
nst t
he e
xper
tise,
tim
e, e
ffort
and
cost
of
keep
ing
thos
e te
chno
logi
es w
orki
ng e
ffect
ivel
y.
As a
wel
l-kno
wn
exam
ple,
Mic
roso
ft’s
I.E.6
web
br
owse
r lie
s at
the
hear
t of m
any
ente
rpris
e ap
plic
atio
n so
lutio
ns, m
akin
g it
extre
mel
y ha
rd to
de
velo
p ne
w, m
ore
secu
re a
nd a
dvan
ced
solu
tions
aro
und
beca
use
of a
nee
d to
mai
ntai
n co
mpa
tibilit
y. In
term
s of
fina
ncia
l sys
tem
s fo
r al
tern
ativ
e an
d p2
p fin
anci
al s
ervi
ces,
lega
cy
issu
es c
an h
ave
num
erou
s im
pact
s. T
here
is a
ne
ed to
mak
e su
re th
at c
onsu
mer
use
rs a
re a
ble
to u
se th
e se
rvic
es o
n th
eir d
evic
es w
ithou
t up
datin
g so
ftwar
e or
har
dwar
e, e
spec
ially
whe
n th
is is
at t
heir
own
cost
for a
n as
-yet
tent
ativ
e an
d fra
gile
ser
vice
that
may
be
seco
ndar
y to
th
eir n
orm
al fi
nanc
ial p
ract
ices
. Man
y al
tern
ativ
e se
rvic
es in
itial
ly b
egin
life
as
side
pro
ject
s, a
nd th
ere
is a
ne
ed to
ens
ure
that
as
thes
e m
atur
e th
ey a
re a
ble
to
scal
e to
larg
er
serv
ices
, tha
t are
re
liabl
e an
d se
cure
, in
a dy
nam
ic e
nviro
nmen
t, in
w
hich
legi
slat
ive
and
regu
lato
ry is
sues
em
erge
, new
sec
urity
thre
ats
aris
e, a
nd a
uxilia
ry s
oftw
are
and
netw
ork
serv
ices
may
cha
nge.
Mor
eove
r, as
alte
rnat
ive
and
p2p
finan
cial
ser
vice
s m
atur
e ov
er ti
me,
they
m
ay w
ish
to c
hang
e th
eir s
ervi
ce o
fferin
g an
d bu
sine
ss m
odel
s to
ada
pt to
mar
ket c
ondi
tions
, an
d th
eir b
ette
r und
erst
andi
ngs
of b
usin
ess
and
oper
atio
nal n
eeds
. C
ondi
tions
: Whe
re o
ld a
nd n
ew c
ollid
e.
Inte
rdep
ende
ncie
s: T
rans
pare
ncy
and
opac
ity;
Info
rmat
ion,
met
rics
& us
er fe
edba
ck; R
egul
atio
n &
finan
cial
eco
logi
es.
Cas
e ex
ampl
es:
The
£B C
IC’s
dec
isio
ns a
roun
d th
e te
chno
logi
es
unde
rpin
ning
its
serv
ices
is s
hape
d by
the
CIC
’s
limite
d fin
anci
al re
sour
ces
and
as a
resu
lt th
e lim
ited
skills
, exp
ertis
e an
d tim
e th
at g
rant
s th
em
acce
ss to
. The
y al
so m
aint
ain
a du
ty to
the
£B
mem
bers
of u
phol
ding
the
valu
es o
f the
£B,
in
ensu
ring
sust
aina
bilit
y an
d in
clus
ivity
: the
re is
a
delib
erat
e at
tem
pt to
ens
ure
that
use
rs w
ho a
re
unw
illing
to re
plac
e th
eir m
obile
feat
ure
phon
es
(i.e.
non
-sm
art m
obile
pho
nes)
are
not
exc
lude
d;
for e
.g.,
they
may
not
wis
h to
repl
ace
cost
ly o
r en
viro
nmen
tally
dam
agin
g de
vice
s. T
he b
ack
offic
e te
chno
logi
es in
use
refle
ct th
e re
latio
nshi
ps b
etw
een
the
CIC
and
oth
er b
odie
s th
at s
hare
its
finan
cial
eco
logy
, e.g
. the
Bris
tol
Cre
dit U
nion
, on
whi
ch th
e C
IC d
epen
ds fo
r ad
min
iste
ring
the
£B a
ccou
nts,
and
the
supp
liers
of
the
softw
are
(com
mer
cial
and
ope
n-so
urce
) th
at th
ey re
ly o
n, n
ot a
ll of
whi
ch a
re c
urre
nt a
nd
inte
rope
rabl
e. S
ome
of th
ese
serv
ices
requ
ire
man
ual a
ctiv
atio
n an
d ot
hers
exi
st th
at th
e C
IC
are
awar
e of
, but
hav
e in
suffi
cien
t tec
hnic
al
expe
rtise
to o
pera
te.
Zopa
’s te
chno
logy
has
rem
aine
d la
rgel
y co
nsta
nt s
ince
the
firm
’s fo
undi
ng in
200
6, a
side
fro
m s
tand
ard
hard
war
e an
d so
ftwar
e up
grad
ing.
C
urre
ntly
, thi
s pr
esen
ts li
ttle
pote
ntia
l pro
blem
fo
r the
ir ex
istin
g bu
sine
ss o
pera
tions
; how
ever
, th
is is
not
a ta
ken-
for-
gran
ted
assu
mpt
ion.
In th
e co
ntex
t of h
avin
g to
acc
omm
odat
e m
obile
de
vice
s no
w b
eing
ado
pted
by
user
s, th
is
chal
leng
e m
ay re
quire
sig
nific
ant e
ffort.
Zop
a ha
s al
read
y un
derg
one
chan
ges
in re
duci
ng it
s in
form
atio
n an
d co
mpl
exity
, but
the
addi
tion
of
new
ser
vice
s, o
r var
iatio
ns o
n its
fina
ncia
l of
ferin
gs m
ay re
quire
con
side
rabl
e ar
chite
ctur
al
chan
ge to
its
tech
nolo
gy in
frast
ruct
ure.
!! D
esig
n So
lutio
ns: L
egac
y pl
atfo
rms
prov
ide
adva
ntag
es a
s w
ell a
s di
sadv
anta
ges;
sol
utio
ns
will
be c
onte
xt a
nd p
robl
em d
epen
dent
. Im
plic
atio
ns: A
ll: L
egac
y sy
stem
s ar
e of
ten
nece
ssar
y pa
rts o
f the
eco
logi
es o
f fin
anci
al
syst
ems,
esp
ecia
lly w
here
ther
e ar
e m
any
exte
rnal
inte
rdep
ende
ncie
s, a
nd th
ey w
ill ne
ed to
be
con
side
red.
For
ent
repr
eneu
rs a
nd s
yste
ms
deve
lope
rs, d
esig
ning
for a
ntic
ipat
ed id
eal o
r be
st-o
f-cla
ss e
nviro
nmen
ts m
ay li
mit
the
user
ba
se; i
t will
also
mea
n th
at e
xpor
ting
syst
ems
to
new
set
tings
is u
nfea
sibl
e. F
or fi
nanc
ial
stra
tegi
sts
and
man
ager
s: e
volv
ed b
usin
ess
mod
els
com
mon
ly e
mer
ge a
s pr
oduc
ts m
atur
e,
and
exte
nsib
le b
ack-
offic
e sy
stem
arc
hite
ctur
es
and
thei
r sof
twar
e in
terd
epen
denc
ies
have
a
criti
cal r
ole
from
an
early
sta
ge in
sys
tem
s de
velo
pmen
t. Fo
r reg
ulat
ors,
ther
e ne
eds
to b
e an
aw
aren
ess
that
sm
alle
r and
em
ergi
ng
orga
nisa
tions
in th
e al
tern
ativ
e fin
ance
are
na
may
hav
e di
fficu
lties
in a
dapt
ing
thei
r sys
tem
s ar
ound
infra
stru
ctur
es th
at e
ither
they
are
not
in
dire
ct c
ontro
l of,
or h
ave
mor
e lim
ited
reso
urce
s th
an th
e m
ajor
ban
ks to
add
ress
.
INFO
RM
ATIO
N, M
ETR
ICS
& U
SER
FE
EDBA
CK
D
efin
ition
: Qua
ntita
tive
and
qual
itativ
e da
ta c
an
be u
sed
to s
teer
dec
isio
n-m
akin
g, b
oth
by u
sers
, an
d by
org
anis
atio
ns. I
nfor
mat
ion
that
refle
cts
usag
e pa
ttern
s ca
n gu
ide
an o
rgan
isat
ion’
s de
cisi
ons
that
ben
efit
from
an
unde
rsta
ndin
g of
w
hich
pro
duct
s us
ers
are
usin
g, h
ow th
ey a
re
usin
g th
e pr
oduc
ts, a
nd w
here
impr
ovem
ents
ca
n be
mad
e. In
form
atio
n th
at re
flect
s us
er’s
ow
n us
age
patte
rns,
the
activ
ities
of t
he fi
nanc
ial
serv
ices
they
use
, or a
ctiv
ities
of c
o-us
ers
can
help
use
rs in
mak
ing
deci
sion
s ar
ound
thei
r ow
n fu
ture
use
of t
he s
ervi
ces.
To
achi
eve,
this
st
anda
rd m
easu
res
(met
rics)
nee
d to
be
crea
ted
for q
uant
itativ
e da
ta fo
r the
pur
pose
s of
co
mpa
rison
.
