Dennis Howlett, Blogger at ZDNet elaborates on his curmudgeonly views on social media and how it can help the Finance & Banking sector. Read about how a silent movie opens up a valve for frustrated phone subscribers and why it is sometimes better to leave old baggage behind. Dennis will be the online moderator at SOMESSO Zurich.
**According to Wikipedia – the online encyclopedia – a curmudgeon is an ill-tempered (and frequently old) person full of stubborn ideas or opinions. **
I’m a skeptic, cynic and 1st order curmudgeon who plays for the buy side in the dance we software people call the buy-sell relationship. What that means in the real world is that if you want me to buy your bill of goods, it had better come with a genuine value proposition I can parse to something resembling an ROI at a price I want to pay. That’s the bad news. The good news is that if you can convince me you’ve got a solution that makes sense then I’m likely to back it to the hilt. It also means I’m not always going to be first up to adopt a technology even though I love shiny new toys.
This ‘social media’ thing has me at my most paranoid. On the one hand the notion of anything ‘social’ being put into the enterprise is anathema to my accounting background and my education as a social psychologist. People are there to work goddammit and there’s no way I’m having them waste time on blogs, Facebook, Twitter and all the other ‘stuff’ that Silicon Valley wants to throw over the consumer wall into the enterprise space. On the other hand, I’m an incorrigible Twitterer, having penned more than 28,000 tweets in less than 3 years, write about 1,000 blog posts a year (that’s just on my personal weblog), have uploaded more than 100 videos and keep finding myself sucked back into Facebook. Why? Because it’s what I do for a living. Research and information gathering are the lifeblood of the things about which I opine so it is natural that I should want to go to the most immediately accessible sources available. It is those social sources I find the most valuable, interesting and…dare I say it? Fun. At my age, fun is a good thing to have in your working life. So what about the world of financial services?
The consumer side of the banking house has threats and challenges. Disruptive services like Mint in the US and Fidor in Germany are changing what it means to manage personal finance. Then there are the fringe finance operations like Kiva.org. Not really a financial service as such but Kiva is providing an innovative way of channeling loans to people who would otherwise be denied access. My sense is that the mainstream consumer banks, after years of playing lip service to the notion of ‘customer relationship’ are about to get a wake up call. The new forms of socialized financial services represent a highly disruptive force that presents threats the more traditional players will struggle to overcome. The new services cut across the layers of banking decision makers, directly connecting people with people. In the process, they are changing the reputation dynamic. They put the mainstream players at risk.
Do you really want to find out that 1,000 people think that your ATM charges suck and are prepared to plaster that around the Internet? Yet that is what is likely to happen in time to come. As a foretaste, check this appallingly filmed 30 second video I shot called ‘Telefonica sux.’ It’s the 1st item on a Google search with that term. It’s been viewed more than 5,000 times and even though I’m not a native Spanish speaker (in fact I don’t say a thing on the video) there are plenty of comments from those who do and share that same sentiment. As more people, and especially the younger generation take up social tools, they will not be afraid of speaking their minds. And it won’t be pretty. The question then comes – what should the financial services industry response look like? Of course you’re thinking ‘Oh, that’s telco, everyone hates them.’ Guess what, banks don’t do much better. Just as I was completing this post a Tweet floated past my screen:
andrehau My F$%** bank has blocked both my cards due to too many foreign transactions *argh* no money and am at torronto airport 
#Nationwide UK
One in the eye for Nationwide. I rest my case.
In all the social media hoopla, you’d think that the best thing to do is use these tools to promote services. I think that’s a bad idea. At least from the get go. While it may be tempting to Tweet your latest offer, or build a community of enthusiasts, a tight regulatory environment and a culture of avoiding risk suggest otherwise. The Mint’s and Fidor’s can get away with it because they don’t have the cultural baggage of the past. They’re starting with a clean slate and coming at the customer issue directly from the peer-to-peer perspective with no institution standing in the middle.
Where I think financial services could benefit most in the short term is around the internal organizations and the processes they operate. Here I am in agreement with Oliver Marks and his thoughts on social business design. How many times have we seen for instance inappropriate up selling of financial services to unwitting customers. If the internal processes allowed for the capture and sharing of of tacit client information then you have the start of a discovery process that might avoid those issues. Or what about the disconnect between front and back offices in what we used to call ‘merchant banking’ operations? There are many issues here that played directly into the financial meltdown as complex trades became ever more opaque. I’m not suggesting for one moment that social tools could have prevented the meltdown. I do however suggest that a more open sharing of information might, when combined with appropriate risk tools, help avoid the next catastrophe.
Does all this mean you should be slamming in a social network right now? Maybe but unlikely. Instead, I would be thinking about the pain points the business needs to address and then assess whether social tools are the right way to go as a part of integrated business processes. In other words, I’ve never heard anyone say to me: ‘Can I please have some social media?’ though I’ve heard plenty talk about problem solving. There are many ways to do this and right now I’d argue there is no such thing as nailed down best practices. There are some decent guidelines to be found but from what I have seen, each case has to stand on its merits.
Your point of view?