Brett King

Posts Tagged ‘Social Networking’

Banks and Social Media – Substance or Hype? FinExtra Twitterview

In Blogs, Groundswell, Media, Retail Banking, Social Networking, Twitter on February 17, 2010 at 09:35

See the original post on FinExtra with ELIZABETH LUMLEY

For those of you unfamiliar with the term Twitterview – it is a Twitter based interview. This limits the options somewhat as your replies have to be able to fit on a 140 character Tweet. Nonetheless, the interview below and Liz’s commentary on the interview are a solid summary of my responses and my views on Social Media’s impact on Banking. You can also check out the latest report on Social Media in Finance from Chris Skinner and myself at the Financial Services Club website. For the first 5 ppl that leave a comment on this blog article I’ll also send you a free copy!

Here’s the Twitterview…

Banks and social media – More substance or more Kool-Aid?

Finextra recently held a live Twitterview with Brett King, banking consultant and author of upcoming book Bank 2.0. During the conversation, King says that online banking will beat branch banking this year – and that the time has come to call all services ‘mainstream banking’.

More controversially, King claimed that regulations were just an ‘excuse’ for banks to not engage in social media and were not a legal barrier. Banks acting as wallflowers in a 2.0 world is not an option, according to King. One comment from @NitinGupta, on #finxlive, commented that banks may lag behind on social media because so many resources have been diverted in order to fight the 2009 credit crisis.

King also saw no reason why the likes of Morgan Stanley or Nomura couldn’t include ‘point-of-impact’ marketing into its dealer portals in order to alert customers of other bank services.

Agree? Did you RT anything? Are you, as King puts it, part of the 20th or the 21st Century? Or do you think this is all social media ‘Kool-Aid’, with no real insight to issues facing modern banking and financial services?

If you missed the #finxlive Twitterview – here is the transcript (some Qs&As have been combined or slightly modified to aid better reading – blogs aren’t bound by 140 characters)

Finextra Welcome all to the inaugural Finextra Twitterview – today we are chatting to Brett King, author of Bank 2.0. Welcome Brett – Let’s start off with our first question

e-Business, social media, Bank 2.0 – Alternative ways of interacting with the customer, or is the medium part of the message?

brettking This year in UK/US Internet Banking revenue will beat out branch revenue – so when do we start calling it mainstream banking? In a recent survey I just finished 93% of respondents consider 2.0 necessary for banking. So WWW, social media, mobile banking are just ways of banking. Banks need to start to understand that they are not alt. mediums

Finextra Is this change in behaviour led by the client or by the technology?

brettking In my book Bank 2.0 I call these changes in behaviour disruptive ‘phases’ – tech is the enabler, but behaviour is the catalyst. Look at adoption rates of new tech since 1900 – we are accepting new tech faster – this influences behaviour.

Finextra Yes, but within financial markets strict regulations prohibited the financial industry from engaging in social media … Are financial services doomed to be 2.0 wallflowers?

brettking Ha! Good Q. Too often regs are used as an excuse. Org. bias towards branch and financial metrics are more of a restriction than regs. On 2.0 wallflowers – it’s a question of whether banks are prepared to start listening and adapting

Finextra I know I mentioned marketing. But getting back to wallflowers – you really dispute the reg issue?

brettking Regs are not the issue – bank’s internal compliance, legal dept and culture put more restrictions on 2.0 adoptions than regs

Finextra Could it be just how internal dept. are interpreting regs?

brettking I think the issue is more about organizational structure – risk mgmt and regs are frameworks, but customer advocacy should be DNA

Finextra ‘Brand marketing’ vrs ‘point of impact’ – why has the financial industry been slow to integrate this type of marketing?

brettking Marketers are having a difficult time adjusting from broadcast to customer. Lack of use of customer analytics is the main hold up. This is a huge change for marketers – they need to develop a whole layer of customer ‘offer’ management capability. Probably today 50% of the skill sets in bank marketing departments are poorly suited to the Bank 2.0 world.

Finextra 50% of marketing skill sets are unsuited to 2.0 – Is this unique to the banking world?

brettking Not really unique to banking, but banks have been too dependent on print and DM – that has to change FAST. I talk about Point-of-Impact in the book. Banks need to service-sell i.e. insert their value into the Tx chain.

Finextra Mobile apps are hot. Will we access all our banking via a phone in 10 yrs – Or will security issues hamper?

brettking Mobile banking will reach 1.1 Bn by 2015 – but already BofA has more than 3.5m mobile banking customers. In many ways mobile phones are more secure than WWW, so don’t think this is issue. Mobile payments are the hotter area though

Risk to banks is I see a lot more third parties infringing on traditional retail banking with apps/widget – like @themozone @square. But mobile is what I call the pillars between the 2nd and 3rd phases of disruption – very powerful consumer enablers

Finextra Ah, the non-bank competitor. Hot issue in payments

brettking Non-bank competitors aren’t bound by the channel silos, compliance rules, etc – so they are more agile. For marketers it is about reengineering from advertising & campaign to customer offer mgmt.

