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
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?
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 BA.com - 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.