Trading in the Currency of Trust: An Opportunity for Banks to Enhance Economic Relevance

  • JJ Hornblass
  • November 13, 2012
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What you do online matters, and perhaps more so than what you do offline.

Why is that true? Well, what you do online lasts a long time, your actions can been quantified, sorted, aggregated, and, most importantly, scored. That’s not always the case offline.

Increasingly, the import of your online life is being viewed as a type of currency, a “currency of trust.” Bankers should be all over the new currency of trust that is developing online not just because the currency matters, but because they can profit from it.

Now, you are probably wondering, what on earth is he talking about? “Currency of trust”?

Let me explain by way of example. If you are like me, you have a strange, distant relative who sends you emails with really bad jokes. They are all, to say the least, not funny, and some border on the insensitive. (Do I really need sex jokes from a retired guy living in Florida?)  But I’m in a pickle. I can’t tell him to stop sending me the jokes, because he is a relative. Equally, I don’t read his emails. He has, in other words, long ago eroded his online trust with me.

This relative compares with another who never fails to respond to any request I make of him with a short email offering a meaningful suggestion or two. This relative has my online trust. Or, put another way, whose email do you think I open first?

Extend this concept out across the breadth of the internet (and the mobile web, too, for that matter). Who responds appropriately? Who does not? Who tweets in a meaningful manner? Who does not abuse LinkedIn groups by posting irrelevant job listings or product promotions?

Who can you trust?

There is a growing chorus of technologists who believe that this trust will outweigh other measures of trust, and will directly translate into economic wealth. They cite such examples as Airbnb, which is an online marketplace for bed-and-breakfasts. On Airbnb, hosts and locations receive reviews and references, so that lodgers can separate those that can be trusted from those that can’t. There are sites springing up that do the same for people. is just one example of that.

To bring this to banking, from a dollar standpoint, what is more important to that bed and breakfast host, his Airbnb reviews and references or his credit rating? By extension, from the perspective of a lender underwriting a loan to that B&B host, what is more important, his Airbnb reviews and references or the bed and breakfast’s Dun & Bradstreet pay performance? The answer to this question becomes less clear the more the Airbnb references and reviews predicate a B&B’s revenue.

If I’m a banker, I’m thinking about how the bank — and not Airbnb — can be the owner of this trust data. This trust data, in my view, will eventually become a cornerstone of commerce. A small business is considering working with a particular company? Forget the Better Business Bureau — that small business will look at the potential partner’s trust levels. And if that trust becomes the pivot on which economic activity hinges, much as a company’s checking account statement is something of a validation of a company’s operation, it stands to reason that banks should angle to facilitate “transactions” involving trust currency. After all, are not banks nothing more than merchants of trust anyway?

For an excellent introduction to the concept of the currency of trust, check out this video:



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JJ started the first iteration of Bank Innovation back in 2007, and has been working on it ever since. He also serves as President & Chief Executive Officer of Royal Media, Bank Innovation’s parent. He founded Royal in 1995 and oversees all aspects of the New York-based diversified media company. Prior to forming Royal, JJ was on the editorial staff of American Banker, the daily newspaper, and worked as an editor of a business magazine in Hong Kong. As a reporter and editor, he has won journalism awards from the National Press Foundation, Newsletter & Electronic Publishers Foundation, and the Reader’s Digest Foundation. He has a BS in Economics from Yeshiva University and a Master’s from the Columbia University Graduate School of Journalism. He was also a Fellow at the University of Wisconsin-Madison Graduate School of Banking. He lives in New York City with his wife, two daughters, and son. He counts among his accomplishments one New York City Marathon, two New York City Triathlons and the 2010 Father’s Day 5K, the first race he ever ran with his daughters. He can be reached at or 212-564-8972.

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