Banking should be a more social place

The phenomenon of social networking is becoming increasingly popular and the number of web tools that facilitate online conversation and interaction are growing.  Millions of people are now exploiting these tools to share ideas, experiences and perspectives on a range of issues.

As the social networking phenomenon evolves, individuals are becoming active contributors in a multidimensional environment. The public is spending more time online, connecting with peers and using new tools, such as mashups, widgets, RSSs and other applications, with which they are becoming increasingly familiar.

New ways of channeling and leveraging these new publishing vehicles are continually being explored and these web-based tools represent a profound change in customer behaviour driven by digital communication.

Financial services firms should be taking a close look at what social media services can do for them.

An obvious extension of consumer demand for social media products is the provision of financial services and financial institutions should be taking a close look at what social media services can do for them.  By taking care of the payment and economic transaction infrastructure for example and providing flexible and secure processes for payments in social media, banks can facilitate the growth of a digital society.

The growth in social networking and online social lending could have important repercussions for banks.  A recent Gartner report highlighted that the Internet is making the way in which financial services are supplied more democratic and undermining the traditional relationship banks have with customers.