The Future of Finance in 2022 - Blais, Chow, Mills, Norman

FINANCIAL FUTURES 2022

The FUTURE of Consumer

Prepared by

Eric BlaisJen ChowJessica MillsRichard Norman

December 1, 2011

to Business Payment

iifinancial futures blais, chow, mills, norman

Financial Futures 2022 .............................................................................................................. 1

Horizon Scanning ....................................................................................................................... 6

Social trends ................................................................................................................... 7

Technological trends ....................................................................................................... 7

Economic trends ............................................................................................................. 8

Ecological trends ............................................................................................................. 8

Political trends ................................................................................................................. 8

Values trends .................................................................................................................. 8

Drivers and Critical Uncertainties ............................................................................................. 9

Scenarios .................................................................................................................................. 12

United States of Apple .................................................................................................. 15

Rise of the Brand .......................................................................................................... 18

Multiple Choice World ................................................................................................... 21

Powered by Google ...................................................................................................... 24

Strategic options ...................................................................................................................... 28

Bios ............................................................................................................................................ 42

Appendix ................................................................................................................................... 45

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0Table of Contents

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Financial Futures 2022


Statement of the Project This is a proactive foresight initiative outlining possible futures for the financial and banking landscape in Canada for the year 2022. The data and research is part of a graduate studies initiative undertaken in the fall of 2011.

Overview

On New Year’s Eve, as the clock struck midnight and the calendar rolled forward to 2000, the world waited with bated breath. What the technology industry had neglected to account for was this significant change in its design: there were decades with the prefix of 19, but somehow there was never a plan for the inevitable change to accommodate the new millennium. There were concerns of system meltdowns, security breaches and nuclear and economic disasters. Task forces were created, plans executed and anticipated hysteria reported by the media. In the end, everything was fine and the new millennium marched on.

It has been ten years since the Y2K panic. Since then, landlines gave way to cellphones and now to smartphones, growing approximately 50% from March 2010 to March 2011 (CBC News, 2011), with 32.8% market penetration in Canada (comScore, 2011). It is anticipated that within two years, 20% of all phones

will have near-frequency communication capabilities (Yadav, 2011), enabling smartphones to serve as both wallets and payment devices. Dial-up internet will be eclipsed by wireless networks, including emerging 4G technology.

New technologies and innovations have been coming to market almost hourly in this rapidly- changing environment. In order to keep pace, telecommunications companies are evolving their services and expanding into new markets, while banking entities are working to facilitate secure financial transactions across multiple platforms. Privacy laws in Canada have become some of the most protective in the world as our lives have increasingly migrated online. It is critical for these industries to consider looking beyond the rapid cycles of daily or quarterly change and to look to the horizon and beyond for signals and indicators of potential futures and the strategic implications for business.

It is in this constant state of flux that we have chosen to explore the potential futures for the financial industry in 2022. Specifically, within the domain of the financial sector, we have chosen to focus on the system that enables consumer-to-business payments.

1Financial Futures 2022

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Key Stakeholder ProfileThe stakeholder perspective we adopted was that of a senior leadership team with operational control of a national bank in Canada with international reach. This bank has a tradition of being risk- averse, late adopters and profit-driven. This bank offers B2B and C2B financial services to help facilitate B2B and C2B transactions.

Additional stakeholders and influencers considered throughout our process:

• financial institutions• government• customers/end-users• telephone companies/network infrastructure

providers• industry (retailers, services, manufacturers, etc.)• security boards• standards boards/regulatory groups• lobbyist groups• international funding agencies (IMF, WTO, G20,

etc.)

Research QuestionAfter refining the scope for this foresight study and before choosing a specific stakeholder lens to adopt, we decided to explore this research question:

“For our key stakeholder, what is the future of consumer-to-business payment in 2022?”




When considering futures within the financial sector, there are many components and relationships to examine. To define our project scope, concept and systems maps were created in order to identify and highlight tensions and challenges affecting multiple stakeholders, including our key stakeholder.

Following is an exploratory concept map we created to capture some key stakeholders and system components within the financial sector.

Financial System


The payment system below represents a balancing feedback loop with businesses paying employees, who in turn, pay for products and services. At the centre of this systems map is a myriad of transaction types, currencies and regulatory bodies facilitating consumer-to-business transactions. This part of the systems map will be ripe for innovation and regulatory change over the next 10 years as technological innovation and consumer demand continue to grow.


Note: we considered businesses to be entities that receive payments and employ workers (including government entities, NGOs and non-profits).

Our systems map offers a focused view of the various interactions that take place during a transaction. Incremental steps indicate opportunities for innovation and system streamlining. Once again, elements of this system will evolve with changes in regulations, consumer demand and technological development.


2Horizon Scanning

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One of the most comprehensive and critical components of foresighting and scenario-building is trend identification and analysis. Trends reflect a pattern of change in data impacting a substantial number of people over a period of time.

For this initiative, trends were identified and mapped using the STEEP+V framework, which encourages a comprehensive scan of trends across the domains of Social, Technological, Economic, Environmental and Values. To ensure a thorough horizon scan and a 360-degree view, we sought out emergent trends in each of the STEEP+V categories.

The sixteen trends identified for this initiative are clustered by STEEP+V theme below, and the complete trends package is included in the Appendix.

Social TrendsDancing Cheque to ChequeEach year, fewer Canadians save money for their future. Some citizens are only one pay cheque away from bankruptcy.

Friend Lend a Friend Emerging lending models that rely on individual

networks for financial support as opposed to relying on institution-based lending systems.

Social (Media) Unrest: All For One, One For All…Sort of The flavour of recent social uprisings parallels other emerging ideas: use of social media technology to organize, shifting individual values, opportunism and self-interest, all in the face of austerity measures.

Everyone Manage Your MoneyMobile tools encouraging more financial management to help manage budgets and facilitate transactions.

Technological TrendsCashless Transactions Any Time AnywhereProliferation of ways to pay on the go, around the clock.

Smartphone as Personalized BranchSmartphones are increasingly capable of branch services.

2Horizon Scanning


2Horizon Scanning

Mobi-Me-Money Financial transactions between payee and payer are migrating from paper transactions of cash and cheques to tech-based, online and mobile service networks, creating less dependency on banking services.

Get Your Head into the Clouds Cloud computing, an evolution in computing architecture, provides flexible and scalable infrastructure, software and hardware management, and allows for fluid customer-centric access to products and services to support the next generation of banking.

Uh Oh, I Think I’ve Virtually Caught Something There is an epidemic of cybercrime, which is coordinated and sophisticatedly driven by highly coordinated teams. It is costing billions from theft, infrastructure and security, and threatens client privacy, eroding consumer confidence.

Economic TrendsFinancial Climate ChaosThe national and financial landscape fluctuates quickly and erratically. It has become incredibly hard to forecast financial investments due to the existing chaotic financial climate.

Symbiosis of Financial Institution and Telco Credibility of financial institutions will complement telecommunications networks.

All In All There’s Another Bric In The…. The rise of Brazil, Russia, India and China (BRIC) as economic powers is undeniable, yet there is reason to wonder whether Russia’s economic and political stability equals that of the other three nations. It begs the question: Is there another nation set to take over its position as an emerging economic power?

Paying in PointsCurrency, as units of measure for exchange, is becoming increasingly fragmented. Loyalty points could become more reliable in the face of the unstable Euro and American dollar.

Environmental TrendsNo’ Mo’ Money Grow The resources to support capitalist benchmarks of year over year growth are becoming scarcer.

Political trendsI owe, I oweFrom home to government, the debt level in Canada is increasing exponentially year after year.

Values TrendsForever in DebtSocial values regarding debt are changing. Year after year, the level of senior Canadians retiring with debt is increasing.


3Drivers and Uncertainties

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The underlying forces behind trends are known as drivers. There can be multiple drivers for any given trend and a given driver can be relevant to multiple trends. It is through the identification of as many drivers as possible and their consolidation ,based on similar themes, that a robust set of drivers emerge.

Through our analysis of trends relating to the future of C2B payments, we arrived at 12 key drivers (see the Appendix for an expanded drivers to trends map.)

Once the drivers were identified, they were evaluated on their degree of uncertainty and impact on C2B payments, using a scale of low, medium and high (L, M, H):

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Driver Uncertainty Impact

Mergers & acquisitions H HFinancial services structure H HDesire for government control H HGlobalization M HInstant gratification L HInnovation (for efficiency) L HDemand for security (confidence) L HNetwork access L HAccess to credit L MCost of Living L LSocial pressure L LDesire for more knowledge L L


Drivers with high uncertainty and importance emerged. Once identified, we articulated what critical uncertainties to consider (factors with the highest impact and highest uncertainty). These critical uncertainties were then set at the axes for our future scenarios development tool: the 2x2 matrix.

In this case, the critical uncertainties were the role of high versus low governance, bisected with the centralized concentration versus fragmentation of financial services. The full list of drivers were then applied across the 2x2 matrix and assigned a value of influence in each quadrant.



4Scenarios

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“Thinking through [scenario] stories, and talking in depth about their implications, brings each person’s unspoken assumptions about the future to the surface. Scenarios are thus the most powerful vehicles I know for challenging our ‘mental models’ about the world and lifting the ‘blinders’ that limit our creativity and resourcefulness.”— Peter Schwartz

The Art of the Long View: Planning for the Future in an Uncertain World


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United States of AppleHigh GovernanceCentralized Financial Services

In 2015, Apple bailed out the U.S. government and eradicated their debt load. Their help had come just in the nick of time. Both the government and major banks were facing bankruptcy. Incidents of social upraising, violence and chaos were on the rise. It seemed like a civil war was inevitable. Apple’s help had come at a price. Today, 2021, Apple now owned majority shares in the U.S. government (now a publicly-traded company) and in all three remaining financial institutions.

The internet is alive and well but for reasons of national security, iHomeland instituted a policy that all financial transactions and government-related information reside on one single proprietary, secure network. The iMe, a paper-thin, malleable personal communication device, is introduced to access this secure network for all transactions and is offered at no-charge to all Americans. The device’s hardware and access to the network was subsidized by the Apple government and taxpayer money. The model is similar to the old cellphone model whereby the hardware was free, but the service and transactions came at a small cost. This pay-per- transaction and service model was designed to act much like the HST, as a payback system to repay Apple’s investment.

At first, Americans cried foul. They believed that this was the beginning of George Orwell’s 1984: the control and influence of an oligopoly. But the reverse happened, peace and prosperity returned to the land of milk and honey. The job market exploded especially at Apple. Eric, 43, had been unemployed for over two years and was forced to move in with

his aging parents, divorced sister and teenage niece. This job had saved his life. He was retrained by his new employer, paid a good salary and even given a mortgage for his new condo. Life was good! When the iMe was first introduced, American citizens often carried two personal communication mobile devices. In time, their trust in the government returned, they adopted the tools and features the device offered and, in an attempt to save money, the majority kept the iMe and got rid of their old smartphone. Paper currency still abounded but its popularity quickly declined.

Eric walked into the voice-command elevator and asked to be brought down to the parking garage. Oddly, it didn’t move so he decided to try a more manual approach. He grabbed his iME out of is pocket and was greeted with the device’s customary smiling face. He tapped the screen and the first page of the app’s icons appeared. He touched the magnifying glass (which reminded him of his old Android phone — may Google rest in peace). He typed an “E” and an “L” in the text box and the


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get to the bottom of this, he contacted a colleague at iNews to discuss. Instead of communicating over a device, she asked to meet Eric at their favourite café. Security is very tight in this new world, and monitoring the networks is now commonplace. Eric got into his iCar to drive away, but just like the elevator, it wouldn’t start so he opted to take the new iTrain instead. He tried to use his iMe to see when the next train would arrive but his device was once again not working properly or connecting to the network.

