I have noticed a few things lately.
Corporations have an obsession with information. That's essential you might say. I'd agree that information is essential, but exactly what?
It is important to make the right information the target of your obsession.
This is where the problem begins - focusing on the wrong information and too much information. I once did a Henry Rollins Album where he talked about information overload. I'm sure there is some spoken word on it somewhere. That was 1997. Since then we have
collectively developed massive communications channels and data stores. I'm not sure it has done anyone any real good aside from the robbers who steal it and then used to defraud both the suppliers and these gatherers of that information.
Consumers have enough sources of information, they're close to overload. They have also had enough information stolen, at least those who have been exploited by that information being stolen would tell you they have had well and truly enough.
At the heart it is about human nature, the desire to know and share. People want to share their information. The problem is that the financial institutions have linked their money to that same, often stolen information, and financial service providers and
the marketing industry have been collecting, transmitting and storing so much of that often stolen information (both meanings are appropriate).
Someone is out of step here.
Customers dont want their money stolen.
Customers want to communicate and share information, perhaps not the precise information that the FI's collect, but then they probably don't know the extent of it.
Banks want customers' deposits and for those customers to buy services from them or buy other goods and services through them. They think they need all sorts of information, in fact all the customer's information in order to maximise their opportunity.
Nope - sorry wrong.
Banks didn't do too well with all that information did they? It didn't help them predict the financial collapse and all the defaults associated with that. Either that or they didn't listen to the data. Either way they have blown it - big time.
Information sharing is here to stay - in one form or another. A bright guy at IBM just worked out a way to study all that information in encrypted form supposedly without divulging the underlying identity attached to it. It remains to be seen, but if it
is so, and I generally trust IBM, then surely there is another bright spark out there going one step further.
This is where I say take a step back. Sometimes you have to, in order to go forwards.
Get with the plan - listen to your customers - they are not going to alter their habits in this evolution of the information revolution. The financial industry is going to have to evolve and alter the way they do things.
What about instead of encrypting/decrypting/encrypting/trickripting all that information which we have transported around and stored at great expense - we just don't encrypt it in the first place?
Imagine that. Before you freak out and think 'boy we'll all get robbed', which probably isn't true, there are only so many robbers and so many hours in a day, and they have more than enough to do already, and it only takes a little adjustment to the systems
to make it all work and put the robbers pretty well out of work.
The present system just isn't working for advertisers, corporations or financial institutions. All that information means nada, just look at your sales figures, loan books balance sheets, nada. It is working out quite well for the robbers.
If everyone knows that someone bought 2 pairs of levi's at Macy's* in Pentagon Mall for $39.95 each, what does that mean in the scheme of things? For instance we transmit the data in plain text. We let people yahoo or google it. We let people have twitter
feeds on exactly every pair of levi's being sold every second everywhere in the world.
We let governments have their ear on the pulse of the economy in real time. We let students, marketers, FI's(who want to know how levi are really doing) and cotton growers have complete and unfettered access to the information.
Now you're talking or more importantly - listening.
The one little thing we have to do first is leave the identity of the customer out of the data. From the very beginning. At the counter at Macy's, if they really cared about you, they wouldn't be transmitting all that info about you and risking TJX'ing you.
There is no need to do it. Macy's can still get paid. They can even keep tabs on what you are spending with them and they never need to know your name. They can get our permission to send you stuff about levi's or whatever else you tick on the box - all
without transmitting or knowing your email address or identity. In fact you're much more likely to give Macy's permission to send you stuff and may even welcome it and read it, because they don't know your name.
Why? Because Macy's cares about you, service you and protect you. Macy's do not expose you to flawed procedures and risk your data and identity being stolen, and do not pay spammers to bombard them with email (which they don't trust and seldom open anyway).
You do share information about their purchases, not about them. The guys who sell Big Star jeans may also get to send the customer information about their jeans, it is the customer's choice. They are more likely to exercise the choice if it doesn't mean
they have their identity stolen and their habits and tastes displayed anywhere except as they choose on their social networking site. The one they control.
Meanwhile everyone is up to date on consumer sentiment, the popularity of denim and the local fashions.
No surprises. No sleepy governments waking up 6 months later that everyone stopped buying things. No hackers stealing personal data if it's worthless when it comes to getting the person's money and it doesn't mean they can assume or clone their identity
- in the new paradigm.
The information is valueless to criminals.
It is incredibly valuable to the people in the cotton supply chain.
All we need to do is 'decouple' that valuable identity information from the transaction. Don't include it at all, don't use it to complete the transaction.
Marketers will find they get more information that is useful or truthful, the customers will be more open to trusted messages and ereyone will be better off.
Information. There's a lot to it, but too much is just overload. That's why I'll come back tomorrow and explain some more about this new world of information, this new paradigm. No passwords and PINS or cards is just the front end of the wedge.
In my new paradigm the unemployed computer security guys from the merchants will probably find ready employment helping the government fix healthcare and defend government systems against cyber attack. There will probably be a few bank ones joining them,
because just like the sun rising tomorrow the New Paradigm is coming. Those credit card companies are feeling the wedge right now and no doubt just a little surprised eh?
*Macy's is used purely as an example - they probably know as little about the new paradigm as Eric Schmidt - but Macy's do care - they put on a great parade so I borrowed their good name for the example.