Greengaged

photo by: Chiara Terraneo

Greengaged curator John Grant was joined by three speakers after lunch on Tuesday: Shaun Nagassic, Dave Birch and Giles Andrews, who each, in the context of the day on co-opportunity and re-inventing the banking system for the common good, gave presentations of their work. Here we provide a summary of each of the talks.

Shaun Nagassic: The Finance Lab

Shaun began his talk asking the question; “What does a financial system that serves people and the planet look like?” He described how his organisation, The Finance Lab works by bringing diverse groups of individuals together to create practical experiments that show system level change. They developed the concept in two phases:

• Phase 1: Scenario Planning Workshops: In July, they held a series of workshops bringing 200 people together. These included developing new business models, defining leadership values and education, looking at locally directed investments, and creating models for showing value and risk management.
• Phase 2: An Open Innovation Lab: Bringing together a sustained gathering of diverse individuals, both private and public sector thinkers, who can collaborate to produce sustained actions. Now he is raising funds for them to develop 6 different initiatives that can be tested in public. One is a lab on sustainable food change, another is on child hunger in India.

Dave Birch

Birch said that he is an expert on the history of technology of money. He excused himself by saying that most people think payment and money is boring, but he certainly doesn’t. He explained that he became a guru by going on about the same idea forever. His big idea: that mobile phones would be important in the long run. He works with electronic payments for Visa and Am Ex.

He told the story of Vodaphone’s expansion into mobile phone banking in Kenya, because people there don’t have a lot of money, have difficulty with cash, traveling to banks is expensive and time consuming, and often cash gets stolen. There are 300 ATM machines in Kenya and thousands of Vodaphone agents who sell air time and top ups. Many people have SIM cards, few have handsets (these are shared).

No matter where you are, a small business is only viable if you can collect and disburse cash. Vodaphone started banking by SIM card penetration. The innovation was building a computer into the SIM card so that now text messaging can be used to carry out banking. People can text money from city to country to primitive villages with little infrastructure. The marginal cost is zero and Vodaphone makes money by holding it as a float in their “bank.” After a year there are now 11,000 people a day signing up to the system. Most are illiterate, but this is not a problem; they understand the value of money. 7.1M are using it already.

This system is carried out in India and Latin America too, there the banking is associated with retail stores. In Kenya and Philippines it is associated with phone companies. Robbery could be a problem. However, in Japan they have a special number, with a code to call to report the theft and have the phone instantly shut down. By comparison, if your credit card is stolen, it could be an entire day before you realise it is gone.

Birch had a wealth of fascinating anecdotes about banking, mobiles and African countries. "By 2012 everyone on the planet will have a mobile phone", he explained. He noted that in the Democratic Republic of Congo people don’t want Congolese dollars, instead they save mobile phone vouchers which are in US dollars. He said that 2/3 of all euro notes in circulation are 500 euro notes. Obviously these are from drug dealers and tax evasion. In Tanzania and Afghanistan the army’s wages are paid through mobiles. The Taliban and the government have a pact not to block mobile lines because both need them.

Giles Andrews: CEO, Zopa Financial Services

Zopa offers web-based loans and financial services. They recognised that it is hard for individuals to borrow money. They looked at the e-bay model: in 2004 it was the biggest retailer in the world because it was a people to people transaction.

• People are turning away from institutions because of their inability to respond to individual needs. 
• People want to do their own thing: plan their own travel, not be limited to single issue political parties.
• Now people want to play a part in the creation of loans, they don’t fit into mass market strategies.
• Trust has to be created.
• The credit crunch shattered the trust that people had in the stability of the bank.
• Now banks aren’t trusted to look after consumer’s best interests.

His company benefited by this change. Suddenly it had a trustworthy image. They make every effort to be accessible and user-friendly. The website is written in a conversational style, with clear language and transparency. People can shape some of the conditions of their loan.

See more photographs of John Grant's Co-opportunity day on flickr.