Home / Innovation / Why banks MUST wake up to the mobile social revolution

Why banks MUST wake up to the mobile social revolution

I was asked to join a panel discussion on social media during
a recent conference.

A social media masterclass, as it was called.


Sure, I’ve been blogging and tweeting and facebooking for as
long as I can remember, but does that make me a master of social media?

I don’t know, but here’s what I said so you decide.

I remember my first exposures to social media goes way back to

I had been using forms of social media before this date, but this was when I ran a future of banking course for one of the big global banks and
Facebook had just hit my radar.  Suddenly, there was this opportunity to do something creative as a technology user, not just to receive and interact online.

Today we, as do many,
use Facebook and other media easily as tools to share and create content as both a business and social network but, back then, no-one used it for much at

Facebook had just emerged out of university campuses and banks
could not see why it was relevant at all.

But this point about social was hammered home to me early, thanks
to presenting at a conference where the CEO of McKinsey admitted that they had
never heard of YouTube until Google spent $1.65 billion acquiring it in 2006.

In other words, major pattern and behaviour shifts were occurring
in how people consumed media and entertainment and, if McKinsey could miss such things, we all could.

Now my radar focused firmly onto the outcomes of these developments.

The next big occasion when social hit my radar was in 2007.

I was lucky enough to host Wells Fargo at the Financial Services Club and Tim Collins, SVP of Experiential Marketing
was asked by the UK banking audience why they blogged?

Tim’s answer was simple: “if you’re not part of the social
world of conversation amongst your customers, then they will talk about you
negatively and you have no voice to respond. 
If you engage in the online conversation, then it becomes far more
civilised, interactive and interesting.”

There were lots of things discussed.

For example, the UK bank said they tried an internal blog
for three months but got so much negativity they shut it down.

Tim responded by saying that Wells Fargo had the same thing
from customers at first but, by having a team monitor their social media 24 by
7, they always responded to any negativity straight away with a response
explaining why it happened that way.

Customers were far more polite and calm when they saw their
rude postings garnered a civil reply; hence it led to being engaged in a
conversation.  Through conversation, the
bank learned a lot more about what frustrated customers.  The result is better products and services.

However, it is quite clear that the bank cannot engage in
such activity half-heartedly, as you need to be responsive and therefore have
people dedicated to social media interaction.

Like a call centre, it’s a response team to online questions
and issues.

He also said that now other customers often reply to rude
postings, and that their best service agents are their own advocates.

I hear this from many other banks now too.

Finally, Tim talked about the reasons why they first got
into social media and it was in part related to one customer who had created a
website called wellsfargosucks.com.

Unfortunately, that website came up as the first result in
any Google search.

Therefore, in order to ensure the right image of the bank
was presented, the bank sees social media as a key method of moving the right
message to the top of the search results rather than leaving it to negativity
from media or anti-bank activists.

Three years after these events, we saw the Arab Spring,
Molly Katchpole publicly shame Bank of America,
Wikileaks and Anonymous compromising everything from the US Department of Defence
to their Head of Cybersecurity.

These are all momentous changes in society, communication
and how we relate to each other, how we consume, how we are entertained and how
we lobby governments, regulators and media.

The Occupy movement would not exist without social media,
and this movement is now a key influence on the Bank system, as regulators like
the Bank of England pick up and use their influences to shape their regulations.

We also see many new financial service operations emerging using social media leverage from capital markets (etoro, stocktwits, etc) to
corporate banking (funding circle, kickstarter, Market Invoice, Platform Black,
the Receivables Exchange, etc)} to retail banking (zopa, moven, simple, Bitcoin,

This is an unstoppable movement and it is shocking that most
banks and bankers do not even use Facebook and Twitter (which are just
not social media itself).

I carried on to talk about various examples of best
practices, including AMEX and CBA, USAA and First Direct, but you need to come
to my presentations to find out more about these.

Regardless, the point being made is that any organisation that
ignores the fabric of society – bear in mind over a billion people use Facebook
,and it’s already old (youngsters are already moving to alternatives like Vine)
– is missing a trick.

In fact, more importantly, they would be missing the point:
the world is changing and we need to too.

What amazed me in 2006, and still does today, is that most banks miss the point as to why these deveopments are important because they are firewalled out

The workers spend all day working and do not see why social media is relevant because they cannot use it at work and are too tired to spend time at home on a social network when there are other things to do, like being a dad, mum, husband or wife.

I am sure many banks are changing their policies towards
social media and no longer firewalling everyone out … but there are still far
too many that are not and these are the ones that are starting to smell a
little bit of nostalgic old worlds.

Traditional, heritage, Grade II listed banking.

Old Bank

The Old Bank Hotel, Oxford - what usually happens to a Grade II Listed Bank

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...

Check Also

Why bitcoin is not a ‘fraud’ or ‘bubble’, but something you should take seriously

Unless you have been asleep for the last year, you cannot have failed to catch …

  • What if the mobile cloud, BitCoin and BigData mix and every trade transaction can be registered and processed in real time? Say, if every trade would generate a tweet. How much data would that be entire daily volume? Visa processes 82 billion transactions per year during 2012.. if we overestimate that with a factor 100 to correct it for a global system then we have a daily volume of some 25 billion transactions. With a twitter sort envelope that is a daily volume of 25 terabyte. The costs of a terabyte Solid-state-drive is less than 500 EUR. So, with a bunch of graphical processing units for vector processing and such disks, for some 100.000 EUR you’ll have the hardware to build a system that can process every financial transaction in the world in real time. High-frequency trade in an information rich Keynesian world.. where every item acts like its own security. So, if such a network with instant mutual valuation or several of these come into being, at what level of complexity would such a decentralized model replace the role of money, or at least move it away from the use of currencies and/or banks? At around 2020 your mobile phone can deal with terabyte scale memory.. in 2030 it can deal with a factor 1000 more.. Information processing is catching up with the processing of value, and it is taking over. This is clear on localized supernodes in the network, such as the Chicago stock exchange… but what is going to happen with the two merge? When it is not just information /about/ trade anymore, but the information processing and the trade and the processing happen without a noticeable delay and the whole world is one big interconnected bundle of self-describing derivatives without the need for any centralized processing anymore?

  • Of the businesses that deal in retail, banks are typically the ones most divorced from their customers. This is in part because the product at its core is so solid and definable that it doesn’t need an understanding of the customer to work. e.g. money. It’s also in part because of the oligopoly subsidy structure of the industry – banks don’t need to know to survive.
    But consider that once upon a time, know your customer meant that the branch manager actually knew every customer in the bank. Personally, and he would meet frequently. These days it means something completely different, something to do with data, and people know their call center with angst. Consider also when supermarkets start doing banking, this makes sense to customers but no sense to banks. Who’s right?
    Social media is just what people do — this decade. The problem isn’t being involved with social media, it is being involved with people.

  • it’s not just “social media”, it is big data mixing with mobility which gives decentralized business intelligence where processing power is such that for every geo-location at any given time bartering systems can be valuated and exchange quota can be generated for any combination.
    Money is its own “adjacent possible”.. it is a local maximum of interchangeability but it derives its value from its level of entanglement with local trade networks.. and so it is an intermediate good. With mobile allowing for big data (and big function?) to be everywhere at the time needed, the need for money as such will increasingly disappear in favour of enacted procedures.