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Banks, big data and doing the right thing

July 21, 2013 Leave a comment

How comfortable are we about our banks mining personal data?

Banks around the world are wrestling with the complexity and the opportunity around big data as a way to deepen their relationship with customers online.

According to a study earlier this month by Infosys nine out of 10 people would be happy sharing some data with their bank if they received more customisable offers or experiences.

The study compared consumers attitudes to sharing data with retailers, banks and doctors and, probably predictably, banks came out as slightly behind the other two sectors when it came to data trades.

However, despite the finding above the study clearly shows consumers are in some conflict over the benefits and drawbacks of banks using big data.

Almost half  (49%) also say they do not want their purchase and transaction data used to offer new services based on their habits but, almost in the same breath, 48% of bank customers would be happy for the bank to use email or social media to provide them with updates or insights.

The study also finds consumers are more concerned with their account security. Around four fifths (82%) want their banks and financial providers to mine their data to detect anomalies from identity thieves, with the same amount (82%) expecting their banks to already be doing this.”

It is such an important issue that just over three quarters (76%) agree that they would consider changing banks if one offered assurances that their data and money would be safer in their systems.

Financial services futurist – and co-founder of MovenScott Bales has an interesting theory that following Edward Snowden’s revelations the strength of feeling around how our data is used could create a new social and political movement around transparency.

Digital natives will come to demand complete transparency on how their data is being used not just by governments, but by corporates as well.

He says: “The reality of the modern world is that if your doing something wrong behind closed doors. The Facebook Generation will find out,  they will share what your doing, and you will be held accountable.”

The Infosys study shows consumers expect better deals from retailers in return for sharing personal information and better attention from their doctor’s office for a similar trade. But banks don’t have a great track record in utilising what they know about the customer: e.g. “Would you like insurance with that?”

Post-GFC, trust in banks generally is going to take some time to recover – particularly in Europe and the US where bank failures have destroyed consumer confidence. One UK survey predicts it will take a generation before banks are trusted again.

How banks use big data to interact with their customers online (and by online I really mean mobile) in the next few years is going to be critical to the relevance of banking and the securing of trust in the minds of a new generation of customers.

There is an amazing opportunity for banks to use the data opportunity to transform their customers online experiences for the better. Instead of going down the retail route of using the data just to flog more products what if banks decided their focus would be purely on using insight to create ways to make customers richer; safer and happier?

But above all there is an incredible opportunity for banking to use big data in a way that embraces openness. That combination of deep insight and transparency could be the difference between banks continuing to be relevant to a new generation of consumers. Or not.

Webstock 2013 – Clay Johnson

February 24, 2013 Leave a comment

Clay Johnson

The man who created Obama’s election site, Clay Johnson, kicked things off at Webstock 2013 with a presentation that possibly should’ve been the grande finale.

Clay Johnson at Webstock 2013

Clay Johnson at Webstock 2013 (Image from Webstock 2013 Flickr stream)

Like a surgeon performing Bariatric procedure he carefully laid open the flabby body of media we have today – where the news we get is saccharine and designed to affirm the perceptions of the mass market consumer, rather than challenging.

“MSNBC tells the ‘Left’ what they want to hear. Fox News tells the ‘Right’ what they want to hear.”

It’s an old adage that a society gets the news it deserves and Johnson’s prescription for the consumer was to use a diet analogy and treat news like food. Opinion may taste better than fact-based news in the same way that pizza tastes better than broccoli, but opinion-based news also comes with side-effects you don’t get with green veges. So as with managing food, he advises we need to consciously consume news – rather than unthinkingly graze through the day on the content equivalent of fried potatoes or meat.

He made five recommendations:

  1. Consciously consume – write down content you consume for a week and analyse it to see when you were consuming, what it was and whether it added value.
  2. Schedule your daily social media or TV consumption ‘urges’. “Time is our true non- renewable resource. You can always get more money but not more time.”
  3. Go local with your news consumption – be aware of your local environment. You can influence more at a local level, so understand what’s going on in your backyard.
  4. Be a producer rather than consumer. Take action/react rather than just passively consume. He gave each delegate the challenge of writing 500 words before 8am every day. Johnson said he treats this as if it were gym – stretch and strengthen the mind on a daily basis. Become mentally active in a way that adds to the betterment of humanity.
  5. Enable whole news movement. Support content rather than advertising. “Every click we make is an ethical choice – we vote for more of that.”

Johnson’s presentation left me with two other thoughts that have been ringing in my ears since the conference. The first that in 10 years time people who don’t get computers will be same as people now who can’t read. And there’s a lot of people risk being left behind in this transformation.

Threat to society?

But he also talked to an even more worrisome future state where the sheep-like affirmation-centric behaviour of digital consumers clicking on the advertising links they are given by the likes of Facebook or other online behemoths, slowly transforms the rights and liberties that sustain our society.

Facebook’s business model is to mine personal data and use that for advertising  – as a publicly listed company the pressure from Wall Street to deliver on this logically means Facebook’s hunger for our personal data will only increase. Which, to some, may make them the most dangerous company on earth.

And if you follow this argument of a now global profit-driven organisation reliant on extracting ever more personal details of its members to supply ever more relevant advertising   – well, you can get to quite a dark place. It is dark because it’s about driving consumer behaviour through advertising that is based on very good data about who we are as individuals – but on a global scale.