Issu
es: W
e ha
ve o
bser
ved
how
fina
ncia
l ser
vice
pr
ovid
ers
acce
ss d
iffer
ent t
ypes
of i
nfor
mat
ion
and
also
how
they
sha
re it
with
thei
r use
rs. I
t w
ould
be
expe
cted
that
alte
rnat
ive
finan
cial
se
rvic
es (e
spec
ially
suc
cess
ful o
nes)
that
hav
e di
ffere
ntia
ted
acce
ss to
use
r and
bus
ines
s da
ta
will
use
this
to im
prov
e th
eir o
pera
tions
, as
wel
l as
mak
ing
this
ava
ilabl
e to
use
rs to
hel
p su
ppor
t th
eir d
ecis
ions
aro
und
trans
actio
ns (w
here
it is
no
t com
mer
cial
ly s
ensi
tive)
. Our
obs
erva
tions
on
this
are
mix
ed. I
nfor
mat
ion
abou
t usa
ge o
r a
finan
cial
pro
duct
may
be
cent
ral t
o an
or
gani
satio
n’s
busi
ness
mod
el o
r ope
ratio
nal
succ
ess,
so
this
con
tent
may
be
fully
, par
tially
or
not v
isib
le o
utsi
de it
s so
urce
. Use
rs th
emse
lves
m
ay, o
r may
not
, wis
h in
form
atio
n ab
out t
heir
activ
ities
to b
e tra
cked
or m
ade
avai
labl
e, e
ither
at
a g
ranu
lar,
or a
bstra
ct le
vel,
and
if th
ey d
o,
they
may
exp
ect t
his
to b
e at
thei
r ow
n di
scre
tion
or u
nder
thei
r ow
n co
ntro
l. As
mor
e an
d m
ore
info
rmat
ion
beco
mes
col
lect
able
bot
h
from
dev
ice
sens
ors
as w
ell a
s fro
m fi
nanc
ial
serv
ice
inte
ract
ions
, and
this
can
be
effe
ctiv
ely
proc
esse
d as
‘big
dat
a’, t
his
info
rmat
ion
can
be
both
use
ful a
nd p
robl
emat
ic.
Con
ditio
ns: C
once
rns
aris
e w
hen
user
or
busi
ness
dat
a is
acc
essi
ble
for s
econ
dary
reus
e.
Inte
rdep
ende
ncie
s: M
ains
tream
and
lega
cy
syst
ems;
Tra
nspa
renc
y an
d op
acity
; C
omm
oditi
satio
n &
finan
cial
isat
ion.
Cas
e ex
ampl
es:
The
£B C
IC h
as li
mite
d qu
antit
ativ
e da
ta a
bout
£B
usa
ge: t
he B
CU
adm
inis
ters
the
£B a
ccou
nts,
le
adin
g to
priv
acy
issu
es a
roun
d th
e re
leas
e of
ba
nkin
g in
form
atio
n. B
y in
tera
ctin
g w
ith th
eir
mem
bers
face
to fa
ce o
r ove
r the
pho
ne, t
hey
colle
ct c
onsi
dera
ble
qual
itativ
e fe
edba
ck a
nd
can
build
up
an u
nder
stan
ding
abo
ut c
urre
ncy
use,
pro
blem
s us
ers
face
, or a
reas
that
will
build
op
erat
iona
l val
ue. T
he re
lativ
ely
smal
l size
of £
B op
erat
ions
mak
es th
is p
ossi
ble,
but
as
oper
atio
ns s
cale
, thi
s w
ill be
incr
easi
ngly
un
man
agea
ble.
The
CIC
reco
gnis
e th
at th
eir u
ser
base
are
like
ly (a
nd a
ble,
due
to it
s de
moc
ratic
m
anda
te) t
o re
sist
hig
h le
vels
of a
cces
s in
to th
eir
finan
cial
ly-r
elat
ed a
ctiv
ities
. The
CIC
are
als
o re
luct
ant t
o gi
ve u
sers
acc
ess
to e
xten
sive
ag
greg
ate
info
rmat
ion
or a
llow
use
r sha
ring
abou
t pat
tern
s of
spe
nd, e
ven
for s
hapi
ng e
thic
al
beha
viou
r as
they
feel
that
this
will
focu
s us
er
atte
ntio
n on
spe
ndin
g, ra
ther
than
bui
ld
com
mun
ity in
tera
ctio
n.
Zopa
act
ivel
y pr
esen
ts it
self
inte
rnal
ly a
nd
exte
rnal
ly a
s a
data
ana
lysi
s an
d m
arke
ting
firm
w
ith a
fina
ncia
l pro
duct
, rat
her t
han
envi
sion
ing
itsel
f as
a pu
rely
fina
ncia
l ser
vice
s fir
m.
Qua
litat
ive
and
quan
titat
ive
data
col
lect
ion
lie a
t th
e co
re o
f its
bus
ines
s, c
ontin
uous
ly re
shap
ing
its p
rodu
ct a
nd p
rese
ntat
ion.
Thi
s op
erat
es a
s a
sepa
rate
pro
cess
from
the
pres
enta
tion
of d
ata
to u
sers
, whi
ch h
as b
een
stre
amlin
ed a
nd
grad
ually
tran
sfor
med
into
tool
s an
d sy
stem
s m
ore
read
ily c
ompr
ehen
sibl
e by
a c
usto
mer
ba
se w
ith le
ss d
esire
to “g
o un
der t
he h
ood”
and
le
ss fa
milia
rity
with
com
plex
sof
twar
e an
d fin
anci
al to
ols.
How
ever
, it d
oes
perm
it us
ers
to
exam
ine
som
e of
the
finan
cial
mat
eria
l it
gene
rate
s, a
lthou
gh th
is is
hea
vily
cur
ated
in
way
s th
at Z
opa
feel
s is
app
ropr
iate
to s
hape
the
user
s’ c
ogni
tive
mod
els
of it
s bu
sine
ss
oper
atio
ns. Z
opa’
s op
erat
ion
is p
rese
nted
to
lend
ers
and
borro
wer
s as
sta
ndar
dise
d in
tere
st,
allo
win
g th
is m
etric
to b
e pr
esen
ted
to u
sers
as
bein
g (a
s ne
ar a
s po
ssib
le) c
ompa
rativ
e to
ban
k in
tere
st. O
ther
com
mer
cial
fina
ncia
l inf
orm
atio
n on
Zop
a is
ava
ilabl
e ex
tern
ally
, so
this
is n
ot a
co
mm
erci
ally
sen
sitiv
e is
sue,
but
a
pres
enta
tiona
l cho
ice.
!
Des
ign
Solu
tions
: Dev
elop
ing
finan
cial
ser
vice
s m
ay b
e ab
le to
det
erm
ine
the
info
rmat
ion
that
th
ey c
olle
ct w
ithou
t the
lega
cy is
sues
of
tradi
tiona
l ban
king
ser
vice
s an
d ou
tsid
e of
the
regu
lato
ry re
gim
e th
at w
ill be
of b
enef
it to
the
orga
nisa
tion
or to
its
user
s; o
n th
e ot
her h
and,
th
is in
form
atio
n m
ay n
ot b
e st
rate
gica
lly u
sefu
l to
anal
yse
or re
pres
ent e
ven
if de
emed
val
uabl
e.
Impl
icat
ions
: All:
use
rs v
alue
ser
vice
dat
a, b
ut
this
can
als
o pr
ovid
e si
gnifi
cant
pro
blem
s. F
or
regu
lators
: reg
ulat
ory
issu
es, r
egar
ding
acc
ess
to a
nd u
se o
f per
sona
l dat
a, fi
nanc
ial a
nd
othe
rwis
e, a
re c
ount
ry- o
r reg
ion-
spec
ific,
ca
usin
g po
tent
ial e
ffect
s on
info
rmat
ion
colle
ctio
n an
d us
age.
Few
if a
ny o
f the
se is
sues
ar
e un
ique
or n
ovel
, but
on-
goin
g ef
forts
to m
ine
and
appl
y so
cial
med
ia d
ata
may
cha
lleng
e us
ers’
priv
acy
expe
ctat
ions
, eve
n w
hen
the
law
su
ppor
ts fi
rms’
exp
loita
tion
of th
is d
ata.
Sect
ion
II. F
irm, U
sers
&
Tech
nolo
gy
!
SOC
IAL
CO
NN
ECTI
VITY
D
efin
ition
: dig
ital p
eer-
to-p
eer s
truct
ures
impl
y co
mpu
ter-
med
iate
d co
nnec
tions
bet
wee
n us
ers,
or
bet
wee
n th
e us
ers
and
a di
gita
l int
erm
edia
ry.
How
ever
, the
y do
not
det
erm
ine
the
exte
nt o
r sh
ape
of th
ese
conn
ectio
ns. W
hat f
orm
thos
e co
nnec
tions
take
dep
ends
upo
n a
wid
e ra
nge
of
soci
al a
nd te
chno
logi
cal f
acto
rs.
Issu
es: P
eer-
to-p
eer f
inan
cial
sys
tem
s fa
cilit
ate
conn
ectio
ns b
etw
een
trans
actin
g us
ers.
De
pend
ing
on th
e go
als
of th
e di
gita
l in
term
edia
ry, b
uild
ing
rich
conn
ectio
ns c
an
rang
e fro
m a
ctin
g as
a p
rimar
y fu
nctio
n (e
.g.
finan
cial
tran
sact
ions
del
iver
ing
a so
cial
goo
d),
or a
s a
seco
ndar
y, in
stru
men
tal f
unct
ion
in
conn
ectin
g pe
ers
to p
opul
ate
an in
tera
ctiv
e pl
atfo
rm to
con
duct
fina
ncia
l ope
ratio
ns o
ver.
