Building a community to improve an industry

We’re still moving too slowly.

Big firms know they need to change, but most are spending too much time wrestling with technology, policies, and a scarcity of good use cases. For banks and insurance companies, change is even slower due to regulations and a culture of information hoarding.

It’s time to try something different. And, earlier this week, we did.

A symposium

On Monday, 19 banks and insurance companies convened on Wall Street to talk about improving collaboration at their firms. How to make work better - more efficient, effective, and fulfilling. Unlike other meetings or conferences, the focus wasn’t on presentations but on building a community - a purposeful network whose goal is to accelerate learning.

For example, everyone is trying to interpret country-specific data privacy regulations so we know what content we can store and share. It’s important to get this right but the lack of clarity is slowing everyone down. If we could share interpretations and implementations that were already approved, we could all move on more quickly to work that would generate more value.

Banks can share, too

This wasn’t a secret club talking about trading algorithms. The discussions were on basic issues like ways to eliminate waste or the best ways to build a community. Things you might read online or hear at an industry conference.

The key difference was the focus on connecting people who care about specific topics and understood the specific issues in our industry so they could accelerate change. In this network, there are no vendors selling products or fees to join. The motivations are more intrinsic: the desire to make work better.

“Why would you do that?”

Later in the week, I was speaking to a large consulting firm and happened to mention the symposium. They were a bit taken aback. “Why would you do that?”

Because our industry is in desperate need of eliminating waste.

Because our industry and our customers need more innovation.

Because the millions of people in our industry want more fulfilling work.

Because, in just a few hours working with peers at other firms, I learned of ways I could realize more value for my firm, more quickly, than I thought was possible. And now I have friends (yes, the “f-word”) who can help me.

“Oh,” they said. “That makes sense.”

What’s next?

One meeting doesn’t make a community. It will take quite some time before we develop the personal relationships and the trust we need to call it that.

But we took a step. Now, we’ll use an online space to share questions and some simple content. We’ll organize working groups to focus on specific problems we discussed at the symposium. We’ll share stories and back each other up so we can take greater advantage of precedents. As we learn and as we build trust, we'll be ready to share and do more.

To achieve the kind of change our industry needs, it’s time for a different approach.

Your best use of social media may not require a single post

If you’re in a regulated firm, you’re still struggling with social media. Maybe your marketing department uses it, or you’ve read about a few examples in your industry. But for most of the individual businesses within your firm, you’ll quickly get mired in legal, compliance, data privacy, and data security issues before you can figure out who can post what.

So what if you could realize more value, with less risk, by never posting at all?

Why many firms block access

Over the past year, I’ve met with vendors that help financial services firms use social media. Most of our conversations focus on compliance requirements related to updating profiles, comments, messages, and likes.

You can be in a room with 20 people - lawyers, HR, compliance, technology, and business people - discussing questions such as “Are likes considered recommendations? Do they need to be pre-approved?”

It quickly gets complicated. Legal and compliance, already under siege, get increasingly nervous. And everyone is still uncertain if all this effort and risk has any appreciable return.

In the face of all of this, it’s no wonder that many firms simply block access.

Recently, though, I was talking with Pedro Barreda and Cameron Randolph from Socialware, and we talked about the value of just providing read-only access to larger numbers of people.

Embracing the 90-9-1 

Throughout much of the internet, you’ll notice a reasonably consistent participation inequality.  The “90–9–1 rule”, suggests that “1% of people create content, 9% edit or modify that content, and 90% view the content without contributing.”

Overwhelmingly, the people in your firm will be more comfortable lurking - simply reading LinkedIn, Twitter, and Facebook - than posting content.

Instead of fighting that tendency, you can use it to your advantage by focusing on read-only use cases.

4 examples

While most use cases limit social media to a handful of people in marketing or support, these are applicable for many people across different divisions.

