As preparation of 2010, i very strongly recommend to get familiar with Sean Park’s The Sixth Paradigm post of 28 Dec 2009.

I am a big fan of Sean and his site the Park Paradigm. He was the guy who made the famous AmazonBay2015 video.

That was 2006.

Since a couple of days the video of his Oct 2009 presentation at Amsterdam eComm Europe is available on his post above and also the Prezi presentation is here.

The video of his presentation is 20 min. It’s worth your time.

Two extracts of this presentation should get your attention, and incentivize you to read on:

– What is the difference between a bank and a telecom company really ?

– The difference between bank messaging and telcos is disappearing.

 

I believe this presentation is VERY VERY relevant to financial services and concepts such a marketplaces for financial services.

This presentation gives you an absolute macro-evolution view on why this is a bound to be happen, and why the inherent structures of our current – usually vertical integrated – behemoth companies will struggle very hard to get their arms around this if they even ever succeed it spotting this as a HUGE opportunity.

 

The essence of the story is that those

vertically integrated companies

will be replaced/challenged

by horizontally connected entities

offering themselves

to the marketplace

via APIs

 

The innovation will happen

at the edges of the marketplace.

The marketplace is not even

innovative anymore.

It’s an essential piece of

the plumbing.

A lot of Sean’s thinking is based on the work of Carlota Perez and her book “Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages”

Professor Carlota Perez is a Venezuelan scholar and expert on technology and socio-economic development most famous for her concept of Techno-Economic Paradigm Shifts and her theory of great surges, a further development of the Kondratieff waves.

 

Courtesy The Park Paradigm & Carlota Perez book.

 

Sean Park’s claim is that we are  now getting into the 6th paradigm, and this is also a switching point between 2 phases.

 

 

Sean Park believes the drivers will be 3-fold:

1) Cloud computing, with EVERYTHING as a Service

2) Exchange Ubiquity. The marketplace as plumbing, i would call this

3) Digitization

The last one “Digitization” seems “obvious”, unless you push this to the limits, as Sean Park does:

 

 

He takes the example of ISBN numbers as one of the success factors of Amazon’s book shop. Sure, there is big logistical tail to the book shop, the the core of the Amazon model is digitized, i.e the ISBN is just an identifier, linked to plenty of content and metadata, that can be accessed by an eco-system through APIs.

Where it even becomes more interesting, is where Sean mixes this up with theories of complex adaptive systems. It’s basically saying that

 

those horizontally integrated value chains

are chains of nearly decomposable services

And please read this in the context of nearly decomposable

financial services

 

And (traditional) vertically integrated companies (offering financial services) will not be able to compete successfully in rate of adaptation and fitness with these horizontally integrated “engines” or “eco-systems”.

 

 

Sean asks the question:

Where is the AppStore for Financial Services ?

here is the digital platform + API’s for the financial industry ?

Where are the decomposable financial services that can thrive on such marketplace ?

 

 

Sean has some other great disruptive statements. Like this one:

 

 

Its about the shift

 

from

   To

 

It looks like Sean’s company is looking to invest in companies that understand how to build and offer these decomposable services.

 

But who should invest in the marketplace,

the plumbing,

the “dumb” but highly secure pipes

for the financial industry ?

 

We could let every Bank behemoth have it’s chance at it. That may be great for lock in. But in the long term, we will need something that is highly interoperable.

 

With interoperability

built-in

into the DNA

of this Digital Platform.

 

That is run as a service for the community. And to be the “invisible engine” for financial services cloud computing.

 

It’s only a very personal opinion, but i believe SWIFT is quite uniquely positioned to play this role.

 

 

We are already in full prep for our 2010 SWIFT Innovation activities. It should be obvious from the above that we have Sean Park on our list of speakers to be contacted for our Innotribe event series, and who know at Sibos 2010 in Amsterdam ?