C
ondi
tions
: Soc
iabi
lity
and
com
mun
ity g
row
ar
ound
the
finan
cial
inte
ract
ions
bet
wee
n us
ers,
an
d be
twee
n us
ers
and
the
digi
tal i
nter
med
iary
. So
ciab
ility
and
com
mun
ity re
latio
nshi
ps m
ay
also
bui
ld m
ore
effe
ctiv
e fin
anci
al in
tera
ctio
ns,
for e
.g. s
treng
then
ing
trust
bet
wee
n tra
nsac
tors
. Su
stai
ning
a s
ocia
l net
wor
k re
quire
s m
aint
aini
ng
exis
ting
conn
ectio
ns a
s w
ell a
s ex
pand
ing
to
new
con
nect
ions
. In
terd
epen
denc
ies:
Mem
bers
hip,
bra
nd a
ffini
ty
and
colle
ctiv
e id
entit
y; U
ser
Inte
ract
ions
& C
ompu
ter
Inte
rface
s; U
ser t
rust
.
Cas
e ex
ampl
es:
For t
he £
B, T
2P a
nd
pape
r not
es c
an o
pen
up
soci
al in
tera
ctio
ns w
ith a
ric
h se
nse
of c
onne
ctiv
ity.
T2P
requ
ire u
sers
to ta
lk to
one
ano
ther
mor
e th
an s
terli
ng o
r car
ds, a
nd th
e £B
con
nect
ion
to
com
mon
inte
rest
s be
twee
n us
ers
open
s op
portu
nitie
s to
bui
ld a
nd re
info
rce
a se
nse
of
soci
al c
onne
ctiv
ity. R
ecei
pt o
f pay
men
t pro
vide
s th
e na
me
of th
e sp
ende
r, al
low
ing
a pe
rson
al
touc
h to
inte
ract
ions
: ‘Th
anks
, Tom
. See
you
la
ter’.
Use
rs d
escr
ibed
this
as
acce
ptab
le
beca
use
it w
as a
loca
l, co
mm
unity
inte
ract
ion,
an
d m
ore
trust
ed th
an im
pers
onal
pay
men
ts to
na
tiona
l/mul
tinat
iona
l org
anis
atio
ns. N
otes
are
of
ten
circ
ulat
ed a
nd d
iscu
ssed
bet
wee
n fri
ends
as
cur
iosi
ties,
or g
iven
as
gifts
, fur
ther
bui
ldin
g so
cial
bon
ds. A
t ano
ther
leve
l, th
e £B
CIC
or
gani
ses
soci
al e
vent
s fo
r £B
mem
bers
to m
eet
and
regu
lar B
2B a
nd B
2C n
etw
orki
ng e
vent
s.
Ove
r tim
e, Z
opa’
s no
tions
of h
ow, a
nd h
ow
muc
h, to
con
nect
tran
sact
ing
peer
s ha
s sh
ifted
, m
ovin
g fro
m th
e di
gita
l to
the
met
apho
ric a
nd
phys
ical
. In
its e
arly
day
s, le
nder
s w
ere
able
to
acce
ss in
form
atio
n ab
out b
orro
wer
s (p
erso
nal,
borro
win
g ne
eds,
etc
.), a
nd to
mak
e le
ndin
g de
cisi
ons
arou
nd th
is. T
his
is n
o lo
nger
su
ppor
ted,
as
lend
ers
cont
ribut
e to
a lo
an
bask
et ra
ther
than
to in
divi
dual
s. M
ore
rece
ntly
, Zo
pa h
as a
ttem
pted
to c
onne
ct u
sers
and
bo
rrow
ers
rhet
oric
ally
in it
s ad
verti
sing
as
both
be
ing
finan
cial
ly “s
ensi
ble”
, thu
s at
tem
ptin
g to
bu
ild c
onne
ctio
ns b
etw
een
the
two
diffe
rent
gr
oups
. Zop
a st
ages
an
annu
al p
arty
nea
r its
of
fices
in L
ondo
n, a
ttend
ed a
lmos
t exc
lusi
vely
by
lend
ers,
som
e of
who
m h
ave
expr
esse
d a
desi
re to
ass
ert m
embe
rshi
p in
a “s
tatu
s ci
rcle
” of
like
-min
ded
pers
ons
of s
imila
r age
, cla
ss, a
nd
finan
cial
sop
hist
icat
ion.
Thi
s lim
ited
phys
ical
in
tera
ctio
n al
low
s Zo
pa to
con
trol t
he fr
eque
ncy
and
form
of s
ocia
l con
nect
ivity
mor
e th
an in
the
open
dig
ital d
iscu
ssio
n fo
rum
s th
at Z
opa
have
pu
shin
g fu
rther
and
less
acc
essi
bly
into
the
back
m
atte
r of t
heir
web
site
.
Des
ign
Solu
tions
: Rea
l per
sona
l con
nect
ions
ar
e va
lued
, and
the
form
of d
igita
l med
ia u
sed
in
trans
actio
ns a
nd o
ther
inte
ract
ions
(fac
e to
face
, so
cial
med
ia, d
elim
ited
inte
ract
ion)
bui
lds
user
co
nnec
tivity
and
mou
lds
how
it ta
kes
plac
e. !
Impl
icat
ions
: For
tech
nolo
gy, t
he ro
le o
f dig
ital
and
digi
tal m
edia
tion
is im
porta
nt: d
igita
l in
term
edia
ries
conn
ect p
oten
tial t
rans
acto
rs; t
his
is a
soc
ial a
s m
uch
as a
fina
ncia
l rel
atio
nshi
p.
For s
trate
gy a
nd m
anag
emen
t, so
cial
co
nnec
tivity
is s
een
as a
mea
ns o
f bui
ldin
g m
embe
rshi
p an
d id
entit
y, a
nd in
per
petu
atin
g an
d ac
cele
ratin
g th
e ta
ke-u
p of
fina
ncia
l se
rvic
es. A
s se
rvic
es e
volv
e, th
e ro
le a
nd fo
rm o
f so
cial
con
nect
ivity
may
requ
ire c
hang
e, w
ith
user
role
s ch
angi
ng fr
om ‘i
nter
actin
g in
divi
dual
s’
to ‘n
etw
orke
d pe
ers’
. U
ser I
mpa
cts.
All:
Soc
ial c
onne
ctiv
ity a
llow
s fo
r th
e ex
chan
ge o
f inf
orm
atio
n an
d co
ordi
natio
n am
ong
netw
orke
d pe
ers.
The
leve
l of
conn
ecte
dnes
s m
ay im
pact
on
leve
ls o
f en
gage
men
t, ra
ngin
g fro
m a
war
enes
s of
bei
ng
part
of a
larg
er g
roup
, to
activ
e pa
rtici
patio
n in
gr
oup
outc
omes
. Diff
eren
t use
r rol
es m
ay re
quire
di
ffere
nt le
vels
of e
ngag
emen
t. In
tera
ctio
n de
sign
ers
may
nee
d to
take
into
acc
ount
the
appr
opria
te le
vel o
f eng
agem
ent r
equi
red
and
desi
gn a
ccor
ding
ly. F
or e
ntre
pren
eurs
and
se
rvic
e m
anag
ers,
und
erst
andi
ng th
e fe
atur
es o
f th
e so
cial
dyn
amic
s in
here
nt in
the
netw
ork
coul
d le
ad to
insi
ghts
into
how
soc
ial
conn
ectiv
ity c
an b
e ex
pand
ed a
nd s
usta
ined
, an
d ho
w c
olle
ctiv
e ac
tion
can
be e
nabl
ed. F
or
regu
lato
rs, t
he m
anip
ulat
ion
of s
ocia
l int
erac
tion
will
affe
ct u
ser u
nder
stan
ding
s of
the
finan
cial
pr
oduc
t, an
d co
nseq
uent
ly h
ow it
is u
sed.
!
MEM
BERS
HIP
, BRA
ND
AFF
INIT
Y AN
D C
OLL
ECTI
VE ID
ENTI
TY
Def
initi
on: F
orm
al m
embe
rshi
p ac
ts a
s an
ac
cess
mod
el fo
r end
use
rs, a
llow
ing
prov
ider
s to
con
trol w
ho h
as a
cces
s to
whi
ch s
ervi
ces.
Se
rvic
es m
ay b
e di
ffere
ntia
ted,
with
diff
eren
t fo
rms
of a
cces
s av
aila
ble
to d
iffer
ent t
ypes
of
user
mem
bers
hip:
this
sha
pes
the
soci
al
stru
ctur
e of
the
com
mun
ity a
nd th
e en
suin
g co
sts/
bene
fits
of th
e se
rvic
e to
the
asso
ciat
ed
indi
vidu
als
or o
rgan
isat
ions
invo
lved
. Bra
ndin
g is
di
ffere
nt b
ut re
late
d to
mem
bers
hip
as it
relie
s (in
pa
rt) u
pon
invo
king
an
iden
tity
asso
ciat
ion
betw
een
user
and
pro
duct
, by
crea
ting
bran
d at
tribu
tes
that
the
user
feel
s th
ey g
ain
by
asso
ciat
ion.
