The Rise Of Technosocialism And Its Impact On Banking


In the financial services industry, Brett King is well-known as the author of the seminal book Bank 2.0, the creator of the Breaking Banks podcast, and the founder and former CEO of challenger bank Moven.

In a new book, The Rise of Technosocialism, King (with co-author Richard Petty) expands his lens to lay out a vision for how technology will change—and radically improve—society as a whole.

The authors take pains, however, to clarify their use of the word “socialism” in the title of their book. According to King:

“Technosocialism isn’t a political movement, it’s a social outcome. It resets long-term economic growth within a framework that doesn’t harm the economy but allows big government capability—with strong investment in technology infrastructure that improves government productivity—eliminating the funding and budgetary objections that government programs typically face.”

King sees four potential outcomes for the planet in the foreseeable future, determined by whether we have a planned or chaotic future and whether or not society is inclusive and collective or exclusionary and divided.

There are a few issues here, however:

  • The political/social divide is artificial. The claim that technosocialism isn’t a political outcome but, instead, a social outcome, doesn’t hold water. Everything is politics today. Take, for example, the cryptocurrency company CEO who attempted to ban political messages on the company’s message board. Even opinions related to how to deal with the pandemics falls, to a large extent, along political lines.
  • The outcomes aren’t all or nothing. Positing four potential outcomes for the planet overlooks the reality that we can have—and have had—all four outcomes exist simultaneously, to a certain extent. China is a good example: Highly automated (a trait of the Technosocialism quadrant) but general autocratic rule (a trait of the Failedistan quadrant).
  • The label doesn’t guarantee the outcome. Describing a desired state—i.e., equality, prosperity, and technology ubiquity—as the foregone result of technosocialism is baseless. How many “planned economies” have thrived and prospered? None. And with different opinions on where we should be going and how to get there, it seems probable that there will always be a segment of the population who feel excluded and believe society is divided. You can’t simply just wish that away with technology.

Technosocialism’s Impact of Financial Services

These “issues” don’t detract from the overall quality of the book, however, which is a tour de force describing the technology trends that are shaping society today and will do so for the next 20 years.

This being the Fintech Snark Tank blog, however, I’ll focus on technosocialism’s impact on the financial services industry. King sees that impact manifesting itself in a number of areas including decentralized finance (DeFi) and digital currencies.

Decentralized Finance

According to King:

“The DeFi ecosystem has the potential to revolutionize most aspects of the financial system, including the way debt is issued and managed. The innovation being driven by DeFi is creating a more transparent and trusted financial ecosystem.”

The trust aspect is what’s most important here. In traditional finance, trust comes from a centralized force (i.e., the government) with the power to create and enforce rules and regulations. Where will that trust come from in the world of technosocialism and decentralized finance?

King says it’s technology itself that creates and sustains trust:

“Utility builds trust. Trust comes from the quality of automation, and enables a shift from regulation to automation. This shift will happen over the next 15 to 18 years.”

DeFi giving rise to new financial instruments such as flash loans, non-fungible tokens (NFTs), stable coins, and atomic swaps.

NFTs have received a lot of attention this year with the high-profile sale of some NFTs (my favorite being the Macallan cask NFT sold for $2.3 million). In the context of technosocialism, the rise of NFTs is significant to changing the economy—and financial services—by:

  • Creating a path to better digital ownership. Technosocialism puts a focus on digital assets and communicates that they have value, are tradable, are secure, and have scale potential and application.
  • Protecting intellectual property. NFTs will help ensure that artists get paid fully and properly for their work through smart contracts, and help them profit as the asset appreciates over time.

Digital Currencies

According to King, robots, self-driving cars, drones, and other forms of automation will emerge with their own cryptocurrencies, and economic activity connected to them. To conduct economic activity, these technology constructs will have their own bank accounts, in effect, creating “operational cryptocurrencies.”

With the potential creation of central bank digital currencies (CBDCs), could these bank accounts be held directly with the Federal Reserve Bank, and bypass today’s financial institutions?

King sees that as a possibility but believes that CBDCs are more about creating trading platforms and powering certain sectors of the economy—for example, manufacturing and production facilities—than for everyday retail commerce.

It’s About Social Issues, Not Socialism

Ultimately, The Rise of Technosocialism is about addressing social issues with technology—not about creating a socialist political and economic structure. As King writes:

“The greatest social issues of our time—education, healthcare, financial inclusion, and homelessness—have technical and strategic solutions that are likely to decrease the cost of providing those basic needs to our citizens over the next two decades.”

For better or worse, the fate of the financial services industry is now entwined with the developments of these social issues. Industry execs must understand how the rise—or failure—of technosocialism will impact their organizations.


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