How “Social” is Your Bank?

The banking industry is missing out on a huge opportunity to transform itself from a transactional model to an engagement model.

Banks make money on our deposits, our transactions and lending us money. The economic models for banks are old and subsequently there is little differential from one bank to another. The customer experience is largely the same and yet bank after bank uses the tag line “relationship banking.”  Bank relations do matter just like any organization selling products and services. But the intent of relations is changing and so must the banking industry.

Think about the image we have of banks: a brick building we rarely go into with people behind a counter and the manager sitting in an office with plush furniture. What do these people do? Nothing more than manage transactions and the more they manage the more they make.

How Could Banks Increase Transactions?

Think about what lies within the system of banking: people and businesses. Now, do banks do anything to “connect” people and businesses to facilitate transactions amongst and between people and businesses? When was the last time your bank actually helped you do the following:

1. Solve a problem not having to do with a transaction
2. Introduced you or your business to others who may need your product or service
3. Provided you with new information or knowledge that helped you or your business be more productive
4. Helped you or your business grow revenue, besides lending money for you to do it yourself
5. Helped you find relevant and relative resources that you need

The answer to these questions is a bank simply doesn’t do any of these things, at least not consistently and as a regular part of their relations with customers.

What Would a “Social Bank” Do?

If banks would take advantage of social technology they could in fact create a “new system” that fueled transactions. Banks could set up a “social network” exclusively for banking customers to create profiles about who they are and what they do as well as a listing of their products and services. Banks could establish a “community” for customers to integrate their social media which would create a “digital marketplace” of conversations. The conversations could be tagged and categorized by interest and customers could find answers to the above 5 questions. Answers to these questions represent a “marketplace” which in the end creates an exchange of value requiring more transactions.

The chart below outlines the market opportunities, methods and goals which a “social bank” could accomplish.

It seems rather obvious that a bank is in actuality a network of people. However, the old bank mindset and business model has been focused on “taking money from the network” rather than helping the network make more money.

The marketplace is changing and money comes from enabling people to “engage with intent”. Maybe that ought to be the new mission statement for a “social bank“.  I would suggest that a mission such as suggested would gain lots of traction and subsequently transactions. That is if we could find a “social bank” anywhere.

I haven’t found one yet. Have you?

About Jay: Jay Deragon’s professional career includes providing strategic management consulting services to Fortune 500 companies as well as local small businesses. He has consulted with numerous industries spanning over 25 years of professional experience globally. His current professional endeavors are all centric to the disruptive nature of the social web. He writes at Relationship Economy and provides social media strategic services to businesses large and small. Jay Deragon is an avid student of the emerging landscape of all things social and the subsequent impact on business dynamics. Since 2004 Mr. Deragon has been actively studying, sharing and learning how business as unusual is changing business methods, models and relationships. Life is a journey and the experiences along the way provides learning that furthers the experiences if we know how and what to learn. for more info go here http://www.relationship-economy.com/?page_id=2

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