NatWest Electronic Markets, a unit of NatWest Group, has started commercial trials of Iqport, a web-based exchange designed to promote electronic trading between knowledge communities. NatWest, one of the UK’s big-four banks, says its IQPort web-based trading floor service will initially support two markets: one facilitating trade in knowledge and expertise of business methods and processes; and the second dealing in intellectual and human capital, such as training skills. The site, www.iqport.com, provides a full trading platform, technical support, and financial transaction handling in return for a commission fee charged to sellers. Other knowledge assets which the company expects to be traded include market reports, research statistics, and financial statistics.
IQPort plans to set up a number of guilds, or knowledge communities that will be responsible for asset accreditation and pricing, though individuals may also take their knowledge items to the market and sell them independently. Currently, IQPort has signed up two guilds in the UK: the World Trade organization and Business Solutions, a division of NatWest, plus two more in Scandinavia. IQPort CEO, Nick Hynes, claims the company has taken the concept to around 500 companies and prominent individuals, many of whom have agreed to participate in the marketplace, he claims. More announcements are promised with the US launch due some time over the next month.
Pricing and trading will be managed manually, and somewhat arbitrarily, by the appointed guilds, and adjusted according to demand. But Freddie McMahon, former head of IT Innovations at NatWest and now chief strategy officer at IQPort, said that when enough trading history has been collected, the company will begin electronic automation along the lines of modern exchanges.
The UK’s financial community greeted the launch with some caution. One City investment analyst said the concept was interesting, but expressed concern over, among other things, the mechanism of pricing. With commodities such as coffee, metals or even stocks, the people trading them know what they are buying. The issue with knowledge is that you don’t know exactly what you’ve bought until you’ve paid for it, he said.