He asked those around him if they were experiencing similar problems with their devices. The man beside him unplugged the earbuds from his own device to let Eric know that the network was working for him. The woman beside him confirmed the same. As the train arrived, he tried to pay the fare with his iME but his device had gone blank! He made his way to the nearest iTM and placed his finger on the display for a quick fingerprint scan. The virtual assistant said: “We’re sorry, this fingerprint does not match any accounts on the iCloud.Please visit our nearest booth at the mall to speak to a customer service representative.” The train arrived. “I’m sorry,” said the iTrain attendant. “You can’t board without paying.” He had no money, no proof of identity, no communication tool, and he was stranded an hour away from the city, with no ability to pay through the only system that existed for him.

What was he going to do?

elevator icon appeared. He tapped it but for some reason it just wouldn’t launch. He slid his hand over the elevator’s side panel, which activated the manual display. He pressed “P” for parking, the doors closed and the elevator started to move.

He was quite bothered because his daily navigation of the world and routines were dependent on synchronicity between voice-command, facial recognition and his iMe device. This was not normal behavior and he was concerned about what was happening. Was this a result of his discoveries this morning? Was he being shut out of the system as a result? His heart raced; surely, he was wrong.

When he walked into the office that morning, he noticed fluctuations in the iCloud. He tried to stabilize them using his iPad but nothing seemed to work. He made his way to the server farm and found the defective box. He tried to connect wirelessly but no luck. So he pulled out a cable the diameter of a string and magnetically connected it from his tablet to the box.

He found a collection of fragmented files and as he tried to clean them, a string of text appeared. It seemed to be financial transactions for extremely large sums. He was about to close the file when a name caught his eye. Why did that name sound so familiar? Through his search concierge service he conducted a quick iWeb scan. It revealed that the names on the screen were U.N. ambassadors that favoured the integration of corporations within the United Nations. Then it dawned on him that perhaps Apple was trying to buy their way into the U.N. It made sense, as it would be an incredibly aggressive but strategic move to protect the U.S. from the increasing dominance of Eurasia, while supporting Apple’s own growth demands. To help

United States of Apple [2]


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Primary DriversGlobalizationTo amalgamate through acquisitions in order to remain internationally profitable, productive and competitive.

SecurityTo protect both personal and financial information against fraud, theft or personal harm.

Network AccessTo provide ubiquitous communication and payment access across the United States.

United States of Apple [3]

Detailed Driver Placement

Diagram shows relative strength of primary, secondary and neutral drivers within 2x2 matrix. The United States of Apple quadrant is governed by High Governance (y-axis) and Centralized Financial Services (x-axis).


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Rise of the BrandHigh governance

De-centralized Financial Services

The year is 2022 and the multinational corporations have globalized the world, permeating all corners of the earth through branded networks. Some are single, massive global brands, others are families of affiliated brands. Branded experiences have become so fluid that geographical borders are now irrelevant. The only discernable borders are those where families of brands have several affiliates dispersed across different regions.

Each brand offers its own loyalty program, catering to the diverse lifestyles and financial constraints in the marketplace, where the cost of living has become a heavy influencer of consumer decisions. The obsession with security, network access and connectivity has led to an obsolescence of personal privacy. “Thank you for flying with Virgin. Please enjoy your stay in Hong Kong,” was broadcast over the speaker system. Leaving the plane, Jen made her way to the first tea shop that had a personalized ad directed at her “Jen, come on over to have your favourite tea, just the way you like it in Toronto.”

“Welcome to Fresh Express, Jen. We’re happy to serve you today as a Tim Horton’s affiliate. Would you like to have a medium mint tea with three sugars today? It’s just like your usual at Tim’s,” said the holographic server. She agreed to the tea. However, the drink she received, while it tasted the same, was in a different cup than she was accustomed to and the portion was smaller. Brand and product consistency was pretty close, but not exact. She figured it had to do with portions being smaller in Asia and local culture still having a minor influence on brands.

If she were at Starbucks, things would have been different. That is a brand that provides customers with a seamless experience across all markets because of its strength and influence. Life was easier when she was aligned with Starbucks. Her tall refresh with honey or even a tall chai latte could be enjoyed anywhere, anytime in Toronto or here in Hong Kong. Such is the life of a PhD student attending a design conference on a budget. At least Fresh Express is mindful enough to provide service in English, knowing that she was from Canada. She had also opted into the “defaults” program to get the best in personalized service, though these days, brands made it pretty hard to opt out of that. Privacy was a thing of the past, it was 2021 after all.

Only a few years ago, Starbucks had tried to offer her a hotly sought-after Level 2 Elite status in an attempt to retain her in their program. As much as she had wanted to stay, going back to school meant she simply couldn’t pass up the value promotion offered by Tim Hortons at the time. Free Tim’s points every week was too good an offer. It had been a six-month process to enroll in the Starbucks program,


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“Verification Laboratory.” She was welcomed at the laboratory and asked for a retinal scan, a fingerprint and a DNA extraction. All of which were verified and aligned to the information already in their databases. Then Jen was asked to place her mobile identity and payment device on the charging and syncing station.

Fumbling for her mobile with the cup of tea still in hand, Jen pulled it out of her pocket and placed it on the screen with a red exclamation mark, face up on the station. The progress bar inched all the way to 100% verified and now displayed a large green checkmark.

Her identity and connection to the device has been restored and now all of her core and affiliate programs were refreshing and updating. Normally, at this point she would be released as it was just a synching system failure that can sometimes occur when travelling. But this time, it was a synching error caused by a security breach and personnel were on site intercepting the identity thief.

Jen peered through the one-way glass into the store and saw that a woman was being interrogated with her mobile phone in hand, bright yellow exclamation mark hologram projections flashed from the device. Her phone was confiscated and she was arrested and a criminal GPS chip band was strapped to her ankle.

The woman was the stewardess who had given Jen an extra blanket on the flight. It must have been the blanket that had swiped her identity during the flight. It was the second identity compromise she had encountered this week. In this world, these incidents were not uncommon, though some brands’ programs were better than others, but the convenience of fewer identity breaches came at a price only the elite could afford.

complete with credit checks after referrals from five friends.

Sadly, it was beyond her means, so she arduously completed the Starbucks exit paperwork and signed up with Tim’s with the wave of her phone over an identity-scanning terminal. For more sought-after brands, you had to demonstrate your loyalty. She had considered joining the Loblaws program, with all its grocery perks, stylish clothing line and numerous banking outlets, but it was a close second choice since Tim’s was known for its robust global affiliates program.

“Jen, your tea is ready, hot and fresh. Thanks for visiting Fresh Express. Your payment has been received over the air.”

Sipping on her minty beverage, she conceded that life with Tim Hortons wasn’t so shabby after all. It was Tim Hortons points that flew her across the Pacific to Hong Kong via their affiliate arrangement with Virgin. The network was not nearly as globally recognized as Starbucks, of course, which had lounges at every major airport and express service via biometric scans.

Tim Hortons offered bare bones identity device verifications. Their network systems definitely weren’t as elegant, but they were sufficient. Virgin also had the best reputation for wireless networks for international travel, ideal for all the conference travel Jen had been doing recently.

As Jen walked out of the café, an alarm sounded. “BEEEEEEEEEEP! Jen, your account has been compromised and deactivated. Please proceed to the Fresh Express Identity and Banking Information Verification Lab immediately.” Startled, Jen walked over to a hallway marked with a sign that read

Rise of the Brand [2]


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Primary DriversGlobalizationGrowth in multi-national mergers, acquisitions, strategic partnerships among brands.

Cost of livingThe disparity between salary and cost of living dictates what one can afford, despite the aspiration to keep up with the Jones.

Network accessReliance on technology to support instant gratification and seamless connectivity to complex networks.

SecurityThe need for trust in a complex network where personal information is continually shared and transmitted.



Diagram shows relative strength of primary, secondary and neutral drivers within 2x2 matrix. The Rise of the Brand quadrant is governed by High Governance (y-axis) and De-centralized Financial Services (x-axis).


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Multiple Choice WorldLow governance

De-centralized Financial Services

It is June 2022 in a world of hyper-connectivity and multiple choice. 6G networks are the norm with over 125% penetration of hand-held, pocket-friendly devices. The networks for information exchange are built and maintained through open-source frameworks that are championed and built on the direction of spirited socially-networked communities. Network access has become a human right and social networks have become more of an identifier than geographic boundaries.

Personal identities are now formed almost exclusively on these social networks. The once- powerful telcos have restructured and are no longer sources of domination; their role is to support community-sanctioned initiatives. The more effective their service is to the network infrastructure, the more they get to continue providing the service. It is a world of abundance but one where balanced reciprocity is the emerging norm.

The U.S. banks never fully recovered from the 2008 economic downturn, rendering government-backed credit difficult to come upon. The quest for credit is no longer as important as it once was. Not only has there been a shift in accumulating assets to sharing assets, but for those who need credit there are now multiple sources of access fragmented across networks. People can ask for funding-like support from an aggregate of angel investors. It is micro-lending on a broader scale through mutually-beneficial initiatives.

In this socially-networked world, there has been a rise in the power of individuals as brands. These Jamie Oliver-esque types reign supreme. Influencers

are the new brands. The previously big product and service brands now rely on exchanging their goods through these highly connected people. These digital networks are the new broadcast mediums and people, through their social networks, are new channels of communication and distribution.

Fewer regulations, coupled with decentralizing across all commercial and social networks, has given rise to a culture of rapid-cycling innovation, with a heavy reliance on instant gratification. New networks are coming into existence on a daily basis and each network is dependent on other networks — everything is integrated. What was once six degrees of separation is now closer to four degrees.

It is in this mesh-networked world that we meet Jessica, originally from Chile. She had recently applied to be invited into the San Francisco area network to facilitate a physical move to the region. There is a concentration of rapidly adopted social networks being established in San Francisco.


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about her day-to-day social equity building and bartering. Unfortunately, her telco account gets hacked and sends fake transaction requests to her entire network. She inavertedly orders three pairs of shoes, four rugs and three dozen bottles of champagne. All of the orders are promptly filled, only for the network to find that she didn’t order them and doesn’t have the means to pay for them. As a result, her network is unhappy with her and her social equity drops because of the security breach. She is immediately boxed out from several networks and only a few connections remained, but they were weak. She had to rebuild her social currency in order to be able to facilitate even basic daily transactions for housing and food.

Akin to the crash in 2008, like those American’s that were left very little to build on, Jessica finds herself in that same situation. She now has to innovate to survive by building new connections and equity within them, or look to create a whole new way to survive in the network. It is only through innovatively rebuilding connections and validated social equity that she will be able to transact for goods and services.

She can access them from Chile, but she would like to be physically closer to that kind of innovation. Many interactions are done over the network, but face-to-face meetings are still of value as they have significant influencing power over networking.

Jessica’s application to the San Fran network was recognized by another member who knew her from a Chilean network. This individual advocated on her behalf by giving her a high-rating social score. In this world, the types of social networks you are part of and your rating on them is the new form of currency. On Jessica’s first day in San Francisco, she looked up accommodation on a craigslist-like social bulletin board on her tablet.

