Open innovation in bank service (and some thoughts on design)

While designers are discussing about how they would design services, services are changing by themselves. This is the case of bank and financial services, which of course are not living a happy period. In 2005 a new system of social lending was funded in UK and is now developing in other countries (USA; Italy). The initiative is called Zopa. Social lending is basically a system in which some people lend money directly to other people without the mediation of a bank. The role of the service provider (Zopa) is to create mechanisms of trust and warranties that are very similar to those a bank can offer. In other worlds, it is very close to a bank, but without the bank. Zopa creates a sort of safe exchange place for lenders and borrowers. Lenders will be able to choose the interest rate they want, but Zopa offers statistical data about an average range within which the money will be refunded earlier. Furthermore the money from the lender does not go to only one person, so if there is a case of insolvency (and apparently there are not many), the lender will be protected anyway.

As Paul Artiuch noticed some time ago on the Wikinomics blog, social lending is not new, as people got along without banks for thousands of years. However for all those years social lending was very much a local phenomenon, whereas banks have grown in size and became huge multinational giants. The news is that this new service is extending social lending to a size that makes it competitive against those giants. It is a little bit of what Linux is doing against Microsoft.

Zopa replaces the heavy bureaucratic structure of banks with the logic of open systems of innovation.

Is that interesting for a designer? Yes it is. The designer (and especially a service designer, if we can define one) is now in front of a dilemma: who should a designer work for? For the bank or for the open system? And if the designer decides to go for the open system how can s/he design services in this logic?

Furthermore working in this logic needs a deeper understanding of the mechanisms and the possible development of open innovation in our social and economic systems. For this reason I found the discussion in the Kashklash blog very interesting. A repositioning of designers needs not just a new technical and methodological infrastructure, it also needs Designers to have a clear political view.

I made some considerations about designing in open some time ago, but I think there is a lot to think about in this area.

By the way, while writing this post I also discovered another interesting source of info about Peer to peer lending here. It looks like the US financial system does not like those initiatives.