The questions a bank needs to ask include:

• Do our customers know enough about our products and services?

        The answer to this is always no. 

• Can we handle some (possibly negative) feedback?

        The answer to this used to be no, and that has to change to 'yes'.

• Do we have a mechanism in place to translate good or bad feedback into better service?

            If your customers are engaged enough to tell you how to improve your service take it on board, it might be worth listening to. If you put a mechanism in place to communicate with your customers through blogs or discussions you will get bad feedback.
Deal with it. Learn from it. Fix it.

It's a real challenge for banks on two fronts.

Sociologically communication on the internet is evolving away from traditional methods. Consumers are using the web as a medium to collaborate to buy, influence other buyers and, as we saw in the HSBC student loan example - to influence the sellers. The first two are able to be managed. The latter is probably the greatest challenge. if your customers want to complain about something, make sure they can complain to you first.

In the requirement to move in the same circles as consumers, this may not necessarily mean starting a Facebook page, but it does mean banks can benefit from changing their online interface to more reflect consumer choices.  This might mean blogs on the site by product teams and other data feeds to customers. The way in which banks approach this will be a key factor in whether they get maximum benefit from the web. Customers actually might appreciate knowing what their bank was doing for them if it was delivered in easy to scan tidbits with links to look a little bit closer and even perform some transaction. Another way to build trust from a non-security perspective, is to educate. Customers would like to know more and they usually like to understand the bank's products and services before they'll buy. This is very dependent on achieving a trusted connection with your customers - a technology challenge.

Technologically the internet isn't turning out to be as safe as we'd like and banks have been encouraging consumers to use the channel, partly because it was perceived to represent lower costs and a revolution in electronic marketing. It hasn't quite turned out to be as effective or low cost yet, just look at those IT budgets. The challenge is to get the costs low and make it safe before new competitors do. Surveys show that banks are not seen as the leaders in the important digital trust space, and considering that trust is probably the main reason people have historically used banks, this is problematic. If trust shifts too far and competitors can earn it and provide convenience and ease, then where are banks? Banks need to regain the email channel from the phishers to get the most from the web so look seriously at improving the security of your customer communications, because when it comes to phishing - enough is enough.

Marketing must avoid a 'spam push' mentality and adopt an 'engaged customer pull' environment, where 'hard sells' are out and 'informed choices' are in. So long as your customers feel they are getting more than they give you they'll be easier to keep as your customers. The web just provides another way to do it. To get the ball rolling I'm sure you can think of a few 'complaints' (for example) that can be 'fixed'.

'Mobile advertising is the advertiser’s holy grail' and is all the rage with marketers but again the 'push' can be deadly, even though companies are using 3rd party 'brands' to spam consumers on their behalf but 'insulate' their brand. ie. UO brings you SMS news from Urban Outfitters. Most advertisers are waking up to the fact that most people don't want ads to their mobile  unless they ask for them or they are being 'paid' to receive them through phone account subsidy. Blyk are trying this in the UK but with the service targeting only 16-to 24-year-olds, they appear aware that this group are the only demographic willing to receive ads in return for free minutes. Banks still want 16-24 yr old customers so I guess there are possibilities there.

This still leaves banks with little room to manouvre in the digital domain.

Banks are a trust business. Banks need to engage with their customers and strengthen that trust. If done correctly, banks could be in a strong position to become a trusted source of information, not just financial product information, but possibly news and unrelated marketing. There is nothing to stop a trusted bank from offering it's customer a free meal or some other unrelated purchasing coupon. Bank customers need to buy tyres for their cars etc, why can't the bank 'help' them with a discount - especially if you facilitate the transaction?

In the old days the local bank manager was a one man PR and networking team, promoting customers to customers, providing 'news' and business information to the community. The bank manager was a member of the community, clubs, sports associations etc - for a reason - to engage with the community and the customers.  Well the customers have changed and there aren't enough managers so it's time to get with the new medium. Of course you'll need a bit of (preferably outside) expertise and apply some legal oversight, but there's no free lunches, and please do a usability study. Who knows, if your customers trust you enough, they may one day trust you enough to send messages to their mobile phones?

Start simple. The web is just a new way of engaging with the community of consumers and customers. The message and the goal is no different - trust. Start with your customers.

If it works out then you can look at expanding outside the bank's own site, but that's where I'd start. It's not just about banking online.