Monitoring: advice you’ll hear over and over is that the first thing you should do when using social media is listen. This isn’t just for brand communications, but for any business and any function. Knowing what people are saying about your firm, about your competitors, and even what your competitors are saying about themselves, has always been important. Social media just makes it easier than ever.

News: Increasingly, people are getting their news via their social filter and they’re also reporting it on social networks. Many different groups - from trading to business continuity - can benefit from an advantage in being alerted to news more quickly. So they should be monitoring Twitter for news as it’s often reported there before professional news channels.

Recruiting: Companies have long been looking for alternatives to exorbitant recruiting fees, using everything from employee referral fees to alumni networks. But why build your own network when those alumni - and millions of other professionals - are already on LinkedIn and Facebook? And when both your HR department and your employees can easily tap their networks on those platforms?

Lead generation: Every broker is looking for potential clients. And those clients are on LinkedIn and looking for advice. Here are some great statistics from a recent article titled “High Net Worth clients prefer LinkedIn”:

Cogent Research...suggests that of the more than 5 million high-net-worth investors [American and Canadian investors with more than $100,000 in investable assets] that are currently using social media almost 75% picked LinkedIn as the social media platform they use the most for investment research.

The reason for this is respondents felt LinkedIn created a “trusted platform for financial service companies” to engage with HNW investors.

Furthermore, among “ultra affluent” investors [more than $5 million in investable assets] investment research was identified as the top reason they visit the LinkedIn site. And when compared to the average investor, the ultra affluent are 37% more likely to trust information on their LinkedIn network and 157% more likely to trust articles that are shared on LinkedIn.”

Start building a capability

April Rudin, who specializes in marketing in the high net-wroth space, writes:

“The best and easiest social media platform for wealth management firms, private banks and others to begin on is LinkedIn. LinkedIn's user interface is more familiar and it's an obvious business platform which makes it the path of least resistance.”

That’s a great way to think about it. Instead of stumbling on all of the complex cases, find examples and modes of access that make it easy for people - both individuals and compliance departments - to get started.

More and more, your firm’s customers will want meaningful interaction using social media.

“53% of HNW investors say they expect to receive relevant and timely content from social media platforms and 45% said they would value real-time interaction and conversation with an advisor or other investors.”

It’s time to take some steps and begin learning how to do that.

Why are banks so interested in collaboration platforms?

This Tuesday, 7 banks attended an event to learn more about Jive, a social business platform. Insurance, publishing, consulting, and technology firms were there, too. But there were more in banking than any other industry.



The main reason for all the interest is that banks have the most to gain from better collaboration and communication.

Many banks are huge companies. The top 4 US banks alone spend almost $300 billion and employ over 1.1 million people all over the planet.

More importantly, they tend to be wasteful. Over the past few decades, they made enough money that they could afford to be wasteful. They were focused on growth over efficiency - particularly on the investment banking side,

Now, with fundamental shifts in their business models, all the big banks need to seek other paths to profits. Eliminating waste, always an obvious thing, is more of an imperative than ever.

Staff recruiting & engagement

Just as it used to be easier to make money, it used to be easier to attract and retain people. Bank employees always worked hard under difficult, stressful conditions but they were paid a premium in exchange. And there was always a decided cachet to the phrase “investment bank.”

Now, as bonus pools and social recognition have been diluted, banks need to pay more attention to how work gets done. That includes, among many things, giving people the tools and convenience they're used to at home. It includes making it easier for people to do their jobs and to have a voice.

More than ever, if young, bright people feel like they’re going back in time when they enter a bank, they’ll look for other options.


When it comes to sharing information, banks are conflicted. They aim to enforce “need to know” policies and “only use bank devices for work” policies. Yet they also want to break down the silos and discover more cross-selling opportunities.

Which is it? Well, it’s all of the above. Yet, the combination of old tools combined with restrictive policies leads to a set of incoherent, inconsistent, and ineffective controls.

Studies by regulators (e.g., looking for business use of public social media by employees) have shown that people, while conscious of the rules, tend to do what’s easiest and most effective to get their jobs done. Regulators caution that “willful ignorance is not an option.” If there's evidence that policies aren't practical, then banks need to do more.

