TY - BOOK

T1 - Putting the ‘digital’ in Digital Intermediaries

T2 - the role of technical infrastructure in building business models

AU - McKnight, John Carter

AU - Ferreira, Jennifer

AU - Perry, Mark

AU - Fish, Adam Richard

PY - 2014

Y1 - 2014

N2 - The UK economy has a huge dependence on financial services, and this isincreasingly based on digital platforms. Innovating new economic models aroundconsumer financial services through the use of digital technologies is seen asincreasingly important in developed economies. There are a number of drivers forthis, ranging from national economic factors to the prosaic nature of enablingcheap, speedy and timely interactions for users. The potential for these new digitalsolutions is that they will allay an over-reliance on the traditional banking sector,which has proved itself to be unstable and risky, and we have seen a number ofnational policy moves to encourage growth in this sector. Partly as a result of the2008 banking crisis, there has been an explosion in peer-to-peer financial servicesfor non-professional consumers. These organisations act as intermediariesbetween users looking to trade goods or credit. However, building self-sustainingor profitable financial services within this novel space is itself fraught withcommercial, regulatory, technical and social problems.This report addresses the mutual shaping of business models and innovations indigital technical infrastructure – both client-facing and administrative back-end –in two retail financial products currently in use in the United Kingdom: peer-to-peerconsumer lending and a local digital/paper hybrid currency system. The twoproducts and their issuing firms, Zopa Limited (Zopa) and The Bristol PoundCommunity Interest Company (the Bristol Pound), respectively, are establishedleaders in their respective product areas: Zopa was established in 2005 and theBristol Pound in 2010. Each of these firms seeks to disrupt an established financialmarket through the application of digital technologies and processes: consumerlending for Zopa and retail payment for the Bristol Pound.Our research has involved teams from Lancaster University examining Zopa andBrunel University focusing on the Bristol Pound over approximately a one-yearperiod from October 2013 to October 2014. Extensive interviews, documentanalysis, observation of user interactions, and other methods have been employedto develop the process analyses of the firms presented here.This report is comprised of three primary sections: descriptions of the business andtechnological processes of each of Zopa and the Bristol Pound, and a finalanalytical section drawing preliminary conclusions from the research presented.

AB - The UK economy has a huge dependence on financial services, and this isincreasingly based on digital platforms. Innovating new economic models aroundconsumer financial services through the use of digital technologies is seen asincreasingly important in developed economies. There are a number of drivers forthis, ranging from national economic factors to the prosaic nature of enablingcheap, speedy and timely interactions for users. The potential for these new digitalsolutions is that they will allay an over-reliance on the traditional banking sector,which has proved itself to be unstable and risky, and we have seen a number ofnational policy moves to encourage growth in this sector. Partly as a result of the2008 banking crisis, there has been an explosion in peer-to-peer financial servicesfor non-professional consumers. These organisations act as intermediariesbetween users looking to trade goods or credit. However, building self-sustainingor profitable financial services within this novel space is itself fraught withcommercial, regulatory, technical and social problems.This report addresses the mutual shaping of business models and innovations indigital technical infrastructure – both client-facing and administrative back-end –in two retail financial products currently in use in the United Kingdom: peer-to-peerconsumer lending and a local digital/paper hybrid currency system. The twoproducts and their issuing firms, Zopa Limited (Zopa) and The Bristol PoundCommunity Interest Company (the Bristol Pound), respectively, are establishedleaders in their respective product areas: Zopa was established in 2005 and theBristol Pound in 2010. Each of these firms seeks to disrupt an established financialmarket through the application of digital technologies and processes: consumerlending for Zopa and retail payment for the Bristol Pound.Our research has involved teams from Lancaster University examining Zopa andBrunel University focusing on the Bristol Pound over approximately a one-yearperiod from October 2013 to October 2014. Extensive interviews, documentanalysis, observation of user interactions, and other methods have been employedto develop the process analyses of the firms presented here.This report is comprised of three primary sections: descriptions of the business andtechnological processes of each of Zopa and the Bristol Pound, and a finalanalytical section drawing preliminary conclusions from the research presented.

M3 - Commissioned report

BT - Putting the ‘digital’ in Digital Intermediaries

PB - 3rd Party Dematerialisation and Rematerialisation of Capital

ER -