She scanned the listings and selected a short-term apartment lease based on peer-reviews. She paid for it with social currency points she had racked up on a Chilean network and converted them to ‘accepted everywhere’ currency points. Because she paid up front, she received a few ‘community points’ from the apartment complex. This transaction was all facilitated through a multi-point tracking and conversion software.

While staying at the apartment, Jessica contributed coding and tech support to the apartment complex. In return, she received more ‘community points’ that she could apply to extending her stay at a discounted rate. There are typically exchanges of currency for services; this is no different than it was in 2012. The only difference is that the currencies range from points that can be exchanged ubiquitously or exclusively through select channels. The government-issued currency is completely devalued in the rise of fragmented currency systems.

Getting comfortable with exchanging contacts and services through social networking, Jessica goes

Multiple Choice World [2]


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Primary DriversNetwork AccessThe entire system is dependent on connections in order to build personal status and equity.

SecurityIn a very open source embracing system, keeping personal information secure is paramount.

InnovationA pursuit to build on or create new networks, along with new approaches to maintaining and extending the connections.

Desire For KnowledgeThe only way to gain further personal status is through multiple connections and developing meaningful relevant connections.

Instant GratificationThe connections are so numerous and vast, needs can be met quickly through these networks.



Diagram shows relative strength of primary, secondary and neutral drivers within 2x2 matrix. The Multiple Choice World quadrant is governed by Low Governance (y-axis) and De-centralized Financial Services (x-axis).


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need of a new car. After an extensive, integrated wired search, he has come to the conclusion the desired car may not be attainable based his financial situation, credit score and socio-behavioural index. This is a common occurrence in this world as highly integrated indices pre-determine consumer access to products. This has given rise to a “credit-fixing” industry, where brokers provide services to mask a person’s credit score and other indices.

The government has turned a blind eye to this practice as the result stimulates economic growth. Many brokers use unscrupulous methods to achieve the desired result, a methodology with grey ethical boundaries. Richard visits one of the less reputable agencies to “hack” his scores, guaranteeing a positive result, yet leaving possible legal ramifications if he is caught. The broker charges an extremely high rate for the practice as there is high-risk involved and consequences if caught.

Powered by GoogleLow governance

Centralized Financial Services

In 2022, this techno-political world sees a new frontier concentrated around the exchange of information, centrally controlled by Google. The government takes a hands-off approach, choosing to operate through corporate entities.

Google has become the infrastructure that underlies the majority of products. “Powered by” has cache with consumers and Google has extended its information-gathering capabilities to monitor behaviour, cross-referenced with socio-cultural and predictive modeling.

Google has infiltrated the fabric of society, amassing information on such a scale that it has eclipsed government through shear size, depth, interpretation and analysis of trends, determination of cultural emergence and economic indicators. Google is the one-stop, go to place; it fosters a feeling of trust, reliability and fairness.

Richard resides in Texas, a protectionist republic haven within the United States. After the tumultuous events of the past decade, western economies have restructured, seeing the benefits of centralized control over information and delivery of service. Government has bowed to market pressures.

The result is a more deregulated society, where the free market and global aspirations have replaced the conservatism that rose in the decade following the economic collapse of 2008. It has a more entrenched feeling of the Wild West of old. Independence, self-reliance and a moderate disregard for rules and regulations permeate.

Classically middle-class, Richard finds himself in


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decides that legal action isn’t warranted and Richard leaves without incident.

Frustrated that his expensive fix has not provided what he wishes, Richard visits a Google affiliate with a bronze service level that does not employ the rigorous information scanning that the previous business has conducted. Their data searching and analysis techniques are not intensive and they see Richard as a valid customer, based on the data provided. The salesperson shows Richard the car he desires and they proceed to sign the paperwork.

Google’s network extends into the consumer world primarily through an affiliate program, designed to give agencies access to information in order to anticipate a customer’s preference and purchase behavior, as well as helping to mitigate risk. This is a scaled service where a platinum level provides access to analytic tools, predictive modeling, forecasting, behavioural analysis, health and wellness indicators, and, of course, buying tendencies. Whereas lower service levels do not allow businesses the full range of available information.

Richard’s first attempt to buy his desired car sees him enter a “platinum-service-level” car dealership, part of the five-star affiliate program with Google. They have a behavioral analyst on staff to help the business manage potential clients and also predict the client’s ability to make good on the credit that is provided through the purchase.

As the client enters the store, a complete scan is conducted, with retinal and DNA analysis to ensure authenticity. Richard’s search behavior and product selection tendencies are provided to the business and they narrow the product offer prior to Richard entering the store or interacting with a sales staff. The behavioral analyst notices a discrepancy with Richard’s rating because it is incongruous with his behavior and purchase patterns.

There is a problem here, but because of Richard’s solid credit score fix, the behavioral analyst needs to go deeper into Google’s central knowledge warehouse to conduct a “deep dive” into Richard’s background.

Upon scrutiny, the analyst concludes that Richard has indeed fixed his scores and the product offer is immediately scaled down to what is affordable, reducing the risk for the business. The business

Powered by Google [2]


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Primary DriversNetwork AccessNetwork integration is high, always active and collecting data. The infrastructure to manage the continual uptime is new, bio-technical, robust, fluid, redundant and flexible. Customers rely on this ability to search and get product recommendations.

SecurityMaintaining personal and business privacy has forced massive investment into infrastructure, monitoring and integrity-checking. Google provides a system that is redundant, with multiple verification procedures that are proprietary and a proven track record, so much so that the only threat comes from within the organization itself.

Access to CreditCredit is a driver as employment is skewed to the high and low ends of social class. Because there is high importance given to independence, credit is used more to satisfy need rather than status, purchases just because.

InnovationA key phenomenon in this world, innovation permeates into both legitimate and quasi-legal areas. Credit-fixing requires brokers to be continually adjusting their methods to provide an appropriate credit mask for clients. The brokers attract some of the best and brightest due to the industry’s highly lucrative nature.

Powered by Google [3]


Diagram shows relative strength of primary, secondary and neutral drivers within 2x2 matrix. The Powered by Google quadrant is governed by Low Governance (y-axis) and Centralized Financial Services (x-axis).


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Signposts for Monitoring Efforts Going ForwardA signpost is a signal or indicator that a given scenario may be unfolding. For example, three years from now, if there are radical changes to anti-trust laws, it might indicate that a potential future similar to the United States of Apple may emerge. Here are some signposts we identified to help monitor possible futures characterized by our four scenarios:

United States of Apple• Another massive economic crash with limited recov-

ery results in a big bail-out by an individual entity or corporation

• Single ownership of combined financial and communi-cation networks

• Exclusive relationship between one entity and the government

• Increase in multi-service companies under a single massive, dominating and influential brand, i.e. Rogers, Walmart, etc.

• Deregulation of monopolies and radical changes to antitrust laws

• Changes in laws around political party funding that en-able larger donations by corporations

• Reduction in the role of government• Increase in corporations as government facilitator/ven-

dors of choice, i.e. Monsanto in Iraq

Rise of the Brand• Increase in multi-service companies like Virgin,

Walmart, Costco (e.g. finances, insurance, health care)• Increase in multi-company buyouts and alliances, i.e.

Nike and Apple buy AT&T• Growth in global alliance networks (e.g. Star Alliance,

etc.)• Growth in lifestyle brands (Virgin, Starbucks) combining

products and services• Increased investment and adoption of loyalty programs

resulting in increased purchases being made with points rather than dollars and an increase in the buying power of points

• Increased brand ubiquity

Powered by Google• Information aggregators partnering with other brands

to develop and manufacture products and services, i.e. Ford and Google create self-driving cars

• Information aggregators become angel investors• Information aggregators enjoy special exceptions

to privacy laws to collect and manage information, i.e.Google does national census work

• Mergers for sake of information gathering• Decline of small information data warehouses.• Integration of public and private information in a cen-

tralized location (in the cloud, etc.)

Multiple Choice World• Breakdown of leadership structures• Occupy Movement’s 99% wins• Increased number of multiple large-scale bankruptcies• Mass boycotting of large corporations• No money flow and tighter credit regulation• National currency loses value• Increase in civil engagement• Increase in local governmental control and impact• Return to bartering as transaction method• Mesh networks and micro-lending rise in popularity• Social responsibility and personal reputation increase

in value• Fewer intermediaries, increase in peer-to-peer initia-

tives


5Strategic Options

29

Surfacing and Creating OptionsTaking into consideration the scenarios and the stakeholders, each member of the team brain-stormed a list of strategic themes inspired by their scenario.

The options were then aggregated and shared within the group. Some of these options included:

• Invest in biometric identification technology (e.g. retinal scan, fingerprints, etc.) for various touch-points including ATMs (original thought was “include scanning capabilities in ATM”)

• Extend knowledge/information tied to identifica-tion to include psychological and behavioural characteristics

• Explore expanded partnerships with alternative loyalty partners

• Develop techniques to identify fraudulent activi-ties and mitigate risk

Clarifying and Clustering Options

Each option was clarified by the author, then collec-tively rewritten and combined and the list of about 30 options were classified into one of 10 categories:

a. Legalb. Loyalty programsc. Identificationd. Tools at point of salee. Network infrastructuref. Securityg. Privacyh. Social reputationi. Servicesj. Strategic partnerships


5Strategic Options


Refining Strategic OptionsUpon further review, it became apparent that our options list contained both strategic and tactical options. The team flagged the options that were strategic in nature and by using the ‘5 Whys Tool,’ they were able to widen their lens and uncover the strategy behind tactical options. For example, the strategy behind the tactical option, “Introduce barcode, QR code or RFID scanning technology infrastructure to allow for self-serve, over-the-air payments by consumers” became, “Improve customer convenience and experience through emerging technologies.” After considering tactical versus strategic options, the team arrived at a list of eight options.

A final round of refinement led to a list of five key strategic options, intentionally broad and general in nature, with specific strategic direction, to provide our fictitious stakeholder with the opportunity to generate actionable tactics aligned with company goals and aspirations.

Five Key Strategic OptionsForm Strategic Partnerships and/or Acquire Businesses

Our stakeholder could potentially form strategic partnerships or alliances with complementary entities and/or acquire businesses that could reinforce a competitive advantage in the marketplace (e.g. consider partnering with Google to offer mobile payments via bank accounts linked with Google Wallet or acquire a foreign bank in which our stakeholder does not yet have presence).

Enhance Customer ExperienceOur stakeholder could invest in enhancing the customer experience through service design. This would include looking at the brand touchpoints along the customer decision-making process, in addition to mapping out how they engage with banks directly through various channels and products.

Cultivate Community Among CustomersOur stakeholder could enhance their social capital in its customers’ communities by offering programs or initiatives that strengthen and enrich those communities and the associations they have with the bank (e.g. ranging from recognizing that micro-lending is emerging and developing complimentary services for the community to sponsorship of local initiatives).

Acquire and Retain ConsumersOur stakeholder could focus efforts on attracting consumers and maintaining their loyalty of existing customers (e.g. they could look to product innovation as a means of attracting customers or to discounting/added value in the form of special offers).

Invest in Technology InfrastructureOur stakeholder could invest in developing technological networks of their own and investing additional transaction services (e.g. a wireless services network).