Modern collaboration platforms are part of the solution, allowing firms to consolidate the current disparate array of tools. That makes it easier for employees to communicate while also making it easier for banks to retain and supervise communications where they need to.

What are you waiting for?

Every single bank I know recognizes that their collaboration solutions are inadequate. A few have made significant progress. Some started well but stumbled on compliance or organizational churn. But the remainder, the majority, are spending protracted time running pilots and wondering what to do next.

If you’re one of those firms, please stop. Given the extraordinary potential for commercial and personal benefits, the time for dithering is over.

Now is the time to make a decision, lead a movement, and change the way your firm works.

What’s it worth?

If social tools and practices can fundamentally change how we work, how much is that worth? As a starting point, I estimate the top 4 US banks alone can use social business efforts to realize an extra $5 billion of value.

At least.

Things to focus on

Sameer Patel is a noted social business consultant (now at SAP) who writes about accelerating business performance using social software. In a recent post, he pointed out that much of his audience is still asking the wrong questions.

“...we’re still looking at things such as “Encourage Sharing”, “Enable Action”, “Knowledge Capture” and “Empowerment” as end value points via social business...If practitioners can’t draw connectors between strategic and tactical objectives and how social networks facilitate execution, end users and executives won’t experience the needed aha moment.”

Focusing on people is important. But to be relevant to businesses, we better also focus on eliminating waste and increasing revenue opportunities.

Where to look

At large firms, in particular, controlling expenses is always difficult. The larger the firm, the harder it is to know who does what and who spends what. The costs - and the waste - add up quickly.

In just the top 4 US banks, for example, there are over 1 million employees and over $287 billion in costs.


Bank of America


$90 billion
JP Morgan Chase


$81 billion
Wells Fargo


$65 billion


$51 billion

Not all costs can be reduced using social tools and practices. (Legal costs, for example.) But, in looking to improve efficiency, a good place to look is in the support areas - large divisions that cost a lot but don’t bring in revenue. A good rule of thumb is that about 1/3 of the people and 1/6 of the costs are for 3 such functions - IT, Operations, and Finance.

Just that slice of these firms costs $47 billion.

A good match for social business

Drilling further into that number, a firm like Bank of America might have 50,000 people in IT alone. (In contrast, Facebook is worth almost as much as all of BofA yet employs only 3,000 people.)

What are those IT people doing? They’re not writing software. Largely, they’re moving information around. They’re coordinating work among multiple teams and functions. They’re supporting systems and trouble-shooting problems. They’re overseeing the use of expensive hardware, software, and market data.

And those are terrific areas to apply social tools and practices.

Social business efforts are ideal for connecting people across locations and across teams to solve problems more quickly, reduce cycle times, reduce service calls, optimize the use of resources, and a wide range of other use cases.

These banks have all tried the traditional, centralized approaches to cost-cutting - offshoring, vendor management, bonus reductions - with some good results.

But the waste is too insidious, too pervasive, to just be managed centrally. And the only way to drive out the waste in that $47 billion of support costs for these 4 banks (and in the overall $287 billion of expense) is to enable much more distributed approaches.

  • Can the 4 banks improve the spread of best practices to reduce their computing costs of $12+ billion by more than 8%?
  • Can they reduce the time associated with chasing information to increase productivity of the 300,000 support people by more than 5%?
  • Can they crowdsource the quality of who’s using what (and how) to reduce overall expenses - not just cut but optimize - by an extra 5%?

Yes, yes, and yes. It may not necessarily be $5 billion in savings. It could be more.

How to generate more revenue

It’s important to focus on costs because those are the hard dollars. Still, a lot of revenue flows through banks. The 4 big banks generated revenues of well over $300 billion.

How much more could they generate using social tools and practices?

Morten Hansen writes about one aspect of this answer - cross-selling - in his excellent book, “Collaboration.”

