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What is a ‘social bank’?

A long conversation about digital worlds and social banks yesterday.

I was asked what is a ‘social bank’, and had to explain two or three times to really get the point across.

That worries me, as social banking should be a simple concept.

The issue is that it gets confused with social work and social media.

Firstly therefore, a social bank is not a charity.

Second, it is not getting the bank onto Facebook or other social media.


Now that that’s out of the way, what is a ‘social bank’?

A social bank is a bank that focuses wholeheartedly upon engaging their community of customers on an equal level, peer-to-peer, in a fully interactive and immersive conversation about money that is informative, enjoyable, open, honest and transparent.

It is a complete turnaround on the way banking was done in the past, which was a single channel of communications, take it or leave it, and it is meant to reflect the change we’ve seen in society.

What is that change?

The change from olden days, where everything was tightly controlled through limited communications via a small number of TV and radio stations and print media.

Back then – we’re talking quarter of a century ago – there were extremely limited ways to be informed and it was a one-way channel of communication.

Just a decade ago, it had changed but not much.

A decade ago, you had far more channels of communication – the internet, cable and satellite television – but even then, it was limited by usage.

The key a decade ago is that if you wanted to be informed, you had to find the information.

You had to Google for it, you had to find the TV channels, you had to pay for them too.

Suddenly everything changed.

It all changed around 2002 when blogging and YouTube were emerging.

But it was a slow burn.

Then Facebook arrived and Twitter, and it exploded.

What exploded?

Human content.

Not just a few humans, but a whole world of human content as every person on the planet became a potential media channel.

Every human on the planet has the potential of generating news, views, creativity, content.

Sure, some of them may be only read by one or two friends, but the fact that we are now surrounded by content is brought home nicely by this article ( Download 3MB PDF: 'Tweet Freedom' or read online, pages 36-40) from Stylist Magazine:

“The benefits of using new communication technology– now as second nature to us as breathing – are indisputable. Tap into Twitter, Facebook, Google and wherever you are in the world – from a sun-drenched island in the Maldives to a Virgin Atlantic flight to New York – and you’re guaranteed to have your finger on the pulse of what’s going on in the lives of your friends, celebrities, and politicians. Stephen Fry shares his pictures of Sydney harbour via a TwitPic. Ashton and Demi let you know they’re having a fabulous time in St Barts on Twitter. Indeed, as a nation we’re so consumed by technology that the average multi-tasking Briton crams in eight hours and 48 minutes of media (from Twittering while internet shopping to Facebooking while downloading) into the seven hours they spend online each day.”

In other words, our influence is now generated by a random community of friends, family, colleagues and their communities of influence.

Not by traditional channels of communication.

If our friends, family and colleagues are anti-something, then often so are we.

And if our friends, family and colleagues are influenced by others who are anti-something, then that filters into our consciousness too.

And if our friends, family or colleagues happen to get something inflammatory to expose injustice, wrongdoing or other issues – such as bank's misdealings with customers – then they will share it and expose it in real-time.

And, before you know it, everyone will know it.

This potential to socially connect with almost everyone is radically altering society and the way we think, as we now demand and challenge everything.

This is part of the reason we no longer trust anyone or anything, as the Wikileaks world means that everything is open to question.

Again, this has been brought home clearly by the recent uprisings in Tunisia, Egypt, Bahrain, Libya and across the Middle East where people have finally woken up to their oppression.

From today’s Guardian:

“Who among the first evangelists of the internet foresaw this? When they gushingly described the still emerging technology as ‘transformational’, it was surely the media or information, rather than political, landscapes they had in mind. And yet now it is the hard ground of the Middle East, not just our reading habits or entertainment options, that is changing before our eyes – thanks, at least in part, to the internet.

“Take the Tunisia uprising that started it all. Those close to it insist a crucial factor was not so much the WikiLeaks revelations of presidential corruption that I mentioned here last week, but Facebook. “It was on Facebook that the now legendary Boazizi video – showing a vegetable seller burning himself to death – was posted, and on Facebook that subsequent demonstrations were organised. Who knows, if the people of Tunis one day build a Freedom Square, perhaps they'll make room for a statue of Mark Zuckerberg. If that sounds fanciful, note the Egyptian newborns named simply ‘Facebook’.”

So I said that a social bank is not based upon social media, but it is social media that has spawned the social bank. And the reason I say ‘it is not based upon social media’, is because that immediately makes everyone think I’m talking about a bank based upon just Facebook and Twitter, and that’s not what I mean.

Facebook and Twitter may be replaced by MyTime and Lifestream tomorrow (just made up those two btw), and so the social media platforms are transient.

What is here to stay is the transformation these transient platforms and technologies have created, which is the truly connected global planet of content generation by individuals.

The social planet now needs social banks.

The premise therefore is that, in the first generation internet, those businesses that relied upon people coming into stores to buy things that could now be found electronically would go out of business.

That was true.

Travel shops, book sellers, music stores and more all disappeared.

In the second generation internet, those businesses that rely upon control, secretiveness, confusion and ignorance will go out of business.

And that will be the challenge for banks where complexity of fees and charges, control of the customer’s access and secretiveness about financial movements have been the core capability of making money in the past.

That complexity, control and secretiveness has disappeared and the future way is therefore to be open, honest and transparent.

What does this mean in practice?

It means becoming a social bank.

A social bank is one that engages the customer by making discussions about money interesting, informative and fun.

They educate and illuminate, respond and converse, engage and experience customers with real interaction.

The social bank does not provide ‘statements’ and does not expect the customer to ‘check their balances’. Instead, they are really friendly as part of the community of interest of the customer.

They rank as the customer’s friend, along with their other colleagues, family and friends.

That is the community they inhabit.

How can a bank become a friend?

By being open, honest and transparent and, therefore, trusted.

Banks trade on trust, but the trust is not in the bank but in the bank’s ability to look after money securely.

The trust we are talking about here is in banks doing the right thing.

A bank will do the right thing in the future mainly because, if they do the wrong thing, they will get found out and taken down.

That is what the WikiLeaks world is about.

That is what the social network has inspired.

That is what banks of today face in their dealings with everyone and everything.

So a social bank will be immersive.

It will tell me what I can and cannot afford.

It will advise me of better deals as and when they come out.

It will show me alternative providers of financial products, and tell me why it’s not a better deal to move over there.

It will give me rewards for being loyal.

It will know every detail of my financial behaviours and transaction history, and will help me to behave better.

It will respond to my questions in real-time in the way I want.

It will educate, inform, illuminate and engage.

It will be my friend.

And, as a friend, it will help me save money and treat me to rewards when I’ve been good.

Hmmm … a truly open, honest, transparent bank that really has a relationship with me.

Now wouldn’t that be something?


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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  • Chris
    Reading your post, I get in my mind a quote from John Naisbitt:
    “If banks do not reflect about in what business they are in, they will soon make no more business at all.”
    And what is banking business all about? It is about people. Banking is and will always be a people’s business.
    Therefore bank-managers have always to look, what people are looking for. And people today are looking for involvement and engagement. That explains the rise of social media.
    And because social media is important for the people it is of strategic importance for banks. And if banks are not going to accept this and going for a change, it will be the customers to change their banks…
    Kind Regards
    Hansjörg Leichsenring