Thi
s pr
oces
s is
con
side
red
to b
e m
ore
emot
ive
than
ratio
nal,
and
can
draw
from
a
wid
e ra
nge
of v
alue
s fo
r its
app
eal.
Both
m
embe
rshi
p an
d br
and
can
cont
ribut
e to
a
sens
e of
col
lect
ive
iden
tity
with
the
finan
cial
pr
oduc
t, th
e di
gita
l int
erm
edia
ry a
nd to
thei
r co-
user
s.
Issu
es: T
he s
ense
of c
olle
ctiv
e id
entit
y ar
ound
in
nova
tive
finan
cial
pro
duct
s is
prim
arily
sha
ped
thro
ugh
user
’s d
igita
l exp
erie
nces
. The
form
of
colle
ctiv
e id
entit
y ex
perie
nced
can
app
eal t
o se
vera
l diff
eren
t val
ues,
from
nov
elty
to
trust
wor
thin
ess,
the
polit
ical
to fa
milia
l; ho
w
thes
e ar
e de
sign
ed w
ill de
eply
affe
ct p
rodu
ct
enga
gem
ent.
Parti
cula
r fin
anci
al in
stru
men
ts a
nd
parti
cula
r sor
ts o
f tec
hnol
ogie
s m
ay s
ugge
st
som
e va
lues
mor
e th
an o
ther
s, b
ut d
igita
l in
term
edia
ries
have
wid
e la
titud
e in
def
inin
g th
e va
lues
to a
ssoc
iate
with
them
selv
es a
nd th
eir
user
s. T
he c
hoic
e of
com
pute
r int
erac
tion
met
hods
ava
ilabl
e ac
cord
ing
to u
ser
mem
bers
hip
type
, and
the
bran
d co
mm
unic
ated
(in
larg
e pa
rt, th
roug
h th
e di
gita
l des
ign)
will
ther
efor
e sh
ape
wha
t use
rs u
nder
stan
d ab
out
the
serv
ice,
wha
t the
y w
ill try
to d
o (in
divi
dual
ly
and
colle
ctiv
ely)
, and
how
they
val
ue it
. C
ondi
tions
: Inc
lusi
on/e
xclu
sion
crit
eria
de
term
ine
who
can
acc
ess
and
bene
fit fr
om th
e fin
anci
al s
ervi
ce. A
ssoc
iatin
g w
ith a
set
of v
alue
s ca
n di
ffere
ntia
te b
etw
een
sim
ilar s
ervi
ces.
In
terd
epen
denc
ies:
Fin
anci
al e
colo
gies
; Soc
ial
conn
ectiv
ity; U
ser i
nter
actio
ns &
com
pute
r in
terfa
ces.
C
ase
exam
ples
: Th
e ro
le o
f pla
ce a
nd £
B m
embe
r ide
ntity
are
hi
ghly
inte
rdep
ende
nt. P
lace
is in
stitu
tiona
lized
in
£B
mem
bers
hip
crite
ria (m
embe
rs h
ave
to li
ve
and/
or c
ondu
ct b
usin
ess
in th
e lo
cal a
rea)
, re
info
rced
thro
ugh
CIC
mar
ketin
g: “
Love
Bris
tol.
Go
Loca
l”. T
rade
r mem
bers
hip
requ
ires
dem
onst
ratin
g a
fit w
ith th
e £B
val
ues
(eth
ical
, gr
een)
, and
this
impa
cts
on in
tera
ctio
ns w
ith
ordi
nary
mem
bers
in m
akin
g sp
endi
ng d
ecis
ions
an
d on
soc
ial i
nter
actio
ns w
ith tr
ader
s. T
2P a
lso
requ
ires
user
s to
live
or w
ork
in B
risto
l, fu
rther
bu
ildin
g a
sens
e of
com
mun
ity. T
he p
rinte
d £B
ha
s no
rest
rictio
ns o
n its
acc
ess
and
use,
al
low
ing
non-
£B m
embe
r use
rs to
ass
ocia
te w
ith
its v
alue
s to
feel
a s
ense
of b
elon
ging
to th
e £B
co
mm
unity
with
out h
avin
g of
ficia
lly ‘s
igne
d up
’.
Zopa
’s b
rand
iden
tity
is fo
rmed
aro
und
the
key
wor
d “s
ensi
ble”
, whi
ch is
use
d to
dis
tingu
ish
its
borro
wer
s an
d le
nder
s, a
s w
ell a
s th
e fir
m it
self,
fro
m th
e ex
cess
es o
f glo
bal b
anki
ng o
n th
e on
e ha
nd a
nd th
e im
agin
ed s
pend
thrif
t pat
tern
s of
sh
ort-
term
or “
payd
ay”
borro
wer
s an
d th
e fir
ms
with
pre
dato
ry le
ndin
g pr
actic
es o
n th
e ot
her.
This
iden
tity
elid
es a
ge, g
eogr
aphy
, and
inco
me
dist
ribut
ions
bet
wee
n bo
rrow
ers
and
lend
ers,
bu
t crit
ical
ly p
ositi
ons
Zopa
as
a le
gitim
ate
alte
rnat
ive
to tr
aditi
onal
hig
h st
reet
ba
nks.
Col
lect
ive
iden
tity
is m
uch
mor
e of
a
fact
or fo
r len
ders
than
bor
row
ers.
Len
ders
are
m
ore
likel
y to
see
k to
kens
of i
dent
ifica
tion
with
a
peer
gro
up, a
nd h
ave
been
sho
wn
to p
refe
r ph
otos
of o
ther
lend
ers
in te
stim
onia
ls, i
n or
der
to re
ad s
igns
of s
imila
rity.
The
y ar
e al
so m
ore
likel
y to
bec
ome
invo
lved
in o
fflin
e an
d on
line
com
mun
ity in
tera
ctio
ns. B
orro
wer
s ap
pear
mor
e tra
nsac
tiona
l and
inte
rest
ed in
obt
aini
ng lo
w-
cost
loan
s ra
ther
than
est
ablis
hing
an
iden
tity
arou
nd th
eir f
inan
cial
pro
duct
s, p
erha
ps in
hibi
ted
by th
e so
cial
stig
ma
surro
undi
ng d
ebt.
D
esig
n So
lutio
ns: M
echa
nism
s th
at h
elp
build
co
llect
ive
iden
tity
supp
ort s
trong
er e
ngag
emen
t be
twee
n pe
ers
usin
g fin
anci
al s
ervi
ces.
Dig
itally
su
ppor
ted
and
onlin
e co
mm
unity
-bui
ldin
g of
fers
ad
vant
ages
in u
ser b
uy-in
and
com
mitm
ent.
Im
plic
atio
ns: A
ll: M
embe
rshi
p cr
iteria
and
bra
nd
affin
ity s
hape
the
norm
s an
d pr
actic
es a
roun
d ho
w p
eopl
e in
the
grou
p co
llabo
rate
and
acc
ess
info
rmat
ion
and
cons
truct
in th
e pr
oces
s a
colle
ctiv
e id
entit
y. In
tera
ctio
n de
sign
ers
coul
d dr
aw in
spira
tion
from
the
user
gro
up it
self
with
pa
rtici
pato
ry d
esig
n te
chni
ques
. For
tech
nolo
gy
deve
lope
rs a
nd fi
nanc
ial s
trate
gist
s, th
e fo
rm o
f co
llect
ive
iden
tity
built
aro
und
finan
cial
re
latio
nshi
ps is
bot
h lim
ited
by m
embe
rshi
p in
clus
ion
crite
ria a
nd in
fluen
ces
user
inte
nts.
D
ebt a
ppea
rs to
be
cons
ider
ed le
ss o
f a d
river
fo
r bui
ldin
g co
llect
ive
iden
tity.
For
ent
repr
eneu
rs
and
serv
ice
man
ager
s, it
may
be
usef
ul to
co
nsid
er w
heth
er n
ot a
dher
ing
to th
e in
clus
ion
crite
ria im
plie
s th
at th
ose
indi
vidu
als
are
parti
ally
or
fully
shu
t out
of t
he s
ervi
ces.
Tho
se w
ho a
re
excl
uded
may
be
able
to c
ontri
bute
in
sign
ifica
nt, a
lbei
t diff
eren
t, w
ays.
USE
R T
RU
ST
Def
initi
on: T
o in
itial
ly a
dopt
and
kee
p us
ing
peer
-to-
peer
fina
ncia
l ins
trum
ents
, use
rs n
eed
to
over
com
e in
here
nt u
ncer
tain
ties
to b
uild
up
a de
gree
of t
rust
in th
e tra
nsac
tions
, the
dev
ices
, th
e or
gani
satio
ns in
volv
ed, t
he in
divi
dual
s in
volv
ed, a
nd th
e va
rious
net
wor
ked
com
pone
nts
that
mak
e up
the
peer
-to-
peer
fin
anci
al s
yste
m. I
n th
e in
tere
sts
of th
e st
abilit
y of
the
finan
cial
sys
tem
and
con
sum
er p
rote
ctio
n,
regu
lato
ry b
odie
s es
tabl
ish
rule
s an
d pe
rform
m
onito
ring
of fi
nanc
ial i
nstit
utio
ns, w
hich
en
sure
s th
at if
they
per
form
in a
n un
trust
wor
thy
way
, the
re a
re le
gal i
mpl
icat
ions
.