“Wells Fargo is able to collaborate internally across its eighty-four businesses to present “one Wells Fargo” to customers, who in turn buy more products. This collaboration contributes to profitable growth.”

Social tools and practices are ideal for exactly this kind of objective - connecting people, products, and ideas across the firm to deliver “one Bank.”

The Wells Fargo CEO knew that “The cost of selling a product to an existing customer is only about 10 percent of selling the same product to a new customer.” And, with a focus on cross-selling during the period from 1997-2007, Wells Fargo doubled their sales-per-customer.

Importantly, that number was twice what Bank of America sold per customer in 2007. And the profits-per-customer was also double. (Hansen includes excellent data in the endnotes of “Collaboration” to back up these numbers.)

With well over 100 million customers, think of how much more revenue the 4 banks could generate. Now, add that to the cost savings above and my estimate of $5 billion of extra value looks conservative.

Think big

In the past year, I’ve been guilty of aiming too low. Of trying to save, say, $10 million so I could have a positive ROI. That’s nowhere close to good enough.

We’re in the middle of a megatrend. And now is time to go after the big commercial benefits.

As Sameer writes,

“The first innings of social in the enterprise is over. Those organizations that like to experiment have done so...But there’s massive untapped opportunity out there to revise the value proposition...Until then...executives will treat “social business” as another Mickey Mouse program until they see how it matters to revenue increase, cost reduction and risk mitigation.”

For the social business movement to be sustainable and relevant for enterprises, then we have to focus on achieving measurable commercial benefits.

To help the people working in our large enterprises, we have to go beyond just connecting them. We have to make our enterprises much more efficient and effective.

Re-humanizing banking: making savings social

Banks focus a lot on scale and efficiency. On making financial plumbing work better. And that’s good. But banks are largely ignoring another source of value: personal connections.

Now, social tools and practices make it practical to “re-humanize banking” - to connect employees to employees, employees to customers, and customers to each other. (In a “re-humanize” series of posts, I’ll be writing about each category.)

“Social saving” is one area where connecting customers to each other can help banks as well as customers.

Here are several examples. Note where the innovation is coming from - and where it isn’t.


Social saving” is broadly defined as sharing a saving goal with your social network and having them help you reach that goal through peer support or contributions.

Perhaps the best example of social saving is SmartyPig: “a free online piggybank for people saving for specific financial goals.”

With an engaging mobile app, SmartyPig makes it easy for users to “add money to an existing goal, make contributions to friend’s goals...and share messages through Twitter and Facebook.”

Where does the money go? Not to your bank but away from it. (“Savings accounts are securely held at BBVA Compass and are FDIC insured.”)


piggymojo focuses on “impulse savings.” (Here’s a nice article on describing the concept.)

When it comes to money, piggymojo aims to “make saving it more rewarding than spending it.” Every time you turn an impulse buy into an impulse save, you text the amount to piggymojo. Then they share it with your savings “partners” (e.g., your spouse) as well as your social networks.

Unlike SmartyPig, piggymojo doesn’t handle your money. They just track your savings and “make it easy for you to transfer your weekly savings to a dedicated savings account.”


Savingspoint “is an online social savings account that allows you to save and contribute money towards savings goals.” You simply share your goals online and with your social networks. Then you give or receive money for things like weddings, college, or fund-raising events.

Like SmartyPig, Savingspoint uses a 3rd-party to hold the funds instead of your bank (“your funds are held by Partner Bank(s), which are FDIC members”) but they charge fees on some transactions.

Banks encourage savings, too. (But they’re not social.)

Putnam, an investment company, takes the idea of impulse savings a step further. Their PriceCheck&Save app lets you scan a barcode, retrieve a price, and (instead of you buying the item) transfer that money to your Putnam 401k account. (To further motivate you, the app tells you how much more you’ll receive every month throughout your retirement as a result of saving instead of buying.)

