Social Banking

The infographic from ZoneAlarm which we highlighted recently warns users of security concerns related to online banking and has an interesting ranking on online activities. It lists shopping at number one, followed by banking at number two, and social networking at number six.

Actually, this kind of ranking is obsolete. In the real world these activities are distinct; in the digital world, they blend seamlessly, and the sooner professionals in every field adapt to that reality, the better.

Take shopping. Real-world retailers have long been losing market share to their online counterparts, but there’s now a host of social media tools to help them to fight back. A new generation of shoppers—the one that goes shopping with an iPhone and a million applications—can be lured away from what they’ve been doing online.

You like a dress you see in a store? Tried it on, want to buy it? Take a picture, press a button, and there’s an application that tells you instantly how many stores within a one-mile radius has the same dress at a lower price. Perfect fit, instant gratification. Or let’s say you bought a dress last week, and you happen to walking past that store again—an in-store app senses you’re close by and sends you a text: “Thanks again for buying that dress last week. And since you’re so close, if you come in within the next hour, you’ll get these shoes, which match your dress perfectly, for 40 percent off.” Talk about impulse shopping.

OK, so banking isn’t shopping. But just one generation ago, when the Internet itself emerged, remember what it did to stock trading. The economy was bubbling over back then, a ton of dot-coms was galvanizing the marketplace, and people had money to invest. So everyone from Merrill Lynch and Charles Schwab to newer players like eTrade and ScottTrade got in on the action with a raft of online trading tools. Bottom line: people got into the market because they could, they did research because they could, they traded relentlessly because they could.

Social media represents the second coming of the Internet. Retailers, educators, service providers of every stripe are scrambling to offer applications that play to their specific audiences. In many cases, this means getting customers not only to what they’ve done before, but take advantage of entirely new capabilities.

So, a year from now, what will financial institutions enable their customers to do that they can’t do now? And which companies will be first out of the gate with exciting new capabilities? Let’s speculate.

Written by Staff