Money2020: Accelerating an Individual’s Financial Demise?

The gods of technology were not my friend yesterday.  I arrived in Vegas in the early morning to discover that my Smartphone data services were disabled:  no email, no texting, no phone service.  How ironic given that the sound bite moniker for day 1 at Money2020 could easily have been:  “How my mobile device can guarantee my financial self-destruction.”  So maybe I have someone to thank at Verizon for making sure that my mobile device had zero utility. 

What did I learn on day 1 of Money2020?  The day was all about the consumer experience.  Presenters included an eclectic mix of old world and new world names:  players such as JP Morgan, Capital One, MasterCard and Citi, who sit squarely in regulated parts of the money eco-system, and emerging players such as Google, Simple, Lending Club and Groupon, who are enabling e-commerce/e-finance that sit just outside of  a bank regulatory oversight.  Strange bedfellows are these companies, some of whom are striving to stay relevant by outsourcing or leveraging capabilities offered by the new entrants without ceding ownership of the customer. 

 So what are all of these guys really up to?  I can’t help but think of the ‘fox in the henhouse’ analogy, wherein the consumer lives in the henhouse and the fox is the emerging money eco-system that has gained entry to the house for the seemingly friendly reason to “help people with their money.”  In fact, the real purpose is to “help people to spend their money.”  When all is said and done, commerce and transaction velocity is the name of the game.  These players are focused on how to leverage mobile technology, networks, and the cloud to provide the consumer with a potent capability to make purchases anytime and anywhere.  Think of the emerging eWallet as your plastic cards (credit, debit, prepaid, loyalty) on steroids. 

What is the meaning of “wallet” in this emerging new money world?  How is it that we have taken the old world term “wallet,” which was where in a cash transaction world we kept our bank notes and the cold comfort that you couldn’t spend money that you didn’t have, to this place where the wallet and what is in it has become an abstraction?  

If you were visiting Money2020 from a neighboring galaxy you might conclude that the American consumer is endowed with a bottomless spending account and that we are all untethered from the reality of our financial circumstances.  Suze Orman, the muse of the average person, jolted the expo attendees back to reality by reminding everyone that 50MM people live in poverty and another 100M people are on the verge of poverty.  This shocking statistic means that roughly 1 out of 2 people in the US are teetering on the abyss of financial crisis.  Her not so subtle message was that the future of Money has to be about helping Americans improve their financial wellbeing.  In the rush to innovate and, through technology, blur the distinction between reality and dreams we are, in the words of Suze, “setting Americans up to fail.”