PNC Bank lets you “Shake the Pig” with its Virtual Wallet. Their mobile app lets “customers...shake device [sic] or tap the wallet to transfer funds from the Spend Account to the Growth Account”

Both of these financial firms want to make it easier for customers to save and increase balances. But they’re missing the social element that provides support and encouragement and makes the whole savings process more engaging.

There’s more. Much more.

All the banks are looking for ways to be more profitable. Instead of a race to the bottom on efficiency (or, worse, adding fees) - instead of just using social tools to generate Likes - they might look for new ways to connect people to increase engagement and create value.

The customer-made videos on SmartyPig’s inspiration page speak to the possible increase in customer engagement. And this quote from a SmartyPig customer speaks to the business threat and opportunity for banks:

"Went to a bank yesterday to open an account. Picked up a magazine while waiting for the rep, saw an article about SmartyPig, went home and opened up my SmartyPig account. Funny how things happen."

— Susan B. (via Facebook)

Re-humanizing banking

The only people I trust with all my money are my wife and my bank. Yet, while I love my wife, I don’t know a single person at my bank.

Despite all its skills and resources, my bank is, for me, just a faceless institution that houses cash machines. There’s no personal connection or trust. No real difference for me when I walk into any of my bank’s branches or a competitor’s.

Isn’t that odd? Isn’t that an opportunity?

Branch of the future(?)

Banks know that things can be different. And several are promoting their version of the “branch of the future.”

The problem is they all seem to focus on the wrong things.

The NY Times, for example, reviewed one such opening:

“[The CEO said] “customers want to be served in a very different way.”

To accomplish that, they, first and foremost, bought many flat-screen televisions.

The new branch features them on seemingly every available surface, including six “interactive sales walls” that take the place of paper brochures. The branch — which has the feel of a chic hotel lobby more than anything else — also features a 24-hour video-chat terminal for customers who happen to find themselves needing assistance from a representative at, say, 4 a.m. on a Saturday.

“We want this branch to be more than just a bank,” [said a head of retail banking]. “We want this branch to be a place where customers view it as a hub, a center of the community, if you will. A place where they feel warm and welcome, that they can come in and experience our free Wi-Fi access.”

That's the future? Really?

Banks are people, too

Flat-screen TVs and WiFI won’t make a branch a “center of the community.” People will.

Banks don’t have to be faceless institutions. There are 2 million people who work in the top 20 banks alone. And, in all the banks I’ve worked in, it’s the people who’ve truly made those places great.

Banking can and should be personal.

Branch of the future!

The branch of the future should focus on personal connections - on re-humanizing banking.

While “personal banking” has traditionally been reserved for very small banks or very wealthy clients, social tools and practices make it easier to scale a wide range of personal connections.

  • Connections between employees and customers. Using social platforms to build relationships with customers that want them. Complementing the globalized, standardized bank processes with local, personalized advisory services that build trust and engagement.
  • Connections between employees. Cultivating internal communities of practice so employees in similar roles can help each other solve problems and get better at what they do.
  • Connections between customers. Cultivating customer communities to connect customers with similar financial goals and challenges. Enabling customers to help each other by providing the platform, community management, and professional advice.

Yes, there are significant risks and tradeoffs with all of this. Yes, it’s hard.

But, given the amount of money involved and the number of people working with and for banks, the benefits of re-humanizing them are staggering. And well worth the effort.

Compliance just said yes to social media. Now what?

The ABCs of social media in financial services are about getting access. But the “D” of social media (as the estimable Josh Levine commented last week) is: “Does it make or save money for the company?”

In financial services, it’s so hard to get compliance to say “yes” that many businesses aren’t thinking through what they’ll do next.

Here’s how you can be different.

Put the Why before the How

The first thing you can do is to ask yourself how social media might relate to your specific business objectives.

“What problems are you trying to solve?”

“How would you measure success?

“Have would you tie activity on social media to commercial benefits?”

