Both Jeff Jarvis and Jeremiah Owyang are discussing the merits of social, web 2.0, VRM concepts in the context of financial services. This is something very close to my heart and while the discussion has attracted some heavyweight attention from the likes of Seth Godin, I’m feeling lucky.
I’ve been convinced for some time that all financial services will be transformed to some degree by the network.
I’m not convinced by Jeff’s argument that insurance is somehow immune to the network because of the inherent fraud and mistrust in this industry. Yes it exists when both sides stand to gain so much, but in a co-operative system only one side can gain. And that person is up against a network of highly connected individuals who collectively has something to lose. Getting caught cheating the community is a much worse than losing to a corporation.
Regulations governing financial products are considered another nail in the coffin to a co-operative utopia. But, much of the regulations governing Financial Services have evolved to protect both customer and profits. How will things change in a non profit scenario where regulation are there to protect the one entity?
Even if the insurance industry will not benefit from the network inputs driving MyStarbucks, I can see Vendor Relationship Management (VRM) principals embedding into the insurance industry very easily. OK it’s not going to be ani-insurance or necessarily replace insurance companies as we know em. But enabling the customer to control their data and allowing multiple quotes from a single data feed has obvious advantages. Insurance aggregators currently fill this space, but they take their cut which doesn’t particularly help providers compete on price – one of the biggest drivers in motor insurance.
