Article to appear in InforBanca
I have in the past, been asked to write several articles on the future bank and they all centred on the changing consumer habits and the impact that social media was beginning to have on the financial institutions. This time, however, it just seemed almost futile to reiterate the role that transparency, humility, candidness and an open conversation will play in the shaping of the future bank.
To all effects, I had seriously underestimated the degree of denial and utter disinterest in not only the banks’ willingness to face the music, but also many experts’ simplistic and ignorant views of the real and imminent threats facing banks today.
This article is not about the rumours surrounding Millennium BCP but instead the implications implicit from the Industry’s lack of acknowledgement that they still don’t understand what just happened. The rumour that began, allegedly through email, and then propagated through SMS and ultimately through social networks and email left a stench of naivety in the air.
Millennium BCP, in this case, through the voice of Santos Ferreira, claimed to have been “surprised with the impact and degree of organization” of the concerted effort to undermine the already fragile confidence of the general public in the banking system. The fact that the rumours hit a high on a Friday, when no one is at hand to deal with the crisis, seemed almost mundane.
Others later weighed in, such as the editorial section of the newspaper “Público”, offering the sanitised and worthless advice that “rumours are fought with facts”. Most would want you to believe that the general public had not reacted, however I know of several people who ignorantly reacted to the rumour. Ignorant is perhaps rather harsh if you take into account that after all humans are, contrary to common believe, extremely irrational – would you gamble on ignoring “sound advice” from other “rational and intelligent” friends? Especially at a time when all reports point to us trusting colleagues, friends and family above all else?
Malcolm Gladwell in his book, The Tipping Point – How Little Things Can Make a Big Difference depicts the power of the influencers, connectors and mavens. The startling fact lies in the law of the few, invoking the few and precise agents that will, or not, propagate something in an efficient manner to a scale unquantifiable and more worrying, unpredictable. These agents are the hubs of the network relishing the need to use the mass media. The latter inevitably forced to join the charade. The news is no longer about the message but instead its consequence.
September 2007 saw Northern Rock’s customers flock to their branches to withdraw every penny they had with the bank. So what makes us believe that this would be unthinkable in Portugal? Denial and fear of coming to terms with the fact that banks have no choice but to prepare for this day and social media is their only viable chance of ensuring that this does not occur in the near future.
The hoaxers may not have achieved their ultimate goal, but they sure did achieve the hardest part – ensuring that the message spread at an alarming rate under the radar only fully surfacing when it was too late. The next attack will be more effective, built on the experience learnt from the previous attempt. Just like the viruses that mutate in reaction to the antidote, the hoaxers will be only too wary of the fact that what failed was the content of the message – the missing ingredient to trigger the tipping point.
In a certain and perverse way, these hoaxers may actually become a sort of new age prophets – after all, through their claims, that financial institutions are presently in a precarious stage, if the tipping point is reached and mass panic induces withdrawals on a wide scale, have they caused or simply predicted the demise of the institution?
If you believe that the fragility comes from the industry’s inability to deal with the challenges that have emerged from the power of the web and the tools that are constantly developed to simplify the sharing of content (not to be confused with facts), then the victim must share some of the blame too.
In April 2010, Facebook launched a set of “social plug-ins” that lets anyone put Facebook’s comment box and the “Like” button on websites outside of Facebook. Just three weeks after these social plug-in tools were launched, more than 100,000 sites had already made use of the ultimate content spreader.
It became arguably the biggest stride to date toward a Ubiquitous existence of social networks creating the tools built to not just be social but also to be placed where the user already is, eliminating the need to go to the destination to spread the word.
These “social plug-ins” from Facebook will make that impulse easier and more natural to act upon, arguably more so than any other development since the advent of Facebook itself, now short of 600 million registered users.
Twitter on the other hand limits each thought, opinion or “fact” to 140 characters forcing those that tweet to shorten the phrase to a mere exclamation – impossible to offer any further citation or factual verification. There’s no space. The result is often an immediate, emotive, ego centric off the cuff remark or simple mindless sharing of an opinion for the insane simple reason of ease.
The veracity and consequences are placed aside in the heat of the moment. This is yet another example of our innate irrationality at work and most of us do it everyday. Whether forwarding a tasteless joke to all our friends, never stopping to think that some will go directly to enterprise emails, or by resending warnings that play to our conscience coupled with the free element of email. The consequence of not sending a free warning to your friends suddenly seems to override the need to stop and think it clearly through and actually not send it, or in other words, warn those you care about.
In fact, in the particular case of millennium BCP, what could we possibly say to our friends? The bank is solid? Are they though? Weren’t BPP, BPN, Lehman Brothers and all the other “victims” safe? At the time? This is too much to ask of the irrational human being. It is actually unfair. Few people are interested in propagating a rumour and judging by the fact that national newspapers suddenly found them selves flooded with 911 style calls – where was Millennium BCP? For the administration to send an email to all the workforce asking for “professionalism and serenity” from their staff is further puzzling.
Hiding behind the difficulties of anonymity that the web, and in this case, pre-paid mobile cards, have conferred to the wider audience is as pointless and damaging as creating legislation and software to combat the unwinnable battle on copyright. It destroyed the music Industry and this could ultimately be the driving factor for the demise of the banking industry, as we know it today.
The survivors are those that embrace this new paradigm and fight back, not through press releases and fact churning but instead by building goodwill internally by involving the stakeholders and giving them an impartial and control free voice whilst creating external goodwill with customers using the same tools and channels to converse, listen, act and place the customer first. There is now no other choice – embrace social media or risk being engulfed by the very one thing you tried to control, yet again.
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