Issu
es: P
eer-
to-p
eer a
nd o
ther
non
-ban
k fin
anci
al s
yste
ms
oper
ate
eith
er o
utsi
de o
f the
tra
ditio
nal r
egul
ator
y en
viro
nmen
t, an
d he
nce
cann
ot re
ly o
n re
gula
tion
to d
rive
trust
, or t
hey
have
to fi
nd n
ew w
ays
of o
pera
ting
with
in th
e es
tabl
ishe
d re
gula
tory
sys
tem
. Whe
re th
ese
serv
ices
are
not
a p
art o
f the
fina
ncia
l m
ains
tream
, use
rs a
lso
cann
ot re
ly o
n ex
istin
g ne
twor
ks o
f tru
st in
thei
r bra
nd. P
eer-
to-p
eer
orga
nisa
tions
may
als
o ha
ve to
ove
rcom
e ad
vers
e m
isco
ncep
tions
and
mis
attri
butio
ns
asso
ciat
ed w
ith th
eir u
se (e
.g. i
llega
l file
shar
ing,
bi
tcoi
n cr
imin
ality
); no
n-st
anda
rd m
etho
ds o
f fin
anci
al o
pera
tion
will
sim
ilarly
hav
e to
ov
erco
me
user
dou
bt o
ver t
heir
oper
atio
nal
legi
timac
y, d
igita
l and
fina
ncia
l sec
urity
, and
or
gani
satio
nal l
onge
vity
, all
with
in a
n en
viro
nmen
t in
whi
ch u
sers
feel
they
may
hav
e a
pote
ntia
l for
sub
stan
tial f
inan
cial
loss
.
Con
ditio
ns: I
f use
rs d
o no
t tru
st th
e op
erat
ions
of
dig
ital i
nter
med
iarie
s, th
ey w
ill w
ithdr
aw th
eir
cust
om. T
rust
may
ope
rate
at a
num
ber o
f lev
els,
fro
m th
e fin
anci
al re
gula
tions
in p
lace
, dow
n to
the
form
of s
ocia
l con
nect
ions
invo
lved
in in
re
solv
ing
trans
actio
nal p
robl
ems.
Inte
rdep
ende
ncie
s: S
ocia
l con
nect
ivity
; Tr
ansp
aren
cy a
nd o
paqu
enes
s.
Cas
e ex
ampl
es: U
sers
’ con
fiden
ce in
the
digi
tal
£B p
aym
ents
sys
tem
was
inex
trica
bly
linke
d w
ith
the
inte
rper
sona
l con
nect
ions
bet
wee
n th
em:
paym
ents
are
face
-to-
face
, em
bedd
ed in
pr
oxim
al s
ocia
l rel
atio
ns, a
nd th
is e
nabl
es
reci
proc
atio
n of
com
mon
con
cern
s. T
hese
are
no
t fas
t-pa
ced,
ano
nym
ous
trans
actio
ns th
at
take
pla
ce in
the
abse
nce
of ri
ch s
ocia
l cue
s.
This
allo
ws
delic
ate
judg
emen
ts to
be
mad
e in
an
inte
ract
ive
proc
ess
that
take
s pl
ace
over
tim
e.
Use
rs a
lso
trust
ed th
e SM
S sy
stem
und
erly
ing
digi
tal p
aym
ents
: use
rs w
ere
fam
iliar w
ith th
is,
and
had
expe
ctat
ions
aro
und
its tr
ansm
issi
on
spee
d an
d lik
elih
ood
of fa
ilure
– m
oreo
ver,
they
at
tribu
ted
this
trus
t in
SMS
to a
spec
ts o
f the
fin
anci
al tr
ansa
ctio
n fu
rther
on
dow
n th
e pr
oces
s th
at th
ey u
nder
stoo
d le
ss. T
he n
otes
wer
e al
so
trust
ed: t
hese
hav
e a
high
qua
lity,
exp
ensi
ve
‘look
and
feel
’, w
ith s
ecur
ity fe
atur
es o
n th
em.
With
rega
rds
to th
e tra
nsac
tiona
l val
ue,
purc
hase
s w
ere
usua
lly lo
w v
alue
, so
that
use
rs
and
trade
rs w
ould
not
take
a la
rge
finan
cial
‘hit’
if
diffi
culti
es e
mer
ged.
With
Zop
a, u
ser t
rust
is fo
rmed
from
a c
ompl
ex
inte
rpla
y of
fact
ors
incl
udin
g fa
milia
rity
of th
e te
chno
logy
; rat
es a
nd te
rms
of th
e fin
anci
al
inst
rum
ents
them
selv
es; g
over
nmen
tal
regu
latio
n; e
ndor
sem
ent (
parti
cula
rly b
y fin
anci
al
TV c
omm
enta
tors
); ad
optio
n by
thei
r pee
r gro
up;
and
the
firm
bei
ng s
een
as h
avin
g ac
cess
ible
, do
mes
tic, i
dent
ifiab
ly B
ritis
h of
fices
, and
em
ploy
ees
who
can
be
cont
acte
d by
tele
phon
e.
Des
ign
Solu
tions
: Con
sist
ent,
wel
l-des
igne
d us
er in
tera
ctio
ns a
nd m
edia
are
con
side
red
to b
e in
dica
tors
of i
nteg
rity.
Fee
dbac
k on
use
rs’ s
tatu
s
on-g
oing
fina
ncia
l int
erac
tion
supp
orts
tru
stw
orth
ines
s in
the
proc
ess,
as
does
the
abilit
y to
con
nect
with
oth
er p
eopl
e (a
s pe
ers
or
the
orga
nisa
tion)
to a
sses
s re
puta
tion
and
mak
e va
lue
judg
emen
ts a
roun
d tra
nsac
tiona
l pro
gres
s.
Use
of w
ell-u
nder
stoo
d di
gita
l med
ia a
nd
plat
form
s cr
eate
s a
basi
s fo
r bui
ldin
g tru
st.
Impl
icat
ions
: All:
trus
t in
finan
cial
ser
vice
s is
ha
rd w
on a
nd e
asily
lost
. Fin
anci
al s
yste
ms
outs
ide
the
bank
ing
syst
em c
onte
nd w
ith s
erio
us
issu
es a
roun
d us
er tr
ust,
parti
cula
rly if
the
syst
em is
opa
que
and
user
s fin
d it
diffi
cult
to
expl
ain
beha
viou
rs o
r situ
atio
ns. I
nter
actio
n de
sign
ers
shou
ld b
e at
tent
ive
to th
e di
ffere
nces
in
use
rs’ e
xpec
tatio
ns a
nd a
ctua
l beh
avio
urs
of
the
syst
em. F
or fi
nanc
ial s
trate
gist
s an
d sy
stem
s de
velo
pers
, the
re is
no
sim
ple
form
ula
for t
he
idea
l bal
ance
am
ong
trust
-rel
ated
fact
ors,
or a
ra
nkin
g of
rela
tive
impo
rtanc
e. F
acto
rs m
ay b
e dy
nam
ical
ly in
terd
epen
dent
, mea
ning
that
fin
anci
al in
term
edia
ries
mus
t bea
r eac
h fa
ctor
in
min
d w
ith e
very
cha
nge
to th
e bu
sine
ss, a
nd
mus
t be
capa
ble
of re
spon
ding
on
all f
ront
s to
ch
ange
s in
its
envi
ronm
ent.
For e
ntre
pren
eurs
an
d se
rvic
e m
anag
ers,
it is
use
ful t
o co
nsid
er th
e w
ays
in w
hich
use
rs b
uild
trus
t in
the
syst
em a
nd
how
it a
llow
s th
em to
reco
ver w
hen
thin
gs g
o w
rong
. For
regu
lato
rs, u
sers
ofte
n se
e re
gula
tion
as le
gitim
isin
g th
e se
rvic
e as
a w
hole
, with
use
rs
unab
le to
diff
eren
tiate
bet
wee
n th
e pa
rts
conc
erne
d.!W
e fre
quen
tly h
eard
from
re
spon
dent
s th
at re
quire
d di
sclo
sure
s (“l
egal
ese”
) und
erm
ined
thei
r tru
st in
, and
w
illing
ness
to u
se d
igita
l fin
anci
al p
rodu
cts.
C
onsi
dera
tion
of in
terp
lay
in u
ser e
xper
ienc
e de
sign
and
dis
clos
ure
requ
irem
ents
to fi
nd a
n ef
fect
ive
bala
nce
betw
een
disc
losu
re-b
ased
re
gula
tory
sys
tem
s an
d co
nfid
ence
-bas
ed o
nes,
as
they
may
app
ly to
dig
ital f
inan
cial
te
chno
logi
es is
reco
mm
ende
d.
RIS
K &
MIT
IGAT
ION
D
efin
ition
: Ris
k he
re in
volv
es th
e po
tent
ial f
or
finan
cial
loss
, to
the
user
of o
r to
the
digi
tal
inte
rmed
iary
, and
aris
es o
ut o
f act
ion
(or
inac
tion)
und
er c
ondi
tions
of u
ncer
tain
ty.
Prov
ider
s of
inno
vativ
e fin
anci
al in
stru
men
ts
need
to c
onsi
der t
he ri
sks
inhe
rent
in th
e in
dust
ry. R
isks
nee
d to
be
iden
tifie
d, a
sses
sed
for s
ever
ity a
nd m
itiga
ted.
Ope
ratin
g ou
tsid
e th
e tra
ditio
nal b
anki
ng s
ecto
r exp
oses
alte
rnat
ive
finan
cial
ser
vice
pro
vide
rs to
sev
eral
add
ition
al
risks
that
rang
e in
impa
ct, f
or th
e w
orst
cas
e in
th
e se
rvic
e co
llaps
ing,
to le
ss d
ram
atic
but
da
mag
ing
issu
es s
uch
as lo
ss o
f tru
st, w
eake
ned
bran
d id
entit
y, o
r ena
blin
g co
mpe
titor
ad
vant
age.
