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Why banks should focus upon Twitter

Blogging about Twitter in January and February identified it as a new, social networking focal point, due to the rapidly growing numbers of fans of their service.

Now there are many folks asking questions about Twitter, as it gains momentum.

For example, in the last few days, Paul Penrose at Finextra asks: "What’s the point Twitter?" whilst, in an article for Marketing Week, Andrew Harrison claims that Twitter is the emperor’s new clothes.

The thing is that, as demonstrated by the latter view, it is easy to pour scorn on things we don’t understand or know how to use effectively but Twitter is rapidly emerging as a major source of financial innovation and should not be ignored.

For example, were any of you the ones who thought that a mobile phone was for yuppies, a blackberry was a waste of time or wonder why anyone would want to text message?

How wrong you can be and, if you have those attitudes, you can easily miss the biggest wave of change we have ever seen in our times.

That wave of change is illustrated by every other person on the planet now having access to a mobile phone and millions of text messages being used for payments.

The thing is that many of us try to shun things we don't understand, don't like or are scared of.

But that's wrong. 

If people are embracing a new technology – and millions have chirped over to tweet lately – then it warrants understanding.

In my case, I didn't get Twitter as I'm not a mobile junkie and that's who I thought it was designed for, but I've now discovered lots of net-based tools for Twitter – such as Tweetdeck and Monitter – and it's become my essential text message service for the internet.

And sure, you get the odd person (did I say, ‘odd’?) who posts stuff like “just eaten a sandwich”, or “been to the toilet” … and they’re the ones who probably rang folks with their mobile in the 1990’s saying “I’m on the train” or “I can’t hear you, you’re breaking up”.

You see there are things that Twitter’s fantastic for and, for those who are interested in trying to keep up-to-speed with information overload, having your mates say “another bank bankruptcy” or “look at this article on social media” is really useful.

Equally, for catching customer dialogue and responding it can be terrific too, as Commonwealth Bank of Australia (CBA) found out this week when a customer posted an angry Twitter.

The client was going through a lengthy mortgage process with CBA and was fed up with the wait for final approval which might mean they’d lose their house purchase. So they twittered their frustrations and, within an hour, had a CBA customer service rep Twitter back, sort out their issue and deliver great customer satisfaction.

Now there’s service for you.

So I can’t handle these folks who rain on someone’s parade just because they don’t understand it.

Mr. Harrision's article, for example, claims Twitter has 1.2 million users worldwide and this was published in the week of 26th March 2009.  The actual number is seven million and rising.  He does qualify this to be 'active' users and, whether it's 1 or 7 million, it's enough to get attention.

After all, we probably dismissed PayPal when they had 1 million active users and today they have over 70 million.  It doesn't take long.

Bottom-line: to diss this stuff sounds like someone saying television will wipe out cinema or the internet is just for pornography and gambling.

From a financial market viewpoint, the question is whether there is opportunity to monetize and grow business through such services.

Most social media is targeted at a conversation, which creates an advisory and support service.  Talking with customers through social media makes sense, but where’s the PayPal for Facebook or Twitter?

Surprisingly, there is very little monetary activity in Facebook for example.

Maybe that’s because of excellent stand-alone social finance services, such as Mint, Wesabe, Social Picks and more, who have all made some inroads to integrating their capabilities with Facebook … or maybe Facebook's insecurities scare away any financial activities.

Regardless, the only service to gain any traction so far appears to be Spare Change.

Spare Change has 134,000 active monthly users.

Compare that with Pay Me, which has only 77 active monthly users, and you can see that capitalising on this social stuff may be hard after all.

There a couple of other interesting financial applications on Facebook, such as:

Money, a new application from Michael Moriarty that allows friends to send each cash;
Chipin, which is useful for rasiing cash for parties; and
MyMoney from
Fiserv, which is designed for credit unions to play in this space;

but, overall, the majority of financial applications on Facebook are games.

This is why we could generally claim that Facebook is for socialising and not for secure payment processing. That does not preclude advice, which is what I keep pushing financial providers to consider through such sites, but monetary transactions? Maybe not.

This may not be true for Twitter.

Although Twitter is new, there are already many financial oriented sites that are growing around it, such as TwitPay, Twollars, Twipper, Harvest, Xpenser, Tweetwhatyouspend, StockTwits and FXTwits.  

Twitmoney

These are all sites offering some form of payment or social finance service through Twitter, and I have to thank JJ Hornblass at Bank Innovation for these tips, as he has been keeping a pulse on this activity. 

Wesabe and other social finance websites are also integrating with Twitter, so they think it’s important, as do some innovative banks:

Wachovia: first Twitter post, August 18th 2008;
2,484 followers;
274 updates
Bank of America: first Twitter post, January 7th 2009;
1,598 followers;
647 updates
ING Direct: first Twitter post, February 6th 2009; 748 followers; 84 updates
ANZ: first Twittter post, March 18th 2009; 147 followers; 29 updates
Wells Fargo: first Twitter post, March 26th 2009; 346 followers; 81 updates

So the real reason Twitter is important is …

  • It’s an SMS across all platforms, mobile and internet
  • It fits with the Attention Deficit Disorder, or ADD Generation (which includes me)
  • It’s got lots of add-ons for great functionality and usuability
  • It works
  • It’s useful
  • It’s quick and easy
  • It’s good

What more could you want?

Oh, and if still not convinced, here's 10 reasons to Twitter from Dave Lee, a technology journalist for the BBC and co-editor of the BBC Internet Blog:

  1. You’ll know about stuff before everyone else does. 
  2. You can use it to find out what people think… about anything. 
  3. You can find people who like what you do. 
  4. You can use it to get help. 
  5. It can transform your career. 
  6. You can campaign for good.
  7. You can talk directly to people in power. 
  8. You can read stuff you’d never normally have found. 
  9. You can use it to save heaps of time. 
  10. MC Hammer is on there. 

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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5 comments

  1. I’ve tried to revisit a topic we “discussed” via blogs not long ago, but this kind of puts an end to that need. Great post. I wish I had written it!

  2. I’ve tried to revisit a topic we “discussed” via blogs not long ago, but this kind of puts an end to that need. Great post. I wish I had written it!

  3. Well done Chris. Twitter might just end up being very ‘bankable’. I’ve been experimenting to see how easy and safe, it is to use it for payments, if you have the right methodology, and I do. It is a very inexpensive way to communicate.
    Time for me to do something about it.
    The ‘unexpected’ crisis sure slowed things down and has clearly changed the playing field in financial services. The wind is definitely out of their sails. Who would have thought? Ha Ha. If only it was funny watching a train wreck.
    It did, however give us some time to toss down a few megalomania pills (with a fine red) and polish up our plot and capabilities.
    I’ll have less time for prognosticating and will be making fewer predictions this year but as those venture capitalists claw their way out of the rubble I’ll be there with some Red Bull. Think big.
    Best regards
    Dean

  4. Great post Chris. I just tweeted about it :>). It is great to see how some banks are incorporating Web 2.0 technology including Twitter into their marketing strategies. Right now any connection to their customers that adds a more personal feel to the interaction is a welcome one.

  5. Great post Chris. I just tweeted about it :>). It is great to see how some banks are incorporating Web 2.0 technology including Twitter into their marketing strategies. Right now any connection to their customers that adds a more personal feel to the interaction is a welcome one.

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