BitDepth#1424
Mark Lyndersay
EMMANUEL DANIEL'S first book occupies an interesting space. The Great Transition, subtitled The Personalisation of Finance is Here, doesn't shirk from considering big ideas in a turbulent and confusing business sector.
Reading the work reminded me of the way that formerly firm ground became quicksand while reading Marshall McLuhan's The Medium is the Message and Nicholas Negroponte's Being Digital.
Those books introduced ideas that were considered to be revolutionary and potentially outrageous when they were published.
Daniel opens his work with a consideration of the ice trade of a century past.
I'm just old enough to remember the ice sellers who worked the streets of Port of Spain with their melting product couched in burlap sacks nestled into rickety handmade wooden carts, going from door to door selling ice to consumers with an icebox to store it.
In Daniel's view, modern finance parallels the business model of the ice merchants who built a business with liability factors for a perishable product, only to have it all swept away by the refrigerator, which moved an industry from shipping to the kitchen.
In Daniel's futuring of the finance industry, the world is already in the midst of a similar shift to the personal, as finance, with its associated accumulation of data and convoluted speculation on capital, assets and futures, moves from industrial oversight to individual discretion.
There's a lot here for the financially adept to consider.
I've only a nodding acquaintance with some of the high-level concepts here. The more esoteric concepts of modern finance, which turned debts into securities and abstracted assets into money market instruments far removed from any tangible object or service system, remain an area of darkness for me.
The evolution of fintech in China, as demonstrated by the rapid growth of China UnionPay, was fuelled by distributed servers and an open programming language, enabling a nimbler execution of traditional payment processing.
Despite those advantages, UnionPay faced robust challenges from AliPay and WeChat Pay, which skipped the entire credit card system for digital wallets, sparking rapid growth and technology-driven competition.
"By keeping Visa and MasterCard out of China, the Chinese platforms Alipay and WeChat Pay introduced a whole new universe of connected supply chains that transformed lifestyles forever, but the West did not catch on to this trend," Daniel writes.
Collectively, these systems now dwarf the transaction volume of Visa and Mastercard by orders of magnitude.
But even these centrally controlled transaction systems will be replaced, if Daniel's predictions hold true, with new, peer-to-peer, networked business models for finance which will be fuelled by cryptography, blockchain and other technologies yet to be invented.
It isn't until the last few dozen pages of the book that Daniel drops his ace, an application of David Ronfeldt's theory of how social systems adapt to the evolution of finance.