Is
sues
: Ove
r tim
e an
d as
a fi
nanc
ial s
ervi
ce
grow
s, ri
sks
chan
ge a
nd p
rovi
ders
will
have
to
adap
t to
the
chan
ging
circ
umst
ance
s, fo
r e.g
., at
titud
es to
regu
latio
n m
ay c
hang
e. T
hus,
whi
le
loca
l cur
renc
ies
are
smal
l mov
emen
ts in
co
mpa
rison
to th
e na
tiona
l UK
econ
omy,
this
co
uld
chan
ge, a
nd th
e fu
ture
app
licat
ion
of
regu
latio
ns m
ay h
ave
an u
nexp
ecte
d im
pact
on
the
cour
se o
f the
ir de
velo
pmen
t ove
r tim
e. U
sers
al
so fa
ce ri
sk in
thei
r int
erac
tions
with
em
ergi
ng
finan
cial
ser
vice
s, a
nd h
ow in
stitu
tions
pro
vide
re
sour
ces
to th
em –
thro
ugh
the
digi
tal a
nd n
on-
digi
tal i
nfra
stru
ctur
es th
at th
ey a
ct th
roug
h –
will
affe
ct u
ser a
ttitu
des
to th
is ri
sk
and
thei
r sub
sequ
ent f
inan
cial
in
tera
ctio
ns.
Con
ditio
ns: S
ome
sour
ces
of ri
sk in
clud
e th
e di
gita
l te
chno
logi
es u
sed
in
deliv
erin
g th
e fin
anci
al
serv
ice,
the
chan
ging
envi
ronm
ent i
n w
hich
the
serv
ice
oper
ates
, or
gani
zatio
nal s
truct
ure
and
gove
rnan
ce
proc
esse
s of
the
firm
s of
ferin
g th
e se
rvic
e.
Inte
rdep
ende
ncie
s: R
egul
atio
n an
d fin
anci
al
ecol
ogie
s; S
ocia
l con
nect
ivity
; Use
r int
erac
tions
&
com
pute
r int
erfa
ces;
Use
r tru
st.
Cas
e ex
ampl
es:
The
£B C
IC fa
ces
seve
ral r
isks
uni
que
to
esta
blis
hing
and
sus
tain
ing
a w
orki
ng c
urre
ncy
alon
gsid
e a
stro
ng n
atio
nal,
sove
reig
n cu
rrenc
y –
ster
ling.
Fea
ture
s bu
ilt in
to th
e m
oney
itse
lf, a
s w
ell a
s th
e w
ork
the
CIC
car
ry o
ut in
the
loca
l co
mm
unity
ser
ve to
pre
vent
aga
inst
the
curre
ncy
goin
g ou
t of c
ircul
atio
n: th
e cu
rrenc
y ha
s an
ex
piry
dat
e on
the
note
s to
gua
rd a
gain
st
hoar
ding
, tra
nsac
tion
cost
s as
soci
ated
with
co
nver
ting
£B b
ack
into
ste
rling
, and
initi
ativ
es
that
link
up
prim
ary
prod
ucer
s w
ith lo
cal o
utle
ts,
and
loca
l out
lets
with
cus
tom
ers.
Oth
er fe
atur
es
prot
ect a
gain
st fr
aud,
suc
h as
pas
swor
d pr
otec
ting
digi
tal t
rans
actio
ns, a
nd s
peci
al in
k on
th
e pr
inte
d m
oney
. The
risk
of f
ailu
re o
f a
paym
ent t
o go
thro
ugh
is m
itiga
ted
thro
ugh
the
soci
al a
nd lo
cal r
elat
ions
hips
hel
d be
twee
n pa
rtici
pant
s in
the
trans
actio
n.
Risk
man
agem
ent i
s pe
rhap
s th
e co
re a
nd
diffe
rent
iatin
g se
rvic
e th
at Z
opa
offe
rs it
s cu
stom
ers:
uni
nsur
ed b
orro
wer
def
ault
is a
co
ncer
n to
lend
ers.
Zop
a’s
busi
ness
mod
el is
ba
sed
upon
mai
ntai
ning
a lo
wer
def
ault
rate
on
its lo
ans
than
that
tole
rate
d by
hig
h st
reet
ban
ks,
let a
lone
sho
rt-te
rm o
r “pa
yday
” len
ding
se
rvic
es. C
urre
ntly
it re
lies
upon
trad
ition
al
met
rics
and
third
-par
ty s
ervi
ces,
aug
men
ted
by
a pr
oprie
tary
alg
orith
m, f
or d
eter
min
ing
borro
wer
s’ c
redi
twor
thin
ess,
bac
ked
by m
anua
l un
derw
ritin
g of
eac
h lo
an. T
his
syst
em m
ay n
ot
cont
inue
to s
cale
, and
the
firm
has
exp
erim
ente
d w
ith n
ovel
risk
mea
sure
men
ts s
uch
as m
etric
s dr
awn
from
soc
ial m
edia
dat
a, b
ut h
as y
et to
find
an
y w
hich
it re
gard
s as
sup
erio
r to
tradi
tiona
l m
eans
of c
redi
t ana
lysi
s. A
s Zo
pa is
not
a
depo
sit-t
akin
g in
stitu
tion,
its
loan
inst
rum
ents
ar
e no
t elig
ible
for g
over
nmen
tal d
epos
it in
sura
nce,
a m
ajor
sou
rce
of u
ser c
onfid
ence
an
d tru
st. I
n re
spon
se, Z
opa
has
deve
lope
d a
self-
insu
ranc
e sy
stem
cal
led
‘Saf
egua
rd’ t
o pr
ovid
e a
sim
ilar s
ervi
ce th
at it
pro
mot
es to
m
itiga
te ri
sk to
its
lend
ers.
D
esig
n So
lutio
ns: F
or a
fina
ncia
l ser
vice
, the
po
tent
ial f
or fi
nanc
ial l
oss,
and
the
perc
eptio
n of
th
is, u
nder
pins
use
r tru
st a
nd th
e lik
ely
succ
ess
of a
ser
vice
, dig
ital o
r oth
erw
ise.
As
cons
umer
us
ers
may
find
it d
iffic
ult t
o as
sess
act
ual r
isk,
di
gita
l ser
vice
s m
ay b
e ab
le to
util
ise
soci
al
conn
ectiv
ity to
thei
r adv
anta
ge. P
revi
ous
Zopa
so
lutio
ns o
n al
low
ing
lend
ers
to s
ee in
form
atio
n pr
ovid
ed b
y bo
rrow
ers
supp
orte
d bu
ildin
g of
tru
st ju
dgem
ents
, and
thes
e ki
nds
of s
ocia
l co
nnec
tions
can
allo
w c
onsu
mer
use
rs to
brin
g th
eir (
non-
spec
ialis
t) sk
ills in
to p
lay
to m
ake
mor
e in
form
ed ju
dgem
ents
.
Impl
icat
ions
: The
ISO
ser
ies
prov
ides
exi
stin
g fra
mew
orks
for m
anag
ing
risks
with
resp
ect t
o te
chno
logy
reso
urce
s. In
tera
ctio
n de
sign
ers
can
alle
viat
e ris
k by
eva
luat
ing
new
tech
nolo
gies
with
us
ers,
or c
ondu
ctin
g sm
all p
ilot s
tudi
es b
efor
e re
leas
ing
the
tech
nolo
gy to
a w
ider
aud
ienc
e.
For r
egul
ator
s, w
e ha
ve s
een
little
to s
ugge
st
that
eva
luat
ion
of in
vest
men
t ris
k or
firm
-leve
l ris
k di
ffers
mat
eria
lly in
the
cont
ext o
f ret
ail-l
evel
di
gita
l fin
anci
al in
stru
men
ts. C
urre
nt s
yste
ms
appe
ar to
dat
e to
be
adeq
uate
in p
reve
ntin
g fra
ud, a
nd h
ave
been
affi
rmat
ivel
y so
ught
by
seve
ral f
irms,
to b
uild
use
r and
inve
stor
trus
t.
REG
ULA
TIO
N &
FIN
ANC
IAL
ECO
LOG
IES
Def
initi
on: F
inan
cial
ser
vice
pro
vide
rs o
pera
te
with
in a
larg
er fi
nanc
ial s
yste
m in
whi
ch d
iffer
ent
digi
tal t
echn
olog
ies,
regu
latin
g bo
dies
, and
the
finan
cial
ser
vice
s th
emse
lves
are
con
nect
ed to
on
e an
othe
r in
a va
riety
of w
ays
that
cre
ate
an
ecol
ogy
of in
tera
ctin
g an
d in
terc
onne
cted
sy
stem
s.
Issu
es: F
or d
igita
l ser
vice
s to
rem
ain
sust
aina
ble
and
robu
st, p
rovi
ders
nee
d to
und
erst
and
the
hum
an a
nd d
igita
l inf
rast
ruct
ures
, and
the
links
be
twee
n th
em th
at m
ake
up th
eir f
inan
cial
ec
osys
tem
s. T
hese
ele
men
ts s
et th
e co
nditi
ons
for h
ow th
e fin
anci
al s
ervi
ce m
ay g
row
, lin
k w
ith
othe
r ser
vice
s, in
nova
te n
ew s
ervi
ces
and
disr
upt t
he s
tatu
s qu
o. P
oor c
onne
ctio
ns
betw
een
thes
e el
emen
ts c
an le
ad to
issu
es
rang
ing
from
ser
vice
aba
ndon
men
t at i
ts
extre
me,
to re
duce
d le
vels
of e
ngag
emen
t and
pr
oble
ms
in m
akin
g on
-dem
and
finan
cial
tra
nsac
tions
.