5Strategic Options


Evaluating Strategic Options Via Wind TunnelingWind Tunneling is a process by which the strategic options (what is most important for the success of the stakeholder) are evaluated for their role and presence in each of the scenarios. This serves to identify areas of implication and potential action based on organization priorities.

Because of the inherent variation between scenarios, the team felt that the Option/Scenario Matrix (a.k.a. Wind Tunneling) was the most effective tool for assessing the impact and validity of each option in each scenario. In order to keep methods of evaluation of the final dossier consistent with the ‘driver’ evaluation, the team opted to adopt the Primary, Secondary and Neutral importance scale used to measure the trends, instead of the traditional High, Medium, Low, Neutral wind tunneling measurement scale. The final evaluation of the options is shown below:

5Strategic Options

Strategic Option United States of Apple

Rise of the Brand

Powered by Google

Multiple Choice World

Form Strategic Partnerships and/or Acquire Businesses P P P P

Enhance Customer Experience S P P P

Cultivate Community Among Customers N P N P

Acquire and Retain Consumers N P S P

Invest in Technology Infrastructure N P P P


United States of AppleRemaining competitive and profitable in this scenario will prove highly challenging. The network’s governing body will determine the level of customization permitted. Existing bank products and services will need to be redesigned to meet any and all requirements imposed by this new regime.

Strategic Business PartnershipsP – Primary

In order to survive in this world, strategic business partnerships need to be created and maintained at the government level and with agencies or manufacturers who are able to build or provide ancillary products and services.

Customer ExperienceS – Secondary

The bank can no longer rely on technology to differentiate itself in the marketplace. A distinct customer’s experience could continue to be achieved in-person at the various bank branches, through visual identity and in the level and quality of service offered.

Role of Community N – Neutral

Since network access to bank services are highly governed and centralized, the voice of the community is silenced. Heavy lobbying is required in order to sway the policymakers’ decisions. There is; however, the possibility of creating and leveraging community locally at the branch level through customer appreciation days and/or town halls.

Acquire and Retain ConsumersN – Neutral

Consumer acquisition and retention is determined by the number of users in the network. This level increases and drops along with birth and death levels. Banks will need to find innovative methods to promote and differentiate within the network’s constraint. They could, for example, create peripheral services.

Technology Infrastructure N – Neutral

In this monopoly, access and use of the network is tightly controlled. External software developers requiring access to this secure network and publishing rights on the proprietary mobile devices must adhere to high standards and strict protocols. Ongoing training will be required for the bank’s executive and legal teams, customer service representatives, bank tellers and IT staff. Potentially, new software and hardware will need to be purchased.

5Strategic Options

Wind Tunneling Implications by Scenario


Rise of the BrandThis is a highly competitive market where alliances between brands are paramount in order to secure customer loyalty. There will be significant innovations around service design and transaction facilitation in order to deliver the personalized service and experiences that are aligned with brand delivery expectations.

Strategic Business Partnerships P – Primary

Strategic partnerships will be vital to survival in this world. Building brand recognition and aligning with brands that have complementary values will be important to convey a unified image to customers and attract continued loyalty. Business partnerships will be much more important than governmental affiliations in this world, and international reach will be important whether through strategic acquisitions or affiliation agreements.

Some of the approaches to forming strategic partnerships or acquisitions our stakeholder could take, are to look at companies that traditionally were not in the customer-to-business payment space, but are increasingly moving to innovate in this space. For example, if Amazon were to begin offering financial services, our stakeholder could consider a partnership or acquisition to maintain profitability, presence and influence in the consumer to business payment sphere.

Another path would be to acquire or build exclusive partnerships with complementary brands in the same sector, but in geographical regions where there is little reach within our stakeholder’s existing network (e.g. offering a full range of services to a foreign bank’s customer base in exchange for similar reciprocal privileges for the stakeholder’s consumers).

Customer Experience P – Primary

With so many options available to consumers in this world, it will be challenging to acquire new customers and difficult to retain them. In this world, a competitive advantage can be achieved by adopting a client-focused approach to service delivery, by using social status as a means to position the bank in the marketplace, by adopting new technologies that address consumer demands.

Customers will be driven by convenience and lifestyle, making payments however, wherever and whenever they choose. Consumers will demand that payments be a seamless and a positive experience; for example, no more waiting in line at the cash register.

Acquire and Retain Consumers P – Primary

Traditional acquisition tools are still in place: sampling, introductory offers, advertising and loyalty points. New programs and tactics will emerge that offer highly personalized offers with rewards/currencies unique to the brand in order to attract and retain customers.

Being brand loyal will be ultimately more cost effective when amortized across a lifetime and lifestyle because there will be inherent added value rewards for consistent usage of the brand across categories. This aligns to a compelling retention approach.

No-name brands could become new luxury or rebel brands for those who can afford to shop outside of a brand loyalty program. There could be a luxury brand counter-counter with a rise of no-name among early adopters and the wealthy. This could lead to some customer erosion if there is limited differentiation or innovation within a given brand or product set.

5Strategic Options


5Strategic Options

Technology Infrastructure P – Primary

The technology employed in the delivery of services will offer opportunities to differentiate a brand, establish a competitive advantage and build brand equity. Access to consumer information will be exclusive to brand networks with which consumers are affiliated and will be secured on proprietary networks.

Investment in technology infrastructure may be extensive due to the competitive landscape. Broad network penetration requires management of multiple protocols and standards, while adhering to strict security requirements to maintain the integrity of each brand affiliation and not breach disclosure assurances.



Multiple Choice WorldMultiple Choice World is a unregulated world where a diverse customer based is segmented into a number of networks, each with their own protocols and standards. Social capital is an important consideration for innovation given that information is valued as both a commodity and delivery of payment. In this world, currencies are fragmented and social capital is a sign of equity and resources. As a result, communities are tight-knit and individual consumers can hold a range of influence on other consumers. Payment is done through social networks and is more akin to barter than to an exchange of standard currency. There is no financial institution competition in regards to payment and loans but there might be one for barter facilitation.

Strategic Business PartnershipsP – Primary

Our stakeholder may be able to thrive in this context by offering services partnerships with localized entities in order to ensure market penetration, community by community. Building strong relationships and partnerships with influential community members will also be a promising approach. To address fragmentation of currencies, our stakeholder could also position itself as a leading broker of multiple currencies, similar to a foreign exchange brokerage to facilitate the fluidity of transacting in multiple currencies.

Customer ExperienceP – Primary

In this world, a competitive advantage could be achieved by redesigning bank products and services in order to help fulfill, alleviate, accelerate, or improve exchanges between individuals. This is a world

built on accessibility and convenience. Any service based industry will need to ensure they have the infrastructure and points of distribution to facilitate and deliver on that expectation. Consumers in this capacity control the exchange and the transaction. There is no longer the need for an intermediary to facilitate the exchange. The servicing will be in the ability to provide access to networks and to tools that align to customer need.

Role of CommunityP – Primary

This world is reliant on the depth and breadth of the community. Each network is a community unto itself whereby transactions are facilitated through exchange between members. With a fragmented currency system there is limited opportunity for individual credit ratings, the only validation an individual has in this world is their own reputation. This is a new form of social equity that is evaluated by members of the community with whom there has been a relationship or exchange. The collective community replaces any government entities and through the expansive network of people more of the community becomes connected shrinking what was commonly considered 6 degrees of separation is now 4 degrees. The opportunity for our stakeholder to be transparent and easily understood, this would enhance approachability, which would lead to understanding and greater acceptance within the community.

Acquire and Retain ConsumersP – Primary

Loyalty is extremely fragile in this world as a result of the multiple opportunities for affiliations. Acquisition is easy because there is a low-barrier of commitment and is facilitated by word of mouth. Retention is maintained because of of the social status of who

5Strategic Options


5Strategic Options

is part of the network. Because information is both a commodity and delivery of payment across the network it will be important to understand how to leverage the information to build a network and connectivity with a customer base. There is a also a high demand for customization; this will necessitate the development of consolidated one-touch banking products that can be used across a mesh network or that have hackable/open source capabilities with flexible usage and fee structures.

Technology InfrastructureP – Primary

As networks are diverse and unregulated, therefore adoption of standards and protocols are difficult to manage as strict adherence. Technology infrastructure has both conventional components and innovative, non-traditional approaches to connectivity. Social identity is key in this world, providing a means of access and capital depending on network style. Approval into a given network may require extensive resources including administration, processing and verification procedures. The need to safeguard personal infomation is in conflict with the role of social capital. Managing the flow of personal information in a public domain along with monitoring the values of multiple curriences will require significant investments. The opportunity is to develop services tied to customer behaviour and social capital remain attractive options for competitive advantage in this landscape.



Powered by GoogleIn this future, the government has taken a hands-off approach to regulation and compliance. Their growth in a grey market provides legitimate but illegal services, such as credit fixing. Google is the key stakeholder and major provider of information, services and prestige. Alignment with Google is critical to ensure long-term sustainability. Strategic partnership is a primary focus as well as technological investment to develop onto Google’s platform. The institution must be flexible in their service offerings, while mitigating risk and ultimately differentiating themselves in the marketplace through innovation.

Strategic Business Partnerships P – Primary

Partnerships remain confined to an affiliation structure with Google. The level of investment or priority determines the access level within the Google sphere, providing access to diagnostic and behavioural analysis. Other associations are possible and there is an ability to extend market reach by up-selling with an association that will share risk.

Customer Experience

P – Primary

Technology plays a key role in differentiation with other competitors. Investment can be related directly within the realm of Google itself, or through the extension of Google’s developer base, allowing a company to add value on top of an existing shell. This is a critical component for customer service. However, customer loyalty is low in this world, as customers will tend to go where the can get the most value for what they can afford.

Role of Community N – Neutral

Google has infiltrated the fabric of society, amassing information on such a scale that it eclipsed government through sheer size, depth, interpretation and analysis of trends, determination of cultural emergence and economic indicators. Community is tied tightly to what information Google wishes to capture and for that reason, tends to promote connection between people. For the business, accessing that information as a competitive advantage is possible, but is still reliant on access privileges to Google’s infrastructure

Acquire and Retain ConsumersS – Secondary

Consumer acquisition and retention is driven by service offering and the ability of a business to offer not only the best deal, but possibly be flexible on a customer’s ability to access credit. As a financial institution, up-to-the-minute trend analysis and determining a customer’s profitability based on spending habits and risk mitigation are necessary in order to remain viable.

Technology Infrastructure P – Primary

Google drives major stakeholder interests and the level of access to consumer data. Business affiliation within the Google network provides both market penetration and risk mitigation. Innovation and application development trends are higher due to a large developer community, generating innovative service options as a competitive advantage. Security is a key consideration due to low governmental regulations, yet there is necessary compliance with Google’s architecture.

5Strategic Options


Discussion of Options and Stakeholder ImplicationsFrom the options elicited and refined from our four scenarios, we turned to Kees Van der Heijden’s Scenarios, Strategy and the Strategy Process to design four customizable strategies to help the bank’s executive team navigate its way towards a beneficial future.

Robust Strategy Significant But Safer InvestmentsConservative in nature, the Robust Strategy proposes the bank concentrates its efforts and resources on Strategic Partnerships and on Customer Experience. Since both these options rated as high importance across most scenarios, they guarantee modest returns and a return on investment.

