There has been an explosion of new ways to connect with customers on the internet in the past two years. Millions of people are posting detailed information about their lives on websites such as Facebook, MySpace, Bebo, Cyworld, Mixi and Badoo. Meanwhile, adults and children alike are living alternative lives in virtual worlds such as Entropia, Second Life, Habbo Hotel and Club Penguin. Why do banks and bankers have no idea what is going on?
Few banks are doing much to engage with this new media. ING, Royal Bank of Scotland, Saxo Bank, BNP Paribas, Deutsche Bank, Wells Fargo and a few others have messed about with virtual worlds, such as Second Life. Similarly, TD Waterhouse, JPMorgan, the Co-operative Bank, Royal Bank of Canada, Bank of America and Fortis have all thrashed around with social network experiments.
Whether these experiments are good or bad, worthwhile or not, is irrelevant. The fact that they are all trying to use this media – and perhaps reaping benefits – is the key and it should be applauded.
Nevertheless, one banker’s comment is telling: “I never knew any of this was happening.” Why not? Especially as some banking people use these social networking websites themselves.
At an annual conference, the CEO of a major global company was addressing the audience. The company has offices in almost every country, has a multi-billion dollar turnover and is universally recognised. The CEO said how astounded he was that Google had paid $1.65bn to buy YouTube in October 2006; astounded because he had never heard of YouTube. So he had called all of his direct reports into a meeting and asked: “How many of you are aware of YouTube?” No-one raised a hand. He told them: “This morning Google paid $1.65bn for it and so it is to our shame that we don’t know what they do. Let’s find out.”
At this point, he had switched on his PC and typed in www.youtube.com. The computer buzzed away for a few seconds and spat out the answer: “The corporate firewall does not allow you access to this service.”
This is the irony of the modern world: strategists, marketers, technologists, bankers, consultants, governments and more are all missing out on the most fundamental changes to our world because it is invisible to them. They are firewalled out.
As a result, the world of today is passing by the generation of yesterday because the management of yesterday dictate policies to the world of today. What will they be doing tomorrow?
Chris Skinner is an independent financial commentator. www.balatroltd.com