Con
ditio
ns: T
he fi
nanc
ial e
colo
gy is
ch
arac
teris
ed b
y th
e di
vers
ity in
its
cons
titut
ive
elem
ents
, whi
ch in
clud
e te
chni
cal,
geog
raph
ical
an
d in
stitu
tiona
l com
pone
nts.
Inte
rdep
ende
ncie
s: U
ser t
rust
; Mai
nstre
am a
nd
lega
cy te
chno
logi
es; R
isk
& m
itiga
tion.
Cas
e ex
ampl
es:
Befo
re la
unch
ing
the
curre
ncy,
the
£B C
IC
cond
ucte
d a
feas
ibilit
y st
udy
to id
entif
y st
akeh
olde
rs, o
btai
n bu
y-in
from
bus
ines
ses
and
crea
te in
cent
ives
for j
oini
ng. T
he C
IC w
orks
in
clos
e pa
rtner
ship
with
the
BCU
to p
rovi
de d
igita
l
£B a
ccou
nts
to it
s m
embe
rs. T
he C
IC re
lies
on
exis
ting
mob
ile p
hone
tech
nolo
gy (S
MS)
and
op
en-s
ourc
e so
ftwar
e (Q
oin)
to e
nabl
e di
gita
l tra
nsac
tions
. The
CIC
man
ages
the
£B a
s a
com
plem
enta
ry c
urre
ncy
alon
gsid
e th
e st
erlin
g is
sued
by
the
Bank
of E
ngla
nd, b
y en
surin
g th
at
the
prin
ted
£B fu
nctio
ns a
s a
vouc
her w
ith a
n ex
piry
dat
e. T
he B
risto
l City
Cou
ncil
supp
orts
the
effo
rts o
f the
CIC
by
acce
ptin
g co
unci
l tax
pa
ymen
ts in
£B.
The
CIC
wor
ks to
est
ablis
h an
d in
crea
se th
e lin
ks in
the
verti
cal m
arke
t to
faci
litat
e £B
use
. The
se in
terd
epen
denc
ies
are
both
wha
t mak
es th
e £B
func
tion
and
succ
essf
ul, a
s w
ell a
s pr
ovid
ing
the
pote
ntia
l pr
oble
ms
as a
ny o
f the
se c
ompo
nent
s ch
ange
s,
or fa
ils to
pro
vide
a s
uita
ble
leve
l of s
uppo
rting
se
rvic
e.
Unl
ike
the
£B, Z
opa
has
a gr
eat d
eal o
f con
trol
over
its
prop
rieta
ry s
oftw
are
syst
ems,
alth
ough
it
still
face
s ch
alle
nges
in it
s di
gita
l int
er-
conn
ectio
ns w
ith th
e fin
anci
al a
nd b
anki
ng
sect
ors
(e.g
. use
r pay
men
ts in
to th
eir s
yste
m;
third
-par
ty c
redi
t ass
essm
ent s
ervi
ces)
. H
owev
er, i
t fac
es a
par
ticul
ar c
halle
nge
arou
nd
issu
es o
f fin
anci
al re
gula
tion
due
to it
s te
chno
logy
pla
tform
and
dig
ital a
rchi
tect
ure.
Zo
pa’s
bus
ines
s m
odel
is d
esig
ned
arou
nd, a
nd
uniq
ue to
, the
Brit
ish
finan
cial
regu
lato
ry s
yste
m.
Amer
ican
p2p
lend
ing
has
beco
me
dom
inat
ed
by in
stitu
tiona
l, ra
ther
than
indi
vidu
al, r
etai
l in
vest
ors,
as
a re
sult
of th
e p2
p co
ntra
ct b
eing
re
gula
ted
as a
“se
curit
y” in
the
US.
Zop
a ac
tivel
y so
ught
out
regu
latio
n fo
r the
p2p
fina
nce
indu
stry
in th
e U
K, w
orki
ng w
ith th
e Fi
nanc
ial
Serv
ices
Boa
rd to
des
ign
a re
gula
tory
stru
ctur
e fo
r p2p
lend
ing
(the
P2P
Fina
nce
Asso
ciat
ion)
, in
the
belie
f tha
t FSB
regu
latio
n w
ould
lead
to
grea
ter c
onsu
mer
trus
t and
acc
epta
nce.
Thi
s re
gula
tion
has
resu
lted
in c
hang
es to
the
web
site
te
rmin
olog
y an
d co
nten
t, an
d co
ntin
ues
to p
ose
chal
leng
es o
f bal
anci
ng tr
ust v
ia d
iscl
osur
e, th
e m
odel
und
erly
ing
finan
cial
regu
lato
ry s
yste
ms,
an
d tru
st v
ia s
impl
icity
, Zop
a’s
user
exp
erie
nce
desi
gn m
odel
.
Des
ign
Solu
tions
: Ret
aini
ng, o
r dev
elop
ing
in-
hous
e fin
anci
al s
ervi
ces
is o
ne a
ppro
ach
to
redu
cing
dep
ende
ncie
s on
ext
erna
l pro
vide
rs
whe
re th
ese
are
likel
y to
pro
vide
bre
akdo
wns
or
bottl
enec
ks.
Impl
icat
ions
: All:
Solu
tions
to d
igita
l in
term
edia
ry d
esig
n th
at re
ly o
n ex
tern
al s
ervi
ces
carry
inhe
rent
ly g
reat
er c
ompl
exity
and
risk
. For
fin
ancia
l stra
tegi
sts a
nd sy
stem
des
igne
rs,
relia
nce
on e
xter
nal s
ervi
ces
is p
artic
ular
ly
prob
lem
atic
as
finan
cial
act
iviti
es s
cale
up,
and
w
here
an
exte
rnal
ser
vice
may
be
unab
le to
co
pe. T
his
may
be
exac
erba
ted
as n
ew fo
rms
of
serv
ice
prov
oke
expo
nent
ial a
dditi
onal
dem
ands
on
exi
stin
g pl
atfo
rms
unab
le to
cop
e w
ith th
is
traffi
c (e
.g. u
sers
car
ryin
g ou
t mul
tiple
ba
ckgr
ound
che
cks
in p
aral
lel t
o op
timis
e fin
anci
al p
erfo
rman
ce).
Both
ent
repr
eneu
rs a
nd
serv
ice m
anag
ers w
ill re
quire
an
unde
rsta
ndin
g of
the
cons
titut
ive
elem
ents
of t
he fi
nanc
ial
ecol
ogy
– di
gita
l, fin
anci
al, a
nd re
gula
tory
- in
w
hich
thei
r ser
vice
will
oper
ate
and
the
regu
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7. Future Outlook 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, which include the following areas:
• New ‘form factor’ devices available to consumers, such as wearable devices, personal or environmental sensors, or deformable interactive displays.
• The proliferation of internet-enabled, always connected objects that make up the “Internet of things”. It is likely that these will allow users to access and interact with aspects of our financial lives, create new forms of value that we can transact with, but also to make visible parts of our financial activity that were previously considered private.
• Changing expectations of users around the performance, responsiveness and breadth of services. ‘Better’ services do not always create more satisfaction, but may instead create more demand.
• The continuing integration of social connectivity and sharing into our digital lives via social media. These are likely to impact at a range of levels and across a wide set of financially-relevant factors. Users may be able to see what their peers are doing to help shape their own behaviours, but they are also potentially opening up their financial activities to inspection and exploitation by others.
• The there are a huge range of analytical opportunities offered by the “big data” generated by our devices, allowing users to benefit from tailored financial services, organisations to optimise their products and services, but also for this valuable, highly personal, financial information to be misused or used in ways that disadvantage their users.
Managing these issues so that they are addressed appropriately is critical to ensure that the financial services offered by alternative, digital intermediary providers remain credible.
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Of course, this toolkit is not a complete picture of the landscape of existing and future digital intermediaries, but we hope that it will offer an interesting and useful set of issues to consider and directions to take in your own work. It also cannot cover all of the material that we have uncovered in our research ‘in the wild’ at the two partner organisations that we have worked with, and interested readers are encouraged to explore the other materials that we have documented in the accompanying reports and project deliverables. To the users of this toolbox, the elements of design that have been covered are deliberately intended to be relatively simple and brief; for areas that need more detailed thought, there are resources to make more complete sense of this. However, these elements should be considered as a simple, structured resource that can be used to draw people together from different disciplines and with different expertise and experience into a discussion so that they can use a common language and draw from easily understood examples in making decisions. If you have used it, please let us know, and what you found useful! We’d be delighted to know how it has been used so that we can develop these areas more in the future. You can contact us via the project website, or directly – our details are listed overleaf. We’re interested in following up this work in the future, so if you would like to be involved, please let us know. Finally, we would like to thank our partner organisations and the people in them who have been so helpful to us – the Bristol Pound and Zopa. We wish them the best of luck in navigating the tricky and changing waters that come of being a digital intermediary. Professor Sriram Subramanian, a co-investigator on this project at Bristol University, who deserves particular commendation for conceiving the initial idea of the project, without which this work would never have happened. We would also like to thank the participants who patiently took part in our interviews, questionnaires, workshops and observations. Thank you all.
