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Can Crowdsourcing Prevent Another Financial Meltdown?
By: Lisa Thorell
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Apparently that's what Elizabeth Warren, lead architect of the newly created Bureau of Consumer Financial Protection (BCFP), is thinking.

Formed in answer to the 2008 U.S. financial meltdown, the BCFP is tasked with building and managing a nationwide consumer complaint center that will take tips from millions of consumers on deceptive practices surrounding mortgage loans, usury credit card fees, and consumer contract agreements to reported instances of outright financial fraud. According to the National Journal’s interview with  former Harvard law professor Warren, her new bureau will be using crowdsourcing to do this.

As surely as DARPA's Red Balloon Challenge was solved in less than nine days, Warren is betting she can get consumers to participate in detecting and identifying the earliest stages of financial skullduggery.
So let's say you see some suspicious looking fine print on one of your bank statements. You simply take a photo with your smart phone camera and email it off to the BCFP fraud busters. To get an idea of how this will work, just look at the DARPA Red Balloon map in our opening image and replace each red balloon location with "Credit Card fraud detected."

But I’m oversimplifying. This will take some sophisticated software technology.

It’s no surprise that to get the new crowdsourcing system off the ground, Warren recently visited Silicon Valley, including a stop at Google. Now, Google knows quite a bit on consumer's financial queries and search results, not to mention what PPC advertisers line up, but I don't particularly regard them as crowdsourcing experts. I do hope Warren visited a few other knowledgeable West Coast sources.
 
Three great crowdsourcing companies for Warren to visit:

1.) Netflix (Los Gatos, CA) Well-known for their $1 Million Challenge to improve their  movie recommendation engine, Netflix' 2009 project exemplified one of the most brilliant executions of a crowdsourcing campaign to date. As I detailed in an earlier post, this included motivational use of leaderboards, "Last Call to Action" challenges, and multiple levels of prizes/incentives (not all of which were tangible) -- all used to instill and motivate  contributions from the crowd.

2.) Jigsaw (San Mateo, CA) Warren should speak to former CEO and Founder of Jigsaw, Jim Fowler, who sold his  crowdsourcing platform company to Salesforce.com for $147 million. As a piece in The New York Times insightfully described the technology, "What Jigsaw seems to have done successfully is to construct a market of economic self-interest that, in turn, fosters the growth of its member-contributors." This is precisely what she needs.

3.) Starbucks (Seattle, WA) To understand one of the best examples of successful community building, we hope Warren hopped a plane to Seattle. Based on the Jigsaw platform, MyStarbucksidea.com now lists as one of Starbucks' four main social media channels, with Facebook, Twitter, and YouTube. The company reports its ideas site consists of over 250,000 members who have helped to develop 98,000 new ideas for the company.

Just looking at the MyStarbuckideas.com home page should give Ms. Warren's project (MyBankFraudIdea.com?) some food for thought. There are four strategic content sections that hold much potential for both motivating contributions and growing a membership of financially oriented Inspector Clousseaus.

Four crowdsourcing mechanisms that work:

1.) Ideas so far: MyStarbucksideas lists out idea topics for several broad categories: Coffee, cold frappucinos, food and technology. In like manner, Warren's site could show "the heat map" of financial fraud activity by tallying topics such as credit cards, debit cards, insurance, mortgage loans, etc.
 


 

2. ) Most Recent Ideas: A "Most Recent Ideas" section would have both  the practical value of showcasing very early stage financial scams launched as well as the psychological value of indicating a live bustling site, reinforcing potential contributors to participate in a timely manner. It also serves as a form of advertisement  to enlist instance reporting from others who see similar problems within their own community. Great Scott, if we can do this for lattes, how motivated could people get to report information phishing scams?

 


3.) Ideas in Action: It is ideal for indicating to community members that ideas are not just sitting idle in a pile, but rather are being actively reviewed or are in the process of being implemented. This mechanism also establishes a running history or track record  to reinforce member confidence and loyalty. (Call me a mechanist, but I prefer to think these tangible mechanisms account for mystarbucksideas great participation as much as their intangible brand equity.)
 



 

 4.) Leaderboard: Why does Ms. Warren need a leaderboard? She'll be managing a team of Finance Inspector Clouseaus. As with Starbuck's latte ideas, some will find clues, others will comment on those clues (perhaps contributing ideas or asking illuminating questions). Simply put, leaderboards take advantage of our competitive human nature, positively reinforcing successful contributors and inspiring new ones.

 


Maybe the admittedly slurry term, MyBankFraudIdea.com, isn't too far fetched and outrageous. A 2010 Harris Interactive poll finds that a sizeable number (83 percent) of Americans think the banks and other financial institutions have too much power in Washington, D.C. Crowdsourcing consumer financial protection is a means of balancing some of that power in the direction of consumers.

Props to Warren for recognizing that we now have a new generation of social intelligence tools like "crowdsourcing" at our disposal to do so. This may just be the idea to pop new undetected financial red balloons floating over our nation.



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About the Author
Lisa Thorell is principal of Off the Grid Public Relations and a new Bloghessa for Talent Zoo, Lisa  tracks Internet news especially as it influences company business models. Follow her on Twitter.
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