From long-term savings to instant mortgages: financial demonstration and the role of interaction in markets

Abstract

Accounts of the crisis have privileged 'high finance' innovations whereas retail banks constantly experimented with how they sell (new) products to consumers. I examine the case of product innovation at a home savings bank in Hungary during the pre-crisis credit boom. Turned from offering state-subsidized long-term savings-and-loans to promoting instant mortgages. Based on ethnographic observations of the bank's Direct Selling Organization, I trace the bank's shift from state-subsidized long-term savings-and-loans to instant mortgages, to problems with demonstrating the qualities of financial products, even ostensibly prudent ones. Drawing on concepts of scientific demonstration and proof, I compare how financial advisors explained the plan to consumers before and after it was combined with mortgages: first they drew the funds by hand, later they adopted software-generated scenarios. I suggest that as sellers perform products interactively with clients, consumers' needs appear. Thus, when organized differently, financial demonstrations yield different consumers-with-preferences. Based on this interactional perspective, I find that consumer finance is an 'economy of qualities' where preferences and product properties stabilize through consultation, and where "social" embedding can enable "economic" calculations. Based on this interactional perspective, I examine US and UK proposals for consumer financial protection.A theater of proof, like the ordinary theater, needs all its accessories. (Latour 1988: 93) Organization 18(2) 215-235

The Financialization of Everyday life or the Domestication of Finance?

“…The market mediators who effectively interacted with consumers performed product demonstrations to 'show how it works'. These calculations aimed to forge a match between the available financial products and people's needs, which the mediators helped articulate in concrete technicalfinancial terms (see also Vargha 2011). …”

“…Second, as Deville's (2012Deville's ( , 2014) study on debt collection highlights, when shifts in everyday subjectivities do take place, it does not happen through the conscious adoption of a more rational (and risk-aware) outlook, but largely through embodied, partly emotional, partly rational processes through which anxiety over debt is experienced and acted upon. Similarly, others (Araujo et al 2010, Vargha 2011, Deville 2014, McFall 2014 have questioned the dichotomy of cold calculation and warm consumer world, showing that relationship and affect have become strategies of financial firms to generate (re)-attachment.…”

Consumer credit default and collections: the shifting ontologies of market attachment

“…A contrast would be a company operating with more established defaulters, where the creditor (whether the debtor knows it or not) effectively decides that the chance of a full repayment is slight, with the primary aim becoming instead to collect smaller ongoing repayments, of the kind Sarah mentions at the end of the call (this was the case in another of the agencies I visited). In both models, however, the aim-as Zsuzsanna Vargha (2011) illustrates in the analogous conversations that can accompany the selling credit-is to stabilise both the particular product's properties and the customer. In this case, Tom's aim is to solidify and intensify the attachments that bind Sarah to this particular product, and to individualise this debt in relation to the competition, by making it not just part of the undifferentiated 'debt' which combine to form part of the background of her life, but a product that resonates strongly in the present, needs to be acted on immediately -or, more precisely, at least by 5pm Wednesday, or otherwise face the possibility of litigation.…”

What is a 'Real' Transaction? Infrastructures, relations and Spoofing in High-Frequency Trading

“…At the core, all transactions imply a relation, whether rooted on distinct interpersonal interactions, as in street markets and intimate exchanges (Zelizer 2009;de la Pradelle 2006), or mediated by impersonal systems such as trading screens, mobile applications, or automated point-of-sale systems (Vargha 2011). When two agents exchange, they are tied for the duration of their transaction; they are related, even if through their membership of a community of exchange (Weber 1978).…”