I find businesses are often so focused on access that their answer to these basic questions is “I don’t know.” Or something vague like “We’ll use it for marketing” or “Our competitors are doing it and we need to keep up.”

Your best guide

Every time I have one of these conversations, I recommend “Social Media ROI” by Olivier Blanchard.

I confess to reading the book twice. The first time, I thought it was dull. I had just a general interest in social media at the time and was looking for more inspiring stories. The second time, though, I was advising specific businesses on specific use cases. Then the book was riveting.

Other books might inspire you. This one forces you to think through the details. It’s a comprehensive handbook meant for practitioners, covering topics ranging from monitoring to organizational models to specific measurements and reporting.

Blanchard sets the tone on very first page:

“Building a social media program for an organization is takes patience, long hours of intricate planning, and a razor-sharp focus on getting things right..behind every corporate success story in this space is a basic operational framework that places all the right elements in the right way and at the right time. Social media success doesn’t happen by accident. It is engineered.”

Careful, the How is messy.

But that engineering is difficult. Look at all those small companies in the Gartner Magic Quadrant. And that's just a fraction of them. The sheer newness of social media means that the tools are immature and still evolving, with many niche players and acquisitions.

And because the objectives and culture of each company (and often each business line) are different, your social media program has to be custom-tailored. While Blanchard’s book is an excellent guide, you simply can’t apply what works at other companies. You have to figure it out for yourself.

Fail cheap and early

To be effective, you’ll have to embrace the newness and uncertainty. You’ll have to learn - by doing - what works and what doesn’t.

It's important to take small steps while connecting your firm's social media practitioners so they can all share the learning. Within a large enterprise, this means individual businesses might attempt specific projects as small, thoughtful experiments. But, for the sake of the enterprise, all the businesses would be aware of these projects and their results so everyone could learn and build on them.

As Blanchard concludes in the afterword:

“It takes time, diligence, focus, and a lot of patience...You don’t have to build it all in one go....Experiment. Test. Build on what you learn...measure success and adapt as needed. That is ultimately how this works.”

Forget Likes. Your bank should be your best friend.

Recently, someone sent me a list of the “Top 150 Banks on Facebook.” There was a note attached pointing out how the banks at the top of the list were out-innovating the others who were failing to achieve “social media success.”

That’s ridiculous.

It's a tough time to be a bank - or a banking customer. So banks shouldn’t be using social platforms to be popular. They should use social platforms to make banking better.

Here’s a real example.


BillGuard is a small start-up that “alerts you to hidden charges, billing errors, misleading subscriptions, scams and fraud on your credit cards.”  They claim 9 out of 10 people don't check their bills, or merely skim them quickly for large purchases (that’s certainly true for me). So they aim to make it easier to catch problems on your bill.

When you sign up for their free service, you register your credit cards by giving them your login and password. They scan all your charges, looking for possible problems based on their own data and analytics as well as a unique crowdsourcing approach to fraud detection:

“Every day tens of thousands of people report bad charges on their credit and debit card bills to their banks and merchants. Millions more post their complaints online. Up until now all that knowledge hasn't been benefiting the most important person of all, you. BillGuard is a free service that harnesses our collective vigilance to protect everyone from hidden charges, billing errors, forgotten subscriptions, scams and fraud.”

Real “social media success” for banks

Billguard is a great idea and I use it every month. But isn’t odd that I’m giving all my credit card data to a small start-up?

Shouldn’t my bank provide this valuable service for me?

  • They already have my data and my money.
  • They already have sophisticated fraud detection mechanisms.
  • And they could have a huge social network of their own to crowdsource further improvements to their data on fraudulent charges. (Bank of America, for example, has 40 million cardholders.)

It’s another opportunity for banks to apply network thinking. An opportunity to engage their huge customer base to solve old problems in new ways.

Instead of getting me to Like them, my bank should treat me as a friend - a really good friend who’s trusted them with all my money and needs help taking care of it. In doing so, my bank would improve their reputation, my loyalty, and their value.

That would be real social media success.