Think of banking as a ‘utility’ – FED=Generator, Bank network=Wires, but these days anyone can own the meter – mobile will be huge

Finextra Is this all about consumer banking – where are the corporate, wholesale benefits?

brettking Corporate banking services are perhaps even more suited to mobile and 2.0 because of informational requirements/real-time demand. Only 1% of the surveyed group said they expect social media to decline incidentally.

Finextra What do they mean by social media? Dealer portals, using RIA, from the likes of Morgan Stanley and Nomura?

brettking Widgets and Apps (RIA) are very important for getting the right content to users for decision making, comes back 2 point-of-impact. But for corporate users Blogs, Privately Owned Social Networks and LInkedIn dominate the space. Facebook and Twitter are great tools for branding and personal networking, but not so effective in B2B scenarios as yet.

Finextra Morgan Stanley gets clients on the portal, then sells other bank services? Point of Impact?

brettking Sure – a gr8 example of point-of-impact is buying an airline ticket on – that’s where I should sell you travel insurance. Or when you walk into Bloomingdales or M&S – you get a location based msg for discounts using your bank credit card. Point-of-impact turns banking into a service – not a sell.

Finextra Which banks do you see with advanced attitudes/projects around social internet media? Is it better to hold back than do social media wrong?

brettking Forcing customers to come to your branch or your website is BANK 1.0 – 20th century stuff! 🙂 2.0 is very transparent – In Nov09 Nordea staff got caught seeding forums – 2.0 is about listening not control @First_Direct is talking a lot about customer scoring, BofA SME stuff good, @Ask_WellsFargo & others are trying out 2.0 customer support.

Finextra Exactly ‘trying out’ stuff. Are other banks sitting back watching the experiment?

brettking 2010 is the year for social banking in more ways than just 2.0 – the bonus backlash has shown that too. Banks need to innovate – experimenting is a great way. Banks are sitting back far too much though – that is the risk.

Finextra 2010 – the year the customer comes to the bank and the banks better be ready?

brettking Take internet payments – PayPal owns 48% of the internet payments landscape today – banks waited on that front too. Customers don’t see banking as special anymore – they just expect it to work – across any channel for them. Banks need to stop thinking about bonuses, branches and budgets – and start thinking about how to reach customers.

A good approach would be the Google approach – give staff 20% of their time to work on customer initiatives and innovation

Finextra Excellent, thanks Brett you were a great Finextra Twitterview.


Customer’s tell banks “We don’t believe you anymore…” (HuffPost Blog)

In Blogs, Groundswell, Media, Retail Banking, Social Networking, Strategy, Twitter on February 11, 2010 at 14:21

Brand reputation the key to banks leveraging social media.
Check out the original entry on Huffington Post…

Recently I posted on how shifts in consumer behavior and technology adoption is significantly changing the marketing dynamic for banks. Essentially my message was that for marketing to continue to be effective in measurable ways, that a large portion of effort needed to be redirected to optimizing the mechanisms for reaching and enabling customers, rather than just reinforcing brand recall and directing campaigns. I have had some brand marketers bristle at this suggestion and asking me how brands themselves would get started or get known it it wasn’t for the fundamentals of brand marketing.

First of all, I don’t believe that brand marketing will disappear, however, I think it is far to say that social media brings a transparency and honesty that means that despite the best brand marketing money can buy, if you screw up your customer relationships it won’t matter – social media will punish you. Google was able to build its brand entirely online, so some might argue that the need for traditional brand marketing is no longer a given either. However, for banks right now, they need all the help they can get, so it can’t hurt.

Brand marketing is useful for telling us as consumers the core brand values of these organizations who want our business. Banks have long held up their brands as bastions of stability, trust and understanding. They kept telling us that they were safe places to hold our hard earned savings, and that when they loaned us money we should be eternally grateful, because it was only out of their gracious generosity that we were able to afford to buy that new home, car or trip to the Caymans. We could trust banks because they were ‘as safe as houses’! Well, guess what…thanks to banks even houses aren’t safe anymore.

The side-effect of the global financial crisis, and the huge botch up that leading financial brands like Bank of America, Citi, Merrill, JP Morgan, Goldman Sachs, RBS and others have made with their bonuses and lack of prudence, is that trust for banks is at an all time low. Brand marketing is not going to save the banks in this environment.

