The founder of FTX, the world's third-largest cryptocurrency exchange, posted 'What' on his Twitter account on the 14th, a weekend after filing for bankruptcy on the 11th. Over the next few hours until Monday, he posted one alphabet at a time: 'H', 'A', 'P', 'P', 'E', 'N', 'E', 'D'. Some investors responded with jokes, recognizing his playful attitude even after the bankruptcy announcement, seemingly an attempt to explain 'what happened'. However, it's crucial to note the stark contrast between this and the anxiety and outcry faced by the 1 million creditors and the staggering debt of 66 trillion won.
How should we perceive this seemingly contradictory and frivolous attitude towards 'money,' especially when countless individuals have essentially donated their precious, real-world money to the virtual realm in the guise of investment? This incident compels us to ask: 'What is the nature of our relationship with the money we've lost?'
According to a 2017 report by information technology consulting firm Cognizant, the most significant source of constant stress for Americans in the digital economy was 'financial insecurity,' surpassing even health, job security, and the fear of terrorism. It highlights that this anxiety primarily stemmed from a loss of control over 'slow money,' the money used for long-term investments like pensions, insurance, and home purchases, which are difficult to quickly assess for value.
Having endured the two-year pandemic that resulted in economic devastation, we can anticipate that current levels of financial insecurity are either similar to or even higher than those experienced by Americans at that time. This is evident in recent phenomena such as quiet quitting, where individuals seek to protect themselves by performing only the minimum required tasks at work; the rise of 'N-jobbers' and personal branding; the popularity of the FIRE movement (Financial Independence, Retire Early); and the excessive investments in cryptocurrency and stocks, as well as the 'Yeongkkeol' (leveraged loans) phenomenon of purchasing homes with loans.
Above all, the institution entrusted with the responsibility and role of actively addressing this chronic anxiety is none other than 'banks'. Banks are uniquely positioned to help people cultivate healthier relationships with their money due to their unparalleled access to customer financial data and their associated expertise. Moreover, they are ideally placed to benefit from this process.
However, domestic financial holding companies have expressed dissatisfaction with their own relegated position as mere shadows in the face of big tech and fintech companies' aggressive investments and successful forays into financial platforms. While discussions surrounding recent financial deregulation suggest a potential surge in active participation by traditional financial institutions in the platform wars, many believe that overcoming the technology, UI, and UX gaps compared to existing competitors will require considerable thought.
Therefore, the opportunity for traditional banks in their future digital financial platform investments lies in exploring ways to help customers experience their slow money in a more personalized manner. In other words, here's why banks should consider 'stability' as a guiding principle for their technology investments in addressing customer financial anxieties:
First, they can help cultivate budget management skills. Beginning with VISA, electronic payments have been primarily focused on the 'mobility of money,' culminating in today's super apps like Kakao Pay. However, this ease and speed of payment have dulled our sense of consumption necessary for budget management. We learned the value and significance of financial management through everyday experiences, observing how quickly physical cash disappeared over a certain period. Philosophers have termed this 'embodied knowledge'. Banks have an opportunity to offer a sensory experience of this budget management and associated consumption, linked to the physical symbol of financial stability, through customer education that integrates online and offline experiences.
Second, they can provide predictive scenarios. People experience significant stress in the face of uncertainty. They regain stability more quickly when they understand the conditions under which a particular situation might occur and are able to anticipate how it will unfold. While banks may not be able to predict the future, they can provide guidance and scenarios that help people assess their financial status and plan accordingly.
Third, they can showcase their traditional role as a permanent repository. Permanence implies continuity of temporal stability. As an institution with a past, present, and future, banks have weathered countless trials and tribulations, demonstrating their resilience in the face of any fluctuation or crisis. In the war for digital financial platforms, banks might need to ask themselves how they can communicate this inherent resilience and tenacity to customers.
“The pain of losing more parts of myself is greater.” During the pandemic, one survey participant I met used the metaphor of flesh and bone to describe the increased uncertainty and financial anxieties of daily life, characterized by large-scale job losses and immense government pressure on small businesses. Two years later, has their anxiety decreased? Perhaps now is the optimal time for traditional banks to solidify their differentiated strategies in digital financial platform investments, using 'stability' as a guiding principle and validating their own worth.
*This article is the original content published in theNovember 22, 2022, Electronic Times named column.
References
Comments0