Monday 14 April 2008

Banking on Knowledge at MIT

MIT's Media Laboratory and Bank of America are teaming up to examine the future of online banking. The newly created Center for Future Banking will explore the impact of web computing and social networking on the way people manage their finances.

This is something which really interests me, as banks and financial services organisations are often conservative when it comes to innovative schemes like this one. It comes back to the question of whether or not you want your bank to be innovative and outlooking. You would probably want them to be more dependable and consistent.

However, as customer trends are showing, internet and convenience banking channels are becoming more popular. This is particularly evident amongst Gen x and y customers, who are being brought up on the web, and being digital natives, would prefer to transact online.

Some of the questions which the center will aim to address include:

How can every customer be empowered with the knowledge and tools to take better control of their financial futures?

This is where knowledge management on the inside can start to show on your customer-facing channels. I am a big fan of corporate blogging and podcasting, especially where the organisation is using web2.0 media to provide advice for customers. I have spoken before about the RaboDirect podcast series, which was a series of podcasts offering financial advice on a number of topics.

While this may not have brought in millions, it was the number #1 business podcast here in Ireland. It is time for others to follow suit, in a market which is still a niche, but one in which the early birds could benefit from.

How will banking interactions evolve as a customer’s physical and virtual worlds become completely intertwined?

This is an area in which environments like second life have begun to expose as a potential new market. I have experienced live IM sessions with Dell support staff recently, and found them to be much more informative and engaging than waiting on the end of the line listening to Whitney Houston for 20 minutes!

Organisations such as RBC are leading the field here, with virtual agents, a presence on facebook, and an excellent site, called RBC p2p on which 6 students blog to their peers about their financial experiences. This is where organisations need to be, in the same network as their customers. This has moved from the street to the participative web online.

Some organisations have already shown that building a community of customers enables you to provide an improved knowledge providing relationship while being able to gather valuable feedback at the same time - thus they become prosumers as defined by Don Tapscott in Wikinomics. A great example of this is the Sony Vaio user community.

How will social networks and mobile platforms transform customers’ banking experiences, making it easier, more convenient, and better integrated with their daily lives?

This is the golden question! We have seen how internet banking has transformed customer interactions since the late 90's, with a high percentage of customers now managing their finances through their banks online portal.

The demands will grow for more functions and increased engagement over new channels such as mobile internet banking and increased information sharing between banks and their customers.

This partnership will be interesting, as more and more organisations enter this unknown market.

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