The Bankwatch

Tracking the consumer evolution of financial services

Why Banks are vulnerable in the long run, to social networking

Forrester Forum: some final thoughts following the interesting panel that I was fortunate to be part of. Host was Benjamin Ensor from Forrester in London. Participants were Ed Terpening from Wells, and Jason Knight from Wesabe.

Some key points that I took away that I will spend more time on, going forward:

social finance as a lever to provide scale: personal advice cannot be provided, one on one to the masses. By providing a forum for customers to help each other, with some employee participation, advice and guidance can be provided to everyone
why do Banks trust word of mouth of strangers, and less so, their Bank? This is a tough one. Banks suffer from providing only their own products, without comparisons to competitor products. Social networks have experts opinions, which is self policed to both root out errant views, and support correct ones
Start small, test and learn: this is the Wells experience and as the only Bank in the space [note: lots of Credit Unions, but no other Banks] they are successfully engaging in the space, learning and advancing. Ed pointed out that the Senior Executive at Wells are believers, exhibit a culture of innovation, and are very supportive.
the power of data: Jason spoke of the Wesabe data base which contains over 1/2 billion dollars in transactional data. It envelops everything their customers spend money on, so Banking is just one component, alongside insurance, gorceries, cable, telecommunications, etc. They have a holistic view of customers spending patterns

I was particularly pleased to hear Benjamin summarise at the conclusion, that Forrester believe Social Finance will alter Banking forever. I would add, that the messages are disjointed right now, but in time, we will start to see patterns, and viability. Exciting times!

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Written by Colin Henderson

June 28, 2007 at 20:49

Posted in Banking Strategy

3 Responses

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  1. You’ve put into exactly where we are, that Social Finance will alter banking forever. The outcome is not known but to be in the middle of this change right now is exciting. Wesabe’s view of transactions and what they mean to people is really a key concept that just doesn’t go away when you think about it. It is revolutionary. Just by its nature it goes beyond any individual FI.

    tinfoiling

    June 28, 2007 at 21:24

  2. I too am somewhat surprised that more US banks are taking advantage of social media. The many questions about compliance and fear about negative comments expressed by those in the audience I believe point to the reasons. Although it’s funny, all they have to do is read the comments on our blog to see what the reality could be for them. Oh well.

    BTW, there are other small regional US banks blogging. There’s one in the Michigan area, I believe. When I get back to the office, I can let you know as I know my internal blog has it listed.

    PS. I’m late to the party here because Google Alerts didn’t pick up your innovate way of spelling my name 🙂 You have an extra ‘n”, which, by the way, is closer to the original Dutch spelling of my family name.

    Ed Terpening

    June 30, 2007 at 08:44

  3. Innovation is valued for most things, but not for names 🙂 my apologies.

    Colin

    June 30, 2007 at 13:01


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