Right now if you go and do a twitter feed search on say… Bank of America you’ll find a plethora of negativity out there in cyberspace. Now to be fair BofA has a twitter feed (@BofA_Help) and they have a Blogsite ( – although it should be pointed out that their blog has no content as yet…

The key issue is that although Bank of America has a brand built over more than a century, their brand presence across the USA is pervasive, and their marketing capability staggering, they face an uphill battle. None of that capability really can help them in the current environment where they lack transparency on fees, are generally seen as out of touch with customers and are struggling in the war on customer word of mouth impact. Brand marketing is not enough to win in the 21st Century – the BANK 2.0 paradigm. Bank’s need to rebuild their brand reputation – and telling us how fantastic they are won’t cut it anymore. We just don’t trust those messages anymore.

What customers long to see is banks that care. Banks that reward you for the more business you do with them. Banks that are prepared occasionally to waive fees because you are a good customer. Banks that try to make it easier to work with them, instead of the endless compliance hoops we have to jump through because the banks find it to much trouble to change their internal processes.

We want the banks to build their brand reputation by restoring their reputation with us – the customer.

Social media is empowering customers – giving them a voice. It’s time major brands took the time to listen and adapt. Most banks spend millions on focus groups, customer satisfaction surveys and mystery shopping exercises each year to find out what they can learn for free just by listening to their customers on social networks and blogs. It’s not rocket science – but it is good branding.

What DAVOS needs to do, but won’t

In Groundswell, Media, Retail Banking, Social Networking, Strategy on January 26, 2010 at 23:14

We’ve all read a great deal about DAVOS World Economic Forum (WEF) over the last few days discussing what the leaders of the planet will need to achieve. While the environment, and responses to crisis like Haiti will be sure to be a feature, the world in general will be looking for Davos to achieve is some progress on reforming the global financial system.

Considering the G20 and G7 and others have had a shot at this there is some indication that at DAVOS this year reform of the global financial system will continue to be the hot topic. The focus will likely be on the role of regulators, the flow of capital, interconnectedness of global capital markets and trade, and the way banks should work responsibly to free up capital and encourage liquidity. The forum is unlikely to get into specific discussions on the creation or structuring of financial instruments or speculative trading practices, rather sticking to the core principles of how the financial system can be better managed to prevent future problems.

The World Economic Forum is by invitation only and those that are invited are the undisputed world leaders in their fields. Typical participants include government representatives of the world’s top economies and fastest-growing small countries, heads of state like Vladimir Putin and Wen Jia Bao, government ministers for finance/economics, leaders from international NGOs, cultural and sports leaders such as U2’s Bono, and thought leaders like Bill Gates and Al Gore. The most influential voices and minds in the world today.

Wen Jiabao, Klaus Schwab - World Economic Forum Annual Meeting Davos 2009
DAVOS-KLOSTERS/SWITZERLAND, 28JAN09 – Wen Jiabao (L) , Premier of the People’s Republic of China and Klaus Schwab, Founder and Executive Chairman, World Economic Forum, captured during the session ‘Special Session with Wen Jiabao, Premier of the People’s Republic of China’ at the Annual Meeting 2009 of the World Economic Forum in Davos, Switzerland, January 28, 2009. Copyright by World Economic Forum by Monika Flueckiger

Looking through the World Economic Forum Programme for this coming weekend there are some incredible speakers and topics. James Cameron will be there to talk about directing Avatar. Reid Hoffman (Linkedin), Evan Williams (Twitter) and Owen Van Natta (MySpace) will be there to discuss the growing influence of social networks. Tim Brown (IDEO) and Gary Hamel (Author, MLab) will be there to discuss management innovation. Brian Moynihan, CEO of Bank of America, and others will be there to discuss redesigning capital markets. Bill and Melinda Gates will be there to discuss their foundation, and Melinda Gates will be discussing education for girls and how it effects economics in the developing world. This is just a small snapshot of the amazing depth to the forum, but something is missing.

The issue of customer advocacy and how input from customers is integrated into the strategy of an organization is completely absent from the forum. While management innovation, risk mitigation and big picture regulation and reform are being discussed, the voice of the customer is likely not to be heard this year at Davos. Why is that significant? When it comes to the financial crisis perhaps the most significant voices namely, the consumers who have been affected by the global financial crisis with job losses, foreclosures or mortgage repossessions and general economic challenges, are silent due to their absence. Interestingly while seeking to ‘fix the system’ the forum doesn’t actually appear to have any mechanism or sessions dedicated to these issues which are the primary outcome of the financial crisis.

While I agree that the system is broken, new thinking is required on how to ensure that the changes protect customers and not just reduce institutional risk and government exposure. There is no apparent discussion on innovation and compensation for financial institutions so that the massive profits that have been yielded, despite the financial crisis, can be injected back into the system in a more constructive way than through the bonus checks of bank senior executives. We should be seeing sessions that tie the financial system to economic improvement through corporate social responsibility and better initiatives for the disadvantaged, and sessions that motivate global financial brands to do more to support microfinance and give the unbanked more accessibility to finance in the developing world. These are all problems of which there are reasonably simple solutions if there is the will.