Last week I gave my talk on Agile Banking at Reboot 11. This week I have taken my talk and turned it into a series of blog articles of which this is the final one. I have links at the bottom of the article to the previous articles.
How do we build this?
Open web standards are the way to do this. A lot of great work has been done in the past couple of years.
OpenID may provide us a better alternative to account numbers. OpenId is a universal id. It replaces username/password on many different sites.
We may need guidelines for high security open id’s. A voluntary certification of trusted opened providers.
Oauth is a new web security standard. It lets all your applications talk together. You could use it to provide your accounting system access to your accounts. It could also be used for one off or subscription payments.
We also need new simple financial standards.
WideLedger is a simple financial exchange format. It contains only very basic transaction information embedded in a normal web page. It can be implemented in less than an hour for any financial web application.
Together with OAuth it makes it very easy for you to bring your financial info together. Startups will create all sorts of cool and useful financial mashups.
Finance isn’t just about reporting transaction but also performing them so we also need a very simple standard for performing a transfer from one account to another.
After that a slightly more complex standard for performing an exchange between two different parties on two different financial service providers. A simple application would to buy shares in a mutual fund with money in my electronic currency account.
We need Open Source Software to run this new generation of financial software.
- Ledgers are the foundation of any financial application.
- Exchange Software to manage transactions between financial services
There are lots of opportunities for hosting providers to run the above software in a secure manner.
We also need online auditing services to keep an eye on the new financial services companies but also on the hosting providers.
But what about the regulators?
They mean well but need pushing. Change has to come from the grassroots.
We need brave financial rebels, who believe it is better to ask forgiveness than permission.
This doesn’t mean being stupid (always remember what they did to Doug). Limit your risk as a rebel – think small, think community:
- small community currencies
- community lending
- projects with a purpose
If we are forced to I say be the Christiania of finance. Force regulators to think small and learn from you.
Once you have a little bit of momentum engage them publicly. Show them it works and in the end it makes their job easier. Then scale.
Most of the above ideas are refreshed versions based on work I did from 2000-2004 in the NeuClear project. However I have noticed some interesting new mainstream proposals.
Limited purpose banking a proposal by Kotlikoff and Goodman
It seems very similar but without worrying too much about barriers to entry and know your customer.
Call to action
Programmers, entrepreneurs, activists, lawyers and accountants we need you. I want to hear from anyone with an interest in this. Please write me at [email protected] if you have any thoughts or ideas or want to get involved.
Earlier this week I wrote about Risky Business the core problem in todays financial services industry, Benches, Coffee and Bubbles about the origins of financial innovation, Douglas Jackson of e-gold who has been one of the most innovative people in the financial services space and my proposal to create a new banking system.