5Strategic Options

Strategic Option United States of Apple

Rise of the Brand

Powered by Google

Multiple Choice World

Form Strategic Partnerships and/or Acquire Businesses P P P P

Enhance Customer Experience S P P P

Cultivate Community Among Customers N P N P

Acquire and Retain Consumers N P S P

Invest in Technology Infrastructure N P P P

Flexible Strategy A Weighted ApproachA Flexible Strategy encourages substantial investment in Strategic Partnerships and Customer Experience as well as minor investments in Consumer Acquisitions, Technological Infrastructure and in Cultivating Community Among Customers. Although riskier than the Robust Strategy, this strategy offers the possibility of higher returns.


Multiple Coverage StrategyA Balanced ApproachA Multiple Coverage Strategy involves equal investments in all five options. This strategy is somewhat risky and more expensive because investments are made in all areas, but not weighted based on likelihood of occurrence. Its advantage is that it ensures that all options are covered. Since the amount of resources invested in each option is modest in comparison to the Flexible Strategy, it offers the possibility of mid to high returns that could cover any losses incurred on any failed investments.

Gambling StrategyHigh Risk, High RewardA Gambling Strategy would encourage the Executive Team to invest in an option with a high level of uncertainty (Role of Community, Consumer Acquisition and Retention and Technology Infrastructure). This strategy is the riskiest, yet offers the highest possible return.

5Strategic Options


Assessment Tool Template

Strategy Financial Performance

Risk Management Performance

Strategic Fit Cultural Fit

Robust Strategy

Flexible Strategy

Multiple Coverage Strategy

Gambling Strategy

Note: This is to be filled out by the stakeholder with a low-medium-high ranking

5Strategic Options

Strategy Assessment ToolIn order to assess which strategy to implement, and taking into consideration Van der Heijden’s work, we created a matrix to help assess each strategy based on the following criteria:

Financial PerformanceHow will this strategy perform financially? Does the bank have the financial resources required to implement this strategy?

Risk Management PerformanceCan the bank mitigate the risks incurred through the implementation of this strategy?

How risky is this strategy?

Strategic FitHow does this option fit within existing organizational objectives?

Cultural FitDoes this strategy fit with the organization’s existing values?


Next StepsThere are no facts about the future. The scenarios and the signposts developed are to serve as a guide to help our stakeholder make informed decisions about how to steer their organization over the next 10 years. There are no formal conclusions to be made, only recommendations and considerations that will need to be evaluated based on organization priority and risk tolerance.

What is anticipated is the migration from paper to digital transactions and currency, all facilitated by technological innovation that aligns with service design. The shift in power and ownership, along with the health of the economy is unpredictable at this point in time. It will be these broader social shifts that will inevitably influence and design the future and help to place priority on any given investment. The role of this work is to shine a light on potential futures and to be aware of the signs that indicate such a transition in order to make the best decisions possible for the success of the stakeholder.

For further discussion about this foresighting exercise or how this could be applied to any other initiatives please reach out and continue the conversation.

5Strategic Options


6Bios

43

6Eric Leo BlaisProducer (Vice-President, Digital Media)Peace Point Entertainment Group

With over 15 years of digital media production under his belt, Eric Leo Blais continues to develop proven cost-effective and creative business and marketing solutions that leverage digital technology to promote brand awareness, improve customer loyalty and retention and streamline business processes for a wide range of industries including: information technology, entertainment, automotive, health and fitness and legal and human resources. Over the years, he has worked for multiple blue chip brands, including Lexus, Nissan, the Toronto International Film Festival, Workopolis, Lexmark and Deloitte.

Most recently, Eric produced for Peace Point Entertainment Group a series of award-winning mobile software applications for iOS, BlackBerry and Android devices. He’s also facilitated a number of workshops on social media for non-profit organizations.

Eric holds a degree in Art from the University of Ottawa, a certificate in Design Management from Ryerson University and is completing his Masters of Design in Strategic Foresight and Innovation at OCAD University.

Jen ChowDesign ResearcherNurun

Jen is passionate about people, culture and digital technology, striving to help brands and businesses build meaningful, valuable experiences for customers. As a design research methods geek, she enjoys employing a range of techniques to uncover customer insights and novel business opportunities. Holding the strong belief that businesses have much to benefit from human-centred and inclusive design, she combines her background as a Chartered Accountant and her graduate work in strategic foresight and innovation to build compelling strategies for a range of organizations.

Jen holds Bachelor and Master degrees in Accounting from the University of Waterloo, with an Option in Society, Technology, and Values. She is currently completing her Master of Design in Strategic Foresight and Innovation at OCAD University.

You can connect with Jen on a variety of channels via jenchow.ca.


Bios


6Bios

Jessica MillsBrand and Business Design StrategistBensimon Byrne

Born and raised on the west coast, Jessica has always had a passion for nature, sports, witty banter and bone tingling advertising. She has been in the branding and communications industry for over 15 years and has worked on some of the most recognized global brands including Nike (three years) and Starbucks Coffee (eight years). During that time, she successfully brokered partnership and sponsorship deals with the NBA, Apple (iTunes), Royal Bank of Canada, Bell Mobility and the Toronto International Film Festival, while maintaining and supporting corporate and retail objectives through marketing and advertising initiatives.

Most recently she has made the move back to the agency side as part of Bensimon Byrne’s leadership team for Scotiabank.

Jessica holds a Bachelor degree in Psychology from the University of British Columbia and is currently completing her Master of Design in Strategic Foresight and Innovation at OCAD University. She can be found @millschronicles.

Richard NormanBusiness AnalystSilent Spiral Media

A creative, dynamic and critical thinker, Richard has focused his attention on software development, digital media and interactive arts for over 15 years. Generating strategic direction for technology infrastructure and interactive media development is a passion. Working with a wide range of clients and industry sectors, including OCAD University, the Toronto International Film Festival, Centennial College, SONY/BMG, Toronto Western Hospital, Canadian Forest Products and the Government of British Columbia, Richard has developed strong leadership, problem-solving and engagement techniques to find creative solutions to complex problems. A wide-range of other interests — tennis, soccer, beach volleyball, snowboarding, music, art and photography — motivates and balances his life.

Richard holds a B.A. (Honours) from Queens University, a post-graduate diploma in Geographic Information Systems, and is currently a Masters candidate in Strategic Foresight and Innovation from OCAD University.


7Appendix


7Appendix

Drivers by Scenario Quadrant

financial services

gove

rnan

cego

vern

ance

centralized de-centralized

high

low

EXPANDED DRIVERS + TREN

D MATRIX

financial futures47

blais, chow, mills, norm

an

7Appendix

SOC

IALTEC

HN

OLO

GY

ECO

LOG

YEC

ON

OM

YPO

LITICAL

VALUES

Friend Lend a Friend

Social U

nrest All For O

ne, O

ne For All…

Sort of

Dancing

Cheque to

Cheque

Everyone M

anage Your M

oney

Mobi-M

e-M

oneyC

ashless G

et Your H

ead in the C

louds

Uh O

h, I Think I’ve Virtually C

aught Som

ething

Smart-

phone as Persona-lized Branch

No’ M

o’ M

oney G

row

Symbiosis

of Financial Institution and Telco (credibility and netw

orked)

Financial C

limate

Chaosz

All In All There’s Another Brick In The …

Paying In Points

I owe, I ow

eForever In D

ebt

SecurityStratification of Class / Polarization

Disparity betw

een salary and cost of living

Real time

Streamlining

Desire for control

Need to be connected 24/7

Access to Internet

ConvenienceNo Resources / Too M

uch Debt

(B) G

overnment

Intervention

Economic

Globalization

Industria-lization

Investing in w

hat matters

“personally” (social response-ability, personal values)

Cost of living/ inflation rates increasingDisruption for disruption sake

‘Keep up with

the Jones’Social pressure for w

ants, not needsRising education levels

Instant gratification

Efficiency through innovation (better designed tools)Instant gratification

Efficiency through innovation

National Protection-ism

, Jurisdiction

Demand for

personalized service

Mergers,

Acquisitions, strategic partnerships

Free Trade, G

lobalization

No access to credit

(B) Is this a block (to our question)?

Instant gratification

Increased financial literacy

Demand for

security Convenience

SecurityIncreased adoption of sm

artphones

Shift in M

anufactu-ring Centres

No/limited

access to creditConservative lending attitudes (from

financial institutions)

Living beyond m

eansDesire for m

ore know

ledge/

Increased access and the internet

Time Spent

Online

Increase in public com

fort with

online/mobile

banking

People w

anting to be sm

art with

money

Desire for m

ore personal control

Incentive to reduce labour costs via self-serve

technology and earn m

ore profit


7Appendix

Today, 57% of Canadians live paycheque to paycheque with no savings. They admit they are in trouble if they are one week late. This figure jumps to 63% for adults aged 18 to 34 and to 74% for single parents! Although most of these Canadians cannot afford to save, 40% choose simply not to! (Community Team, cbc.ca, September 8, 2011)

Signals

There is a dramatic decline in RRSP contributions as well as yearly savings rates.

ImplicationsFinancial Institution

There is a drop in market demand for investment products. Financial institutions need to readjust and provide alternative products and services. Reduced revenue means job cutbacks and reduced benefits.

Enterprise

Mutual funds and the stock market provide seed capital to create or grow a business. It will therefore be harder for entrepreneurs to create businesses and expand existing ones, resulting in “an even wider gap between the “haves” and “have nots”.

Customer

A sudden downturn in the economy will force more families into poverty further taxing existing social systems. It will be incredibly challenging for these families to recover. Those adults who do not have a pension plan or access to a secondary source of revenue face a late (or no) retirement and poverty in old age.

Extrapolations10 Year Extrapolation

(+) Understanding that the average Canadian can no longer afford to save for the future, the Canadian government revamps the Canadian Pension Plan, labour laws and the social housing market.

(-) More and more Canadians find themselves downsizing, defaulting on loans or declaring bankruptcy. Canadians who are 60+ are working longer resulting in fewer possibilities in career advancement for the existing workforce and fewer entry level jobs for new graduates.

20 Year Extrapolation

(+) Canadians have access to retirement programs which provide them with food, shelter, medical attention and a safe environment.

(-) Canadians share small houses or apartments with many family members and friends. Slums increase in size and in number. Health problems increase because of living conditions and reduced access to nutritious food.

Dancing Cheque to Cheque

social trends


7Appendixsocial trends

Dancing Cheque to Cheque [2]

Counter TrendCutting Back

Consumers are increasingly cutting back expenses in order to make ends meet. In America, this includes purchasing generic brands, eating bag lunches, cutting back on cable bills and using refillable water bottles. (Harris) At the heart of this trend is a micro-lending system as developed by the Grameen bank.


7Appendix

Friend Lend a Friend

social trends

• Innovative business models, like the Business Model Canvas publishing initiative are funding through peer-to-peer and crowd sourcing methods.

• Banks and creditors are limited in their cash resources to help fund loans. Capital is at a premium in several global markets.

ImplicationsTraditional one-to-many lending models will transition to one-to-one collaborative models which can have a broader impact from a geographic and economic perspective. People who have more faith in their networks of peers than in their financial institutions. This can accelerate the shifting of their traditional investments and savings into a more social-based investments funded through micro-lending that have a higher propensity of return on investment. What was once a feel-good act could actually become a viable investment opportunity for individuals. This could change the evaluation of investment and stock market value if the migration pattern continues to grow.


Currently 57% of Canadians will go to their home bank branch for a mortgage or line of credit, 10 years from now the first place they will go is to their network with a ‘purpose/business plan’ and repayment strategy. There will be peer review of credit scores which have more meaning than banking institution scores (similar to an eBay seller ranking).

