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I dont need a bank do I?

I needed $2000.00 for fixing my home. I stepped into my bank for a line of credit. The chap (relationship manager) asked me to fill up half a dozen forms, took a declaration to check on my credit rating, added processing fee and finally told me I can get $1488.00. I said a No! I checked my savings account; a balance of $510 in 3 months depleted to $439.  All fee and charges."Are you happy with our service, Sir?" asked the relationship manager.  "Yes indeed.'I replied. 

Once home logged onto my favourite social website and discussed with a friend my recent experience. My friend called a couple of his friends and agreed to lend me the money for a small interest. I was thrilled. I got the money through a famed money transfer agency. No paper work, processing fee, credit check, embarasing wait and a disappointing reply. I paid back in next four months. We now have an inclusive closed group; mutually trust worthy and the confidence of reliability.

That is the power of social web sites. I see lot of smart chaps into business, trading books, exchanging information, seeking jobs to name a few activities.

Given this fast evolving scenario, the social media has made many an organisation redundant. A few months ago I see a bank selling products on trial basis to see consumer response. Not that it had many takers. This new virtual market place is the future of trade and transactions. No small print (1000 lines in a 6 size font on a A4 size paper divided into 2 sections with the last line (font size 11) reading, 'I agree to the above terms and conditions'. I will not have to pay the courtesy overdraft fee, or the fee for 6th transaction or maintain the minimum balance. The banks,  the analysts say after the recession are strategising on how to retain customer loyalty and confidence. Who needs them anyways. I rather go social than to a bank. 

 

 

 

 

 

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Comments: (2)

A Finextra member
A Finextra member 12 May, 2011, 15:12Be the first to give this comment the thumbs up 0 likes

Is it that you don't need a bank or that you need a better bank? I recently took out a loan for a used car. The process was (almost)effortless, painless and fast! The decision came back in less than a minute and their only question after details about the car was "What branch would you like to pick up the check?"

Chris

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 13 May, 2011, 11:02Be the first to give this comment the thumbs up 0 likes

I remember blogging about PROSPER, Zopa, CircleLending and other social media lending services way back in 2006. While their contribution to making the lending process more frictionless must be acknowledged, they don't seem to have made a significant dent to the lending business of conventional banks in the over five years of their existence. The very fact that a bank treated you the way it did unfortunately only seems to reinforce this point. Warts and all, banks don't make it obvious to my friends that I'm passing the hat around, which is a major stumbling block for Facebook and other open social networking platforms to replace banks in the lending business - not to mention risk (for the lender), regulation and a host of other factors that are still stacked heavily in favor of banks.