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8. Report Contributors Dr Mark Perry is a Reader at Brunel University, looking at the design of ubiquitous and mobile computing from a user-centred and ethnographically-informed perspective. He has a background in psychology (BA), cognitive science (MSc), and human-computer interaction (PhD). Mark is Principal Investigator on the 3DaRoC project, exploring new media formats for alternative and peer-to-peer financial services outside the banking sector. Dr John Carter McKnight is a postdoctoral researcher on the 3DaRoC project. His research focuses on the role of transmedia platform and user experience design in creating affective communities around financial, national-cultural, and gender identities. He has a background in political science (BA), law (J.D.), international affairs (M.I.A), and media and communications (PhD). From 1988 through 2000 he was a corporate finance attorney specializing in initial public offerings of high-technology firms. Dr Jennifer Ferreira is a post-doctoral researcher on the 3DaRoC project, exploring the ways digital connectivity shapes the relationships of users of local currency and peer-to-peer lending through design research. She has degrees in Econometrics and Economics (BCA), Computer Science (BSc), and software engineering (PhD). By taking a user-centric perspective on what is usually considered the asocial flow of economic value, she studies the intermediary role of digital technologies in financial transactions as opportunities for rich social interactions. Dr Adam Fish is a Lecturer at Lancaster University, a social anthropologist of digital culture, business, and politics. He is Co-Investigator on the 3DaRoC project. He investigates the interface of economic and political power, cultural discourses and practices, and networked communication technologies.
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9. 3DaRoC Publications and Presentations The work that underpins the 3DaRoC project has been documented in the academic literature or presented at conferences and symposia. For further information about the work of the project and this academic research, these are listed below for readers to follow up. Peer Reviewed Papers Ferreira, J., Perry, M. and Subramanian, S. (2015) Spending Time with
Money: from shared values to social connectivity. In Proc. ACM CSCW’15, March 14-18, Vancouver, British Columbia, Canada.
McKnight, J.C., Ferreira, J., Fish, A. and Perry, M. (2015) Digital financial innovation: design rhetorics, spatiality, and the challenge of creating community. Workshop on Collaboration and Social Computing in Emerging Financial Services, ACM CHI 2015, Vancouver, BC, Canada.
Ferreira, J. and Perry, M. (2015) Building an Alternative Social Currency: Dematerialising and rematerialising digital money across media. Proc. HCI Korea’15, Dec 10-12, Seoul, South Korea. Lee (Ed.), Hanbit Media, Inc., 122-131.
Kaye, J., Vertesi, J., Ferreira, J., Brown, B. and Perry, M. (2014) #CHImoney: financial interactions, digital cash, capital exchange and mobile money. In Extended Abstracts on Human Factors in Computing Systems. ACM, New York, NY, USA, 111-114.
Pantidi N. and Ferreira J. (2014) What can HCI do for local currencies? Workshop paper presented at #CHImoney: financial interactions, digital cash, capital exchange and mobile money, as part of CHI ’14.
McKnight, J.C. and Fish, A. A Sensible Lamb Portfolio: Constructing Peers in Peer to Peer Lending. In review at Ephemera: Theory & Politics in Organization.
McKnight, J.C. and Fish, A. Becoming Sensible: Peer-to-Peer Lending and the Limits of Financialization. In review at Science, Technology and Human Values.
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Presentations Perry, M. Invited Keynote: ‘Ordinary interaction around local, digital and
mixed media currency exchange: managing fungible, social and material transactions’. The Future of Money Symposium. MobileLife, Stockholm University.
McKnight, J.C. Invited talk: Peer-to-Peer Finance: Design Rhetorics and the Limits of Financialization,” Department of Computer Science, University of Bristol, Bristol, UK.
McKnight, J.C. P2P Invited Talk: Finance: Technological Play to ‘Sensible’ Saving,” Department of Sociology Seminar, Lancaster University, Lancaster, UK.
McKnight, J.C. Peer reviewed conference presentation: ’Sensible’ Borrowers: Class Narratives and the Manipulation of Affect in the Marketing of Alternative Finance. Presented by Adam Fish, Lancaster University. Association of Social Anthropologists of the UK and Commonwealth Annual Conference, Exeter, UK (upcoming)
McKnight, J.C. Peer reviewed conference presentation: ’Sensible’ Borrowers: Class Narratives and the Manipulation of Affect in the Marketing of Alternative Finance. Social Media & Affect Research Seminar. University of East London, London, UK. (upcoming)
McKnight, J.C. and Fish, A. Peer reviewed conference presentation: Financialization: Process Innovation in the New Financial Workplace. The Dynamics of Virtual Work: The Transformation of Labour in a Digital Global Economy. University of Hertfordshire, UK.
McKnight, J.C. Peer reviewed conference presentation: A Sensible Lamb Portfolio: Constructing Peers in Peer to Peer Lending Affective Capitalism Symposium. University of Turku, Finland.
McKnight, J.C. Peer reviewed conference presentation: Reconfiguring Peer-to-Peer Finance: From Technological Play to ‘Sensible’ Saving. Fourth Annual Cultural Political Economy Workshop, Lancaster University, Lancaster, UK.
McKnight, J.C. and Ferreira, J. Public lecture: A Sensible Lamb Portfolio: Talking About Alternatives to the Banks. Café Scientifique, The Robert Gillow, Lancaster, UK.
McKnight, J.C. “’Sensible’ Borrowers: Class Narratives and the Manipulation of Affect in the Marketing of Alternative Finance.” Social Media & Affect Research Seminar. University of East London, London, UK.
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10. Suggested Further Reading If readers are interested in the topics covered in this report, you might be interested in the extensive materials listed below: Ahmed, S. (2004). “Affective economies. Social text, 22(2)”, 117-139. Andrejevic, M. (2011). “The work that affective economics does”. Cultural
Studies, 25(4-5), 604-620. Antonopulous, A. (2014) Bitcoin security model: Trust by computation.
O’Reilly Radar, 14 February 2014. Online: http://radar.oreilly.com/2014/02/bitcoin-security-model-trust-by-computation.html
Benkler, Y. (2006). The wealth of networks: How social production transforms markets and freedom. Yale University Press.
Çalışkan, K., & Callon, M. (2009). Economization, part 1: shifting attention from the economy towards processes of economization. Economy and Society, 38 (3), 369-398.
Clark, G., Thrift, N., & Tickell, A. (2004). “Performing finance: the industry, the media and its image”, Review of International Political Economy, 11(2), 289-310.
Cortese, A. (2014) Loans that avoid banks? Maybe not. The New York Times, May 3, 2014.
Crotty, J. (2009) Structural causes of the global financial crisis: a critical assessment of the ‘new financial architecture’. Cambridge Journal of Economics, 33(4), 563-580.
Davies, M. (2012). “The Aesthetics of the financial crisis: Work, culture, and politics”, Alternatives: Global, Local, Political, 37(4), 317-330.
Deville, J. (2013) Leaky data: How Wonga makes lending decisions. Charisma: Consumer Market Studies. Online: http://www.charisma-network.net/finance/leaky-data-how-wonga-makes-lending-decisions
Deville, J., & van der Velden, L. (2015) Seeing the invisible algorithm: The practical politics of tracking the credit trackers. In Louise Amoore and Volha Piotukh (eds.), Algorithmic Life: Calculation in the Age of Big Data, London: Routledge. (in press)
Epstein, G. (2002) Financialization, rentier interests, and central bank policy. Manuscript, Department of Economics and Political Economy, Amherst, MA.
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Erturk, I., et al. (2007) The democratization of finance? Promises, outcomes and conditions. Review of International Political Economy 14:4, 553-575.
Financial Conduct Authority (2014) FCA proposes price cap for payday lenders. Online: http://www.fca.org.uk/news/fca-proposes-price-cap-for-payday-lenders
Fisher, M. (2004). Corporate Ethnography in the New Economy. Anthropology News, 45(4), 15-15.
Gola, C. (2009). The UK banking system and its regulatory and supervisory framework. Palgrave Macmillan Ltd.
Graeber, D. (2011). Debt: The first 5,000 years. London: Melville House. Granovetter, M. (1985). Economic action and social structure: the problem of
embeddedness. American journal of sociology, 481-510. Hulme, M.K. and Wright, C. (2006) Internet based social lending: Past,
present, future. Manuscript, Social Futures Observatory. Martin, R. (2002). Financialization of daily life. Temple University Press. Martin, R., Rafferty, M., and Bryan, D. (2008) Financialization, risk and
labour. Competition & Change 12(2), 120-132. Montgomerie, J. (2009). The pursuit of (past) happiness? Middle-class
indebtedness and American financialisation. New Political Economy, 14(1), 1-24.
Moran, M. (1984). The politics of banking. New York: Macmillan. Nesta. (2014). Understanding alternative finance: The UK alternative finance
industry report 2014. Online: http://www.nesta.org.uk/sites/default/files/understanding-alternative-finance-2014.pdf
O’Reilly, T. (2005). “What is Web 2.0: Design patterns and business models for the next generation of software”, 30 September 2005. [http://oreilly.com/web2/archive/what-is-web-20.html]
Peer2Peer Finance Association (2013) Online: http://www.p2pfinanceassociation.org.uk/
Polillo, S. (2013) Conservatives versus wildcats: A sociology of financial conflict. Stanford University Press.
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Online A digital version of this report can be downloaded from: !http://tinyurl.com/Digital-Info-Exchange-Toolkit