Micro lending was a way to finance entrepreneurs with small loans in third world countries. As on-line social networks have grown so has the propensity of this service to be more widely used and supported. By removing a central bank from the decision process it has empowered those with resources to choose action or inaction in selecting a particular individuals business case. What makes this interesting is the migration of micro-lending from a 3rd world to 1st world population as well as a migration from individual lending to organized-group lending.

SignalsOver the past 6 years micro-lending organization Kiva has distributed $233 million in loans from 614,671 lenders. A total of 309,076 loans have been funded. The average loan size is $384.39. Its current repayment rate is 98.79%.

• In 2011 it launched is first North American micro-lending service in Detroit, Michigan.

• Larger banks are experimenting in micro-lending concepts. Bank of American has invested $3.7 million in a pilot initiative.



Friend Lend a Friend [2]


Broad adoption of micro-lending could potential change the landscape of investment funding, community lending and regulations. A new shareholder model shift from Wall Street to Main Street will start to emerge that will hold corporations more accountable to individuals with less ability to lean on major banks/lending institutions.

Counter TrendGovernment intervention with respect to the regulations around return on investment and foreign aid limitations. Alternatively there is an influx of funding at similar lower interest rates (or subsidized by governments) that diminish the need for micro-lending.


7Appendix

Social unrest grows in difficult and uncertain times. The flavour of recent social uprisings parallels other emerging ideas: use of social media technology to organize, shifting individual values, opportunism and self-interest all in the face of austerity measures.Radical disruption is not a new phenomenon, yet, its manifestations in recent years has been different. Targeted social disruptions using social media technology to connect activists and radicals; the piggybacking of opportunists on legitimate causes, all to generate societal disruption for personal gain.

SignalsTechnorganizing to ruin the nation

During the London riots, social media was used to help coordinate and prolong the effects of the social disruption.

Egypt, Libya, Greece, Palestine...Who’s next

Egypt and Libya have seen armed uprising at the hands of ineffectual government. Greece responding to austerity measures, and Palestine striving for nationhood. The drivers are varied as are the results, who will be the next nation to mobilize.

BRIC countries aren’t immune

Social unrest is on the rise in China and India faces potentially grave consequences to rising inflation. The result may lead to social upheaval.

Opportunism is the nature of the beast

In the UK and Canada, recent riots have created havoc and devastated businesses. After an initial incident, organized, focused and targeted opportunists capitalized on disruption for personal gain.

Cyber Terrorism, Cyber Conflict, Hacktivism (Denning, 2011)

New forms of organized conflict have the potential to disrupt infrastructure by targeted attacks on strategically important networks, overloading websites or organizing through the internet.

Implications(+) Egypt and Libya race towards democracy, increase in personal freedom

IMPACT: Overall societal stability due to reduction in autocracy

(+) Potential shift in political machine as governments address public concerns

IMPACT: Overall societal stability, people have greater voice in government

(+) Activism enhanced through connected social media, real time or asynchronously.

IMPACT: Ability to mobilize faster; gain greater traction and increase connections

Social (Media) Unrest: All For One, One For All… Sort Of

social trends



Social (Media) Unrest: All For One, One For All… Sort Of [2]

dissenting voice; police use intensive data mining techniques in collaboration with social media corporations to anticipate and circumvent due process in policing social unrest.

Counter TrendApathy and Consumerism growth in North America

From voter turn-out to rampant consumerism to lower organ and blood donorship, North America has major obstacles to join other nations in promoting activism.

(-) Social disruption generates need for increased security; potential for increased surveillance of general population, erosion of privacy and social liberties.

IMPACT: Increase operating budget costs, mistrust spreads, exacerbating conditions for unrest

Implications (-) Cyber attacks on sensitive networks (energy, water) create large scale disruptions

IMPACT: Market reacts, reducing investments, stifling economic growth

(-) Potential catalyst for fundamentalist attacks, through social and cyber conflict

IMPACT: Destabilization of developing nations economies


(+) Re-socialization of government; rise in activism and social justice; limiting of free trade initiatives and government responsive to employment,

(-) Destabilization of current stable governments; increased surveillance and curtailing of civil rights; governmental crackdown on public assembly, era of autocracy reigns.


(+) Globalization of activism facilitating large scale action to minimize social issues

(-) Internet becomes an unsafe place to voice


7Appendix

Simple, easy-to-use, visually appealing tools are emerging and becoming more commonplace for people to become more empowered in financial management with minimal effort and seamless convenience.

SignalsBundle – personal finance data, money advice, trends, news and community[1]

Tools like Mint support personal financial management on mobile apps[2]

Tools like Xpenser let you capture and manage expenses using a mobile device[3]

Chase offers a mobile app called Jot for iphone and Android, allowing for mobile money/expense management[4]

Small business owners can use mobile apps that complement services like FreshBooks to manage billing, etc.[5]

ImplicationsFinancial literacy and discussion will become more commonplace and less taboo to discuss. People will become increasingly attuned to spending and financial planning.

Extrapolation 10 to 20 Year Extrapolation

Financial service providers will find themselves with clients that want to take a more participatory role in the client-service relationship than ever before.

Everyone Manage Your Money

social trends


7Appendix

More and more, there are ways to make payments through mobile phones through attachments, apps, etc. courtesy of financial institutions, entrepreneurs, and telecommunications providers. There is also increasing flexibility around where and when payments can be made.

Signals• German Rail System Touch&Travel mobile

payments via QR codes and NFC[1]

• Chase offers mobile person-to-person payments (P2P) and remote deposit capture (RDC) capability[2]

• Telco, Financial Institutions and phone manufacturers are investing in NFC tech[3]

• M-PESA in Kenya allows for cashless transactions from phone to phone[4]

• \Visa’s payWave program (pilot project) in New York taxis and public transit via a chip inserted into their smartphone’s memory card slots (not NFC)[5]

• Airtel Africa, Standard Chartered Bank and MasterCard Worldwide is launching PayOnline

mobile phone wallet[6]

• Square credit card payments using their iphone or Android smartphone[7]

• AT&T, T-Mobile, Verizon created ISIS partnership to launch NFC technology U.S.[8]

• Amex launch an email-based money transfer service called Serve, similar to Paypal, with mobile app support[9]

ImplicationsThe speed of transactions will accelerate and increasing reliance on technological infrastructure will call for careful back-up planning around power and connectivity.

Extrapolation

10 to 20 Year Extrapolation

Wider access to banking via mobile tools without need for credit or traditional accounts.

Cashless transactions anytime, anywhere

techological trends


7Appendix

Smartphones are increasingly capable of branch services.

Financial institutions are foraying into mobile applications, text message technology, and mobile browsing experiences to deliver information and functionalities of bank branches.

Signals• M-PESA in Kenya operates by having people do

all banking on their phones without bricks and mortar branches[1]

• BankAtlantic’s mobile website, text message banking, mobile apps[2]

• Citibank and Bank of America support offer mobile tools for reviewing transactions, account balances and alerts, bill payments, intra-account transfers and branch and ATM locaters[3]

• Intuit is targeting financial institutions like Martin Federal Credit Union in Florida to help them provide basic banking information via mobile apps[4]

ImplicationsFinancial institutions will need to find new ways to add value to customer experiences and maintain ways to keep mobile information secure.

Extrapolation

10 to 20 Year Extrapolation

Financial institutions will need to revisit and redefine what branches will offer clients.

Smartphone as Personalized Branch

technology trends


7Appendix

Financial transactions between payee and payer are migrating from the time consuming paper transactions of cash and check to tech-based, on-line and mobile service networks. This is creating less dependence on banking institutions an more reliance on mobile sector innovation.There are approximately 3000 mobile phones (mobiles) for every physical bank in Canada. As mobile technology continues to innovate in the financial space the need and use for traditional transaction systems will change. With the ability to purchase and transfer funds through mobiles between institutions and individuals, the role of financial transactions are becoming increasingly decentralized to the extent that the role of physical bank and actual paper currency is required in fewer instances.

This will have significant impact on how financial institutions re-frame their business models in order to maintain share of wallet , retain and grow their customer base and how they will design for desirable customer experiences or risk losing clients as they migrate to more contextually relevant financial solutions.

Signals• In 2011, Rogers Communications applying for

a banking license. In 2009, Google applied for a banking license in London. They are in the testing phase of their ‘easy tap’ payment system as part of their Google Wallet platform.

• It is anticipated that $50 billion will be spent using Near Frequency Communication Technology by 2014.

• Over 2 million transactions a day and over $350 million a month is transferred within Kenya using this mobile text payment service that requires no formal banking infrastructure.

• According to John Donahoe, eBay’s CEO, payment using phone numbers instead of credit card numbers is significantly more fraud resistance and a safer method of payment because a phone number is not attached directly to any financial data, unlike the credit card.

Implications• The use of mobile technology has the potential

to complete y change a bank’s service and business model. Reliance on them as an financial institution may no longer be required in the face of new emerging financial transaction, bank-like services like ‘mobile companies- as banks.’

• The ease of the transactions could have significant impact on banking fees and customer retention, with a potential downside of eroding day-to-day banking services and accounts.

Mobi-Me-Money

technology trends


7Appendix

Mobi-Me-Money [2]

technology trends

Counter TrendThe ability to align mobile carrier systems may slow the adoption of the uptake in services. In highly government regulated banking systems there may be a desire to slow down mobile payment adoption in order to keep the existing banking structure in tact in order to protect economic interests.

• The prevalence of shared information there could be security challenges or international tariffs /duties for payments that require increased regulation and monitoring.


Full implementation of a mobile payment society would mean that all payment systems are managed through mobile service providers.

This would likely be as a result of these service providers developing their own banking system or by having partnered with a major bank. For example, Rogers is now a majority shareholder at Scotiabank.


Mobile payment adoption will likely be at 100% globally which would mean that the act of banking is no longer part of an individual’s

Financial routine. The ubiquity of this usage would lend itself to believe that a hyper secured 4G-esque networks in all nations that facilitate

transactions on a global scale through a new mobile-currency standard for purchases through mobile networks.


7Appendix

Cloud Computing, an evolution in computing architecture, provides flexible and scalable infrastructure, software and hardware management, and allows for fluid customer-centric access to products and services to support the next generation of banking.The migration of banking services to the cloud allows small and medium size banks to gain competitive advantage by scaling services based on customer need, paying only for use. Cloud computing security concerns has delayed the migration of financial services to this new environment.

The advent of private clouds and increased security measures in recent years has provided confidence in the ability of clouds to provide service while limited risks. This computing architecture allows for not only the unlimited storage of information, but the ability for businesses to scale services as required.

SignalsScale Me!

Cloud computing provides an infrastructure that enables businesses to expand or contract services based on consumer demand. This new business model allows for unparalleled flexibility.

The Mobility of Choice

Mobile services through cloud provides services for customers that could not previously be delivered. Cloud infrastructure is key to the evolution mobile technology and payment mechanisms.

Safety in the Clouds

Banking has long been concerned with security for cloud computing. The advent of private clouds has decreased security concerns, paving the way for financial services to benefit from this new architecture.

