Would social media help you trust your bank more?

July 27th. 2008, 8:18am

One of the changes that Web technology has helped to deliver to the world, in addition to all of this social media stuff, is electronic commerce for the consumer. We pay online with credit cards or PayPal and we can pay many of our bills online directly from our bank accounts using a Web browser. Nonetheless, these advances in technology, which require some trust and faith in the controlling institutions, aren’t always widely adopted.

Our attitudes towards allowing outsiders to have access to our finances vary by individual, but countries also seem to hold certain attitudes towards trusting financial institutions.

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Here are a few personal observations:

Credit cards are very widely adopted across all walks of life where circumstances permit. B2C (business to consumer) commerce would never have become as widely adopted as it has become without a credit card, or something similar.
Electronic payments (manual or automated) directly from checking accounts are less widely adopted in certain countries than others.
Payment by debit card varies in popularity as well, although transaction fees have an impact on adoption as much as anything else.
Direct pay deposit to your bank account is another one that may have mixed adoption rates. It’s very popular here in Canada but I expect that it’s less popular in places like the United States, as an example.

I believe that Canadians are more trusting of their financial institutions, and electronic banking in general, than our neighbors in the US. I don’t know what it’s like in the European Union, Australia, Africa, Asia, or other parts of the world.

Your personal financial situation also influences your trust in financial institutions and your openness to electronic commerce. I would argue that people who aren’t living paycheck to paycheck to get by in life are more open to things like direct deposit, automated payments, debit cards, and so on because they have some disposable income.

Would social media make us trust the banks more?

Sometimes we find it hard to trust financial institutions because they either seem to make insanely large profits for what appears to be little effort or because they seem to screw things up enough to make us nervous.

Could social media play a role in building trust between consumers and financial institutions?

As ridiculous as this question may seem, it would be an interesting test to see how mainstream and relevant social media would be.

What do you think?

Could the community management, customer service, and communication tools in Web 2.0 help banks and other financial institutions inspire trust, loyalty, and enthusiasm in consumers?

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LaurelPapworth

Hello, I live in Australia and I can tell you that we don't trust our banks. In fact we are probably at a world wide low in the trust quotient, primarily due to the fact that we have the Big Four (banks that make over 40billion) colluding together (not my term, the regulators). The next one in line (5th largest) is at around 15 billion dollars so much lower.

We solve monopolies and collusion not through social media but through social banking. Peer to peer banking to be precise. I expect the three new Australian social network banks to take off shortly - Business Week says social network banking will be a 10 billion dollar industry by next year (it's only about 3 months old here). (social network banking is where you go to the social network to all chip in for a loan etc, rather than a bank manager).

My post Australia Peer to Peer lending might be interesting?
Great post by the way. Only one of our financial institutions has a blogger and it's not one of the Big Four :)

Mark Dykeman

Hi Laurel, thanks for your reply. Canada is a bit similar to Australia in that we have five (?) major banks across the country and a bunch of much smaller banks. Social banking sounds very interest, I'll have to check it out. Oh, and just to be clear, I don't work for a bank!

Kevin

Well, I've blogged a lot about this. Yes, i think it would and in fact I've put together a whole social media strategy aimed to do just that. Just need the banks to come play along.

Mark Dykeman

Might be something worth trying, they've fallen kind of low in terms of public opinion.

credit card issuers

Social media helps the card company a lot. Because thru social media we gain trust to our credit card provider. we only need online credit card or paypal, w/ this kind of transaction, no fraudulent activities will occur.

credit card

There's no harm in trying. Let's see the result when we get there.

aryanmehta

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