Trust is becoming a rare commodity in the finance world. This paper examines the design tactics financial institutions are using to regain trust after the 2008 Global Financial Crisis.
Trust Architecture was a paper written for ThinkSpace Unconference on Money.
We live in a culture of Crisis, where the ongoing economic crisis has changed the relationship with money, financial institutions and each other – altering people’s long held views on trust and reputation. We are moving into a new era of non-hierarchical networked trust, stemming from our monetary exchanges, which will become solely digital; while our online reputation will determine other’s confidence in us.
Money is a representation of the value of goods and services, and thus, a charter of trust. The holder of a 5€ banknote knows they can exchange it for goods to the value of 5€ and the seller of the goods will accept the tender. Runaway inflation causes panic because people lose trust in the currency– similarly, when financial institutions fail because of massive speculation, their customers’ trust evaporates. Trust, once lost, takes a generation (or re-branding) to rebuild.
Bank architecture has changed from building solid and impenetrable structures, to creating transparent and flexible workspaces, mimicking a shift in branding. Banks now incorporate cafes or open spaces into their interiors, buying and showing art collections for their vacuous foyers, and emphasise the personal connection they have with their customers through homely interiors. Advertisements paint images of security, modesty and stability – no brash statements of ostentatious wealth or power. All of these designed signals suggest banks’ desire to appear more open, flexible and transparent.
The newest banks have no visible physical infrastructure. They are merely digital connectors between people who want to lend and those who want to borrow. These are peer-to-peer banks, which connect clients online through distributed systems to spread risk. Lenders can choose safer investments at lower rates, or more risky ventures with greater rewards.
The infrastructure needed to power a peer to peer bank can be reduced to code and a secure server – an underground bunker out of sight. Just like money became digital, banks are disappearing into black boxes. Instead of a teller, an FAQ greets the client. Still – these ‘banks as connectors’ must determine if their clients are trustworthy. Banks such as Zopa or Auxmoney who connect peer lenders still determine trust through credit rating, but this is also starting to merge with other online systems.
Repstamp proposes to determine reputation by combining ratings from different sites, including ebay, airbnb and linked-in. The Whuffie Bank was an online service which measured client’s reputation according to social media standing. Soon, as online transactions dominate, these digital forms of trust and reputation will connect with online lending services, building a non-hierarchical and networked infrastructure of exchange, disconnected from the offline world.
Trust is becoming a rare commodity in the finance world. There are ventures developing novel ways of measuring our faith in others, in parallel with a growing dominance of digital transactions. Will the transferal of trust to a measurable digital form change how money informs our culture? Or perhaps this new online space is a heterotopia of money culture – where all actions are accountable and trackable, but the lawlessness of the digital world permits players to bend the rules.