Implications(+) Creates new level of service possibilities for financial institutions

IMPACT: Ability for industry to adapt to current economic climate

(+) Ability to manage growth in mobile industry and rate of device innovation

IMPACT: Banking industry provides access to wider range of devices, increasing marketability

(+) Ability to adhere to standards and regulations imposed for global banking

IMPACT: Cost reduction and high level of service, increased consumer trust

(-) Risk of security breaches and identity theft; increased cyber attacks on networks; less legal protection in event of breach; lack of development standards

technology trends

Get Your Head Into The Clouds


7Appendix

Get Your Head Into The Clouds [2]

technology trends

Counter TrendGrowth of P2P Networks, Mesh Networks, and the Nature of the Internet

Cloud computing increases centralization running counter to the idea of sharing in a real sense; Monitoring of cloud hubs and potential for surveillance may have implications for consumer privacy. (O’Brien, 2010)

IMPACT: Increase costs of infrastructure, loss of consumer confidence

(-) Lack of development standards for cloud environments; insufficient track record limits adoption by financial services providers

IMPACT: Additional development costs passed on to users


(+) Access to services increases; The PC is dead, mobile devices and kiosk style access delivers application on demand.

(-) Centralization of customer data leads to massive security breach; Security measures provide government access to anticipate cyber breaches, curtailing civil liberties.


(+) Micro, nano and biotechnical devices interface seamlessly with massive, cloud-based data store, virtually eliminating

(-) Infrastructure growth is exponential; cannot keep up with data accumulation; energy consumption and carbon emissions rapidly increase, contributing to environment degradation; artificial intelligence used to anticipate consumer patterns of usage, questions of personal privacy erode consumer confidence.


7Appendix

There is an epidemic of Cyber Crime, coordinated and sophisticated driven by highly coordinated teams. This is Organized Crime 2.0 and it is costing billions from theft, infrastructure and security, and threatens client privacy, eroding consumer confidence. It is serious enough to threaten the very nature and independence of the Internet itself.The growth of cyber crime has been unprecedented over the past 5 years, but there is a new flavour to this phenomenon. Gone is the notion of a 16 year old geek sitting in his basement hacking into a government website to show it can be done. The new breed of cyber crime is coordinated through organized crime networks, leveraging assets to invest in a infrastructure to put private and public information networks at risk..

The growth of cyber crime incurs great cost for stakeholders, estimated in the billions of dollars through theft of actual assets, replacement of stolen assets, infrastructure and security, and prosecution of offenders. 80% of all banking assets that are stolen are accounted for after the fact. There is no easy solution to remedy the problem. The weak link now being targeted is the customer.

SignalsEveryone is at Risk

Cyber crime isn’t just for those naive newbies to the internet. Upwards of 65% of all adults have experiences cyber crime. Even a former director of the FBI has fallen victim.

“It looked pretty legitimate,” Mueller said Wednesday in a speech at San Francisco’s Commonwealth Club. “They had mimicked the e-mails that the bank would ordinarily send out to its customers; they’d mimicked them very well.” (McMillian, 2009)

Canada may become new hub of cyber crime

Cyber crime looks for legitimacy from the location of hosting servers. Canada is now becoming an attractive location for organized crime to centralize its operations.

Financial subversion suspected in 2008 economic crash

Indications of financial subversion in 2008 created conditions contributing to the economic crash.

Implications(+) Global issue creates global response, new standards / policing

IMPACT: Reliability and enforcement, increased security for CAN

(+) Financial services rely on high-tech sector to develop long-term solutions

IMPACT: CAN high-tech expertise supplies in demand

technology trends

Uh Oh, I Think I’ve Virtually Caught Something


7Appendix

Uh Oh, I Think I’ve Virtually Caught Something [2]


(+) New infrastructure for internet relies on artificial intelligence, biologic based networking infrastructure providing

(-) Centralization of all personal, financial data erodes personal liberties and privacy; online purchasing fails; reliance on cash economy re-established; rise of cyber criminal overlords, establishing illegal quasi-nation states.

Counter TrendConsumer Online Purchases on the Rise

Regardless of the threat of cyber crime and identity theft, consumers are continuing to purchase more and more goods online and via mobile devices.

(+) Consumer awareness and education is key to solving problems

IMPACT: Consumer confidence in online purchasing maintained

(-) High cost to industry and inability to combat threats increase industry tension

IMPACT: Consumer confidence and government costs spiral upwards

(-) Organized crime maintain systems circumventing regulation and policing; increasing ability to gain access to assets, information, identities.

IMPACT: Financial services costs; customer backlash; regulations, infrastructure costs increase

(-) Innovation slowdown due to need for high-level security measures; Industry implements additional costs to recoup expense for infrastructure.

IMPACT: Technology sector impact, Customer dissatisfaction


(+) New application development standards are set in place; International policing and global task forces introduced.

(-) Consumer confidence is shaken, issues of online service impact economic drivers; Identity theft is rampant, costing government


7Appendix

In less than a decade, some cor-porations (like RIM) are posting record profits then record loss-es. Personal and governmental debt is rising to record levels. International currency values fluctuate rapidly. Recessions happen more frequently (1990, 2001/02, 2008, 2011?) (Market Recoveries After Recessions). It is becoming increasingly more difficult to forecast and prepare financially for the future.

SignalsThere is a possibility of another recession due to the decline in the United States economy, the European financial crisis and the repetitive contraction in the Canadian economy for the past 2 quarters. (The Canadian Press, CTV.ca, September 13, 2011) The Canadian GDP rate has been in a slow but constant decline since 1987. In 2009 it dipped below zero percent. From 2000 to 2010, the Canadian dollar has been below, on par, and above the US dollar; the Euro has both peaked and dropped and the value of the mighty British pound has recently dropped. There have also been dramatic daily peaks and drops in the stock market (Rempel, Ed).

Implications

($) Financial plans and investments require constant monitoring and adjustments. Long term forecasting is practically impossible.

(E) It is more difficult for organizations and corporations to plan future courses of action: should they invest or divest in resources or increase reserve funds?

(C) Individuals are also unable to plan ahead. How can they invest in RRSPs, Mutual Funds, the stock market, in a home or a car if they are uncertain of their future?


(+) New financial regulations are introduced. The climate begins to stabilize. Economy regains strength.

(-) Investors no longer consider intangibles (hedge funds, stock, etc.). Instead, they look for more tangible and conservative investment opportunities.


(+) Financial climate re-stabilizes. Economy regains strength.

(-) Investors choose to invest locally in natural resources and real estate.

economic trends

Financial Climate Chaos


7Appendixeconomic trends

Financial Climate Chaos [2]

Counter TrendCanadian Economic Stability

Canada’s economy has thrived during the past 3 years whereas the economy of the western world has declined or collapsed. Will this trend continue? Analysts fear that it is only a matter of time before Canada’s economy is affected by the situation in Europe and the United States. (Shmuel, John)


7Appendix

Symbiosis of Financial Institution and Telco

economic trends

ImplicationsThere will be increasingly tight-knit partnerships between financial institutions, telecommunications companies, and potentially software/hardware manufacturers. There may be attempts to acquire each other, but the government may interfere to minimize anti-competitive strategies from the dominant companies.

Extrapolation 10 to 20 Year Extrapolation

Healthy competition and tension in the marketplace between companies will continue to improve the services and experiences created for customers

Counter TrendRogers recently applied to open their own bank. In Europe, Virgin has opened a bank of its own. [1]

Trust, accuracy, and credibility have been the cornerstones of financial services. Telecommunications companies have built infrastructure for reliable networks. For mobile financial services to excel, telecommunications companies will need to partner with financial institutions to offset track records of billing inaccuracies. For financial institutions to survive, they will need access to clients through telecommunications networks.

Signals• Both industries are investing heavily into NFC

technology (MasterCard Paypass terminal infrastructure, ISIS joint venture, etc.) [1]

• Verizon, Amex, Rogers co-investment in mobile payment platform called Payfone[2]



All In All There’s Another Brick In The …

The BRIC nations, referencing Brazil, Russia, China and India, have emerged as major players in the global economy. They have coordinated politically on the UN security council, represent 42% of the worlds population and control 25% of the global economy. There is some question about Russia’s position as a BRIC nation, even with it’s vast resource holdings. Political corruption and questions about the strength of Russia’s economy, as a developed nation experiencing re-emergence. South Africa’s role in the BRIC Summit 2010 as well as the impressive growth of Indonesia’s economy illustrate the likelihood of other potential suitors to the BRIC power block.

Alignment of the BRIC nations has been stable when issues serve in the best interests, however, there is speculation that those ties are tenuous when stressed under unfavorable geopolitical issues.

SignalsWeakening of Russia as economic power

There is mistrust of Russia’s ability to manage it economic future, citing government policy decisions, lack of democratic process and level of corruption in multiple sectors.

“Russia’s inability to develop into a mature economy has prompted investors to call for the country’s removal from the BRIC group.” (Farzad, 2011)

Emergence of South Africa, Indonesia and the Next 11

South Africa’s alignment with the BRIC shows a willingness to entertain South Africa’s position as broker / gateway for Africa. South Africa main

Implications(+) Cheap skilled labour and low-cost manufacturing supplied by BRIC+ nations

IMPACT: Labour / Resource availability to CAN

(+) Demand for capital and high-tech knowledge in BRIC+ nations

IMPACT: Labour supplied to BRIC+

(+) Bilateral agreements and expansion of free trade fosters growth; demand for products by growing middle-class

IMPACT: Market expansion to BRIC+ nations, open to CAN

(-) BRIC+ nations supply of highly skilled labour and low-cost manufacturing reduces CAN ability to compete in global market.

IMPACT: Labour / Resource availability to CAN

(-) BRIC+ nations are natural resources rich; alliances could further reduce ability for Canada to export to international markets

IMPACT: Reduce market share for CAN



All In All There’s Another Brick In The … [2]

Counter TrendDon’t Count Out the West

The USA still has the world’s largest economy. The West’s geopolitical position and ability to reinvent itself may mean it could mitigate the influence of the BRIC nations.

(-) China, India already growing player in high-tech industry, new player increased competitive advantage in global market.

IMPACT: Reduce market share for CAN

Extrapolatiion10 Year Extrapolation

(+) BRIC+ growing middle class creates demand for Canadian goods and services.

(-) Shift in the world’s economy impacts CAN high-tech industry, creating economic downturn; Canada loses place in G8 G20; high


(+) BRIC+ implement massive environment protection policy due to population, industry pressures; measures adopted globally

(-) Yuan becomes international currency; Take over of IMF, World Bank; West economies flounder; BRIC+ supplants US, EU and financial hub.


7Appendix

For the individual, the prevalence of credit card reward points, retail points and dollars have fragmented the definition of currency and is impacting is overall perceived value. In South Africa, Ebucks has become a dominant non-government backed currency and is used for multiple household purchases. In North America, the closest comparison is airmile points and credit card rewards. The usage of these emerging currencies create exclusivity in a traditionally inclusive market. This can lead to a rise of a select retail/distribution outlets that can control the exchanges of points for goods. From a broader system’s perspective, government-back currency is not immune to discussions around change.

There have been global conversations about evolving from a US dollar measured economy to more of a combined or global currency platform that alleviates the pressures associated with tying other global reserves to one currency.

Signals78% of credit card holders have rewards points cards with an average value of $500+. This is greater than the average bank account balance in the US.

China, the 2nd largest economy, has been trying to petition for a global currency by which to evaluate trade. This would be a unit untied to the US dollar. Multiple options have been suggested, for example a dollar consistency of 3 nations i.e. Euro, Yen, US dollar.

ImplicationsWhat appears to be taking place is a move to deregulation of existing currency norms. This can lead to a greater open market for trade and for consumers. What needs to be considered is to what degree does deregulation impact assigning value to the exchange. By changing the yardsticks, the scope of measurement and accountability could lead to inflation or deflation therefore rendering the value of currency null-in void.


Amazon and Google merge to create a global loyalty program. 10% of all household purchased through ‘Mazoogle’ bucks.

economic trends

Paying In Points



Paying In Points [2]


The euro remains in-tact but the US dollar as the benchmark for global trade is no longer being used. BRIC nations have established their own global currency for international trade valuations.

Counter TrendsThe US dollar regains its strength and is a desirable bench mark again.

There is a significant security breath with the ‘reward points’ which creates a considerable dip in confidence. All points are whipped out and all information lost.bucks has become a dominant non-government backed currency and is used for multiple household purchases.

In North America, the closest comparison is airmile points and credit card rewards. The usage of these emerging currencies creates exclusivity in a traditionally inclusive market. This can lead to a rise of select retail/distribution outlets that can control the exchanges of points for goods.

From a broader system’s perspective, government-back currency is not immune to discussions around change. There have been global conversations about evolving from a US dollar measured economy to more of a combined or global currency platform that alleviates the pressures associated with tying other global reserves to one currency.


7Appendix

A healthy economic growth rate is based on a series of metrics, but an average rate of growth is approximately 3-4% a year. Over the past several years there has been a declining economic growth rate in the US of approximately 1.2%, half of an anticipated growth rate which was the tipping point to a global recession.An index of human well-being and environmental impact, moves beyond rating nations according to national income, measured by Gross Domestic Product (GDP) to produce a more accurate picture of the progress of nations based on the amount of the Earth’s resources they use, and the length and happiness of people’s lives.

By measuring other indicators of wealth, a more holistic picture of viability and reliability emerges. These new metrics present an alternative way to look at partnership viability and long term sustainability as a commerce partner. In the absence of measuring money that doesn’t exist, measuring the intangibles and their influence on tangibles could be the new metric.

SignalsPresident of France, Nicolas Sarkozy, announced in 2009 that he will be including additional measures well being and sustainability as indicators of growth.

US growth rates (GDP) have been revised-down over consecutive quarters (prolonged recession) the federal reserves are depleting with limited ability to regain their original balance.

The investment community has moved towards environmentally sustainable investments that perform better relative to their non-corporately responsible counter parts because of the rigor in which they were developed.

There is a lack of trust for banks. People are more likely to trust their peer network’s perception and value of the economy than a bank’s evaluation.

ImplicationsThe implementation of a new ‘Gross Happiness Product–like” measure as parallel or preference metric of GDP would have an impact on reporting and systems of measurement. Indicators would need to be re-imagined in order to ensure consistency and comparability. This could result in the emergence of a new social currency would emerge globally. Traditional currency evaluation would be tied to less consistently measured socially derived values. There would be an overall value shift towards society and individual wellness – this may or may not be aligned nationally, let alone globally.

No’ Mo’ Money Grow

ecological trends


7Appendixecological trends

No’ Mo’ Money Grow [2]

Counter TrendsThis trend could stop in its tracks if there is no interest in evolving the idea of growth as BRIC nations emerge as economic powerhouses and maintain the stands of economic prosperity as set by Europe and US. Alternatively, there is a natural disaster that reverses Global Warming, or technology exists to purify all contaminated water thereby increasing crop out put and the health of many 3rd world nations, this would make increasing ‘wellness’ as not a priority because its already been achieved.


Environmental and economic impact is measured in tandem for several investment funds. Carbon footprint measurements are taken into consideration as part of the pricing structure for all financial transactions. Similar to ‘nutrition’ labels there are ‘carbon’ measures that are to be paid for as part of the product price. We are slowly moving to a world of ‘off-set’ payments and behavior rewarding financial systems.


All nations are measured on a viability index that outlines propensity for good partnership, good health and long term sustainment. All publicly traded companies are legislated by their share holders to include this type of metric as part of their share holder price forecasting.


7Appendixpolitical trends

I owe, I owe

The increase in debt is occurring both at the home and the government level with no repayment plan in place. Not only is the amount of debt increasing but the debt growth percentage rate is as well. The ratio of credit market debt to personal disposable income now stands at 148.7%. Canada’s overall debt is over $500 billion and increasing each minute. (Menon, Nirmala, wsj.com, September 13, 2011)

Signals

Credit market debt at the personal, local and national level increases each year. (CBC News, “Canadian debt levels keep rising”, cbc.ca, Sepember 13, 2011)

Implications

($) Financial institutions see increases in revenue due to the interest collected on loans. Unfortunately, they also suffer from an increase in loan defaults. Lower rates of disposable income decrease demand for financial product and services.

(E) Enterprises see a decrease in sales, an increase in taxes, and a reduced access to credit.

(C) Taxes are increased, government social services are reduced, and it is more difficult to access credit for large purchases. An increase in lending interest rates will also greatly reduce disposable income.


(+) Debt reduction is top of the government’s list. A plan is in place to redesign processes and services so that they are not only sustainable and eco-friendly but cost-effective. New credit regulations are proposed.

(-) Canadians’ quality of life drops dramatically. Roughly three quarters of Canadian income is used to pay taxes and make debt repayments.


(+) New government policies and regulations are in place. They balance both the needs of the financial institution and the consumer. Both government and household budgets are balanced. Credit is still accessible but comes with repayable interest loans and repayment plans.

(-) Some banks are more powerful than government. Government has more and more control of household spending. The tides have changed and Canadians now live long recessions with small patches of economic growth.


7Appendixpolitical trends

I owe, I owe [2]

Counter TrendsDebt forgiveness

After an earthquake devastated Haiti, 1.2 billion dollars of their debt was forgiven by 7 countries and international lending bodies. (BBC News, G7) Zimbabwe’s slate was also wiped cleaned after it abandoned the Zimbabwe Dollar as its local currency. Now there is much debate over debt forgiveness for Greece. Could this trend trickle down? (Field, Alf)

Help me get out of here

The rate of employees seeking debt and credit counseling from Employee Assistance Programs has risen 10%. Canadians are seeking help to get out of debt. Could they be changing their ways? (Smolkin, Sheryl)


7Appendix

Whether by choice or by necessity, Canadians are embracing debt as a means to finance their lives. The debt level keeps rising yet consumer spending keeps increasing. Now more than half of retirees spend or will spend their twilight years in debt, the brunt of which is their mortgage.

SignalsThe percentage of Canadians 55 and older retiring with debt is increasing year over year. (Marshall, Katherine) The credit market debt has been on a steady incline since 1990. (Menon, Nirmala)

Implications ($) This trend insures continued revenue for financial institutions from the interest on credit cards, loans and lines of credit. However, there might be a potentially large increase in loan defaults.

(E) There is a dramatic increase in seniors in the workforce. There is an increase in absenteeism due to personal financial stress. If enterprises offer consumer credit, there is an increase in loan defaults. Consumers have less disposable income resulting in reduced sales.

(C) Many Canadians are forced to default on their loans and declare bankruptcy. Personal bankruptcy is seen as a by-product of modern life. Consumers get mortgages without ever planning on paying them fully. In order to avoid long term dept, young Canadians opt to rent or lease instead of own.


(+) Governments and/or banks impose credit restrictions. Citizens look to Bixi bikes and Auto-Share for alternative ownership models.

(-) More and more Canadians find themselves downsizing, defaulting on loans or declaring bankruptcy. Consumer spending dramatically decreases, greatly impacting the economy and government services. In large numbers, seniors turn to social government housing increasing costs and therefore taxes.


(+) Canadians jointly own housing and transportation vehicles. The housing cooperative model is redesigned and widely adopted. Banks become real-estate landlords and offer long-term leases to their customers.

(-) Canadians rent small houses or apartments and live with multiple family members and friends. Slums increase in size and number. Jobs are scarce and there is little career advancement. The gap between the rich and the poor increases. The economy stabilizes but performs well below the international market. Government is unable to fulfill the demands of a large senior population.

values trends

Forever in debt


7Appendixvalues trends

Forever in debt [2]

Counter TrendDownsizing

Aging boomers are downsizing by getting rid of their single homes and purchasing small condos in retirement complexes, decreasing if not eradicating mortgage debt. (Marr, Garry)

References

7Appendix


Androsch, Hannes. (July 26, 2011): “Debt Forgiveness is Unavoidable in Euro Crisis:” Hannes Androsch, Bloomberg, Retrieved from http://www.bloomberg.com/news/2011-07-26/debt-forgiveness-is-unavoidable-in-euro-crisis-hannes-androsch.html

BankAtlantic. (2011): BankAtlantic Comprehensive Mobile Solutions. Retrieved September 25, 2011, from https://www.bankatlantic.com/Mobile/

Barhat, Vikram. (August 17, 2011): “Boomers will retire in debt,” Benefitscanada.com, Retrieved from http://www.benefitscanada.com/news/boomers-will-retire-in-debt-19730

Barhat, Vikram. (September 13, 2011): “Economists bet on recession forecast,” Advisor.ca, Retrieved from http://www.advisor.ca/news/economic/economists-bet-on-recession-forecast-57497

BBC News. (February 7, 2010): “G7 nations pledge debt relief for quake-hit Haiti,” Retrieved from http://news.bbc.co.uk/2/hi/americas/8502567.stm

Beltrame, Julian. September 15, 2011): “Canada to avoid slump for now:” OECD, Investment Executive, Retrieved from http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=59648&cat=148&IdSection=148&PageMem=&nbNews=&IdPub=

Brown, J., Rawlinson, K. (August 25, 2011): “Social-networking sites resist calls to restrict use during unrest,” Retrieved September 14, 2011 from The Independent website: http://www.independent.co.uk/news/uk/crime/socialnetworking-sites-resist-calls-to-restrict-use-during-unrest-2343388.html

Bundle Corporation. (2011): “Bundle: The No. 1 Source for How People Spend and Save Money” — Personal Finance Data, Money Advice, Trends, News and Community. Retrieved September 25, 2011 from http://www.bundle.com/

Canadian Press. (September 13, 2011): “Scotiabank warns of technical recession,” Benefitscanada.com

CBC News. (June 30, 2011): “Greek Debt | The global threat of Greece’s tangled web of debt,” Retrieved from: http://www.cbc.ca/news/world/story/2011/06/30/f-why-greece-cant-fail.html

CBC News. September 13, 2011): “Canadian debt levels keep rising,” Retrieved from http://www.cbc.ca/news/business/story/2011/09/13/debt-income-statistics-canada.html

CBC News. (June 2, 2011): “One in five Canadians owns a smartphone: report” — Business - CBC News, Retrieved November 27, 2011 from http://www.cbc.ca/news/business/story/2011/06/02/technology-comscore-smartphone.html

Chevreau, Jonathan. (September 13, 2011): “Canadians might be heading into a recession with record debt,” Retrieved from Financial Post: http://business.financialpost.com/2011/09/13/canadians-might-be-heading-into-a-recession-with-record-debt/

Chung, Emily. (May 11, 2011): “Canada a favourite for cybercrime” – Technology & Science – CBC News, Retrieved November 27, 2011 from http://www.cbc.ca/news/technology/story/2011/05/10/technology-cybercrime-canada-websense.html

7Appendix


References [2]

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7Appendix


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7Appendix


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Artwork References

The Future of Finance in 2022 - Blais, Chow, Mills, Norman

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