Now one could argue that advertising has been doing this for decades, based on focus groups and quantitative data from surveys – but there’s never been a platform where one organisation can record whatever intimate details and relationships that members share with friends, in such detail and on a global scale.

We have a choice
Of course, at the end of the day, we all have a choice with our level of engagement in social media. We don’t have to put all our lives in updates and tweets for the world to consume. But Facebook has a decidedly chequered history on privacy issues – graph search is the latest to raise concerns. And the stories of young gay people being outed to their parents because of the often opaque nature of Facebook’s privacy settings calls into question how much “choice” Facebook really allows members.

But Johnson’s underlying message – and a theme that continued throughout Webstock – was that there is the potential of a  positive outcome for society as we as individuals act in a more discerning way. By not blindly consuming, by focusing our attention rather than abdicating it, on an individual basis we can ensure a brighter future – despite the commercial pressures of the internet giants of today.

“A billion people dictating how people communicate and interact is law,” said Johnson.

Our choice is whether we want a future driven by advertising clicks, or  or future driven by betterment of humanity.

Why our social media strategy is just wrong

June 6, 2011 2 comments
Role of social media

Why businesses do social media

The chart above articulates, for me, the reasons why businesses, particularly financial institutions, are involved in social media. Right now we are primarily there for customer service reasons. And that’s because our customers are already there – they beat us to social media sites like Facebook and Twitter a long time ago, and we followed because we had to. We can’t not be where our customers are, and we’re reacting to their needs as best we can.

We try to gauge sentiment but, as I discussed in my previous post, the tools aren’t around at the moment to meaningfully allow us to really gauge sentiment  based on social media activity. The data is there, for sure, but it’s so vast and unstructured we struggle to make sense of it.

Most of us use social media to support our brands. Some do this really well – but most of the time we’re so pre-occupied with trying to service customers in social media we don’t step out of the reactive space and move into the leadership space. And to really support your brand well you need to be leading, not reacting.

Some of us try sales and marketing but in social media channels we generally end up giving our recipients blunt-force trauma. Standard CRM or, even worse, DM marketing techniques don’t go down overly well in social media. It’s all just too obvious and crude – like a desperate pick-up line before the slow finale at the school dance.

Current to future state Social Media

Our social media strategies need to evolve

The vast majority of business activity in social media currently is supporting customer service. And this is an unsustainable strategy based on reactivity which needs to change, fast. We need to start leading.

Businesses (and banks in particular) operate social media channels like an online drop-in centre where unauthenticated people raise issues publicly that we move to a voice channel after authentication. It’s like a front-desk where you ring a bell and get your issue rapidly dealt with as they get a not too dissimilar priority as escalations to the CEO office.

But because most of us need to authenticate customers to be able to solve their problems, dealing with a customer in Facebook or Twitter is very hard for businesses. We need to move them into an authenticated channel – “e.g. DM me your number” where we can better meet their needs.

Someone who knows this only too well is Esteban Kolsky . In this video interview (10 minutes of pretty spot on commentary) Kolsky makes some incisive statements around the conundrum of dealing with customers in social media channels.

He cites that less than 4% of complaints are resolved via Twitter.  

I paraphrase him, but his argument is: “(In Twitter) You find customers who want to complain, they would do it anyway, they just get better escalation by doing it in Twitter. I never met a customer in my life that could explain the situation in 140 characters, let alone have the problem resolved in 140 characters.”

This resonates with me and it’s a situation where a lot of us find ourselves. And I don’t believe it’s sustainable at all.

Banks, in particular,  should be leveraging the golden opportunity of social media around data and shifting the focus from 1-2-1 customer support to brand and sales supporting and gauging customer sentiment. We should be putting our business information and knowledge management teams onto this right now.

Because the biggest issue today with social media strategy is that organisations either don’t get it (admittedly less and less of them) or are managing it in a completely unsustainable way – and I think that’s most of us.

Lost without a map in the world of Social Media

June 5, 2011 Leave a comment

The trouble with Social Media for business is that there’s a lot of noise – and currently we don’t have the tools to filter this noise.

Prosumer

The Prosumer

This noise is being created by The Prosumer – the consumer who produces as much (in some cases more) than they consume. While the term Prosumer originates with Toffler in the 1970s, it’s really been the advent of web 2.0 that has given this consumer segment the ability to give full flight to their insatiable creativity.

You can only marvel at what the prosumer is accomplishing. I’ve been trawling stats for a presentation and some of them are just astounding. In fact, they’re probably more astounding now as the daily rate of increase for sites like Twitter and Facebook mean the figures below are probably already understating the case. Nevertheless it’s breathtaking:

  • Every minute: 20 hours of video are uploaded to YouTube
  • Every hour: 10.5 million songs illegally downloaded
  • 175 million registered on Twitter and 50 billion tweets in March
  • Facebook has 600 million visits a month – which translates into 300 million visits a day
  • Facebook’s total user base is equal to the 3rd biggest country in the world after China and India.
  • In New Zealand, a country of 4.4m people,  1.9m Kiwis have Facebook pages. To put that into context, here are only 2.8 million New Zealanders between the ages of 18 and 65.

I find this is the most extraordinary example of the impact of Prosumerism: In 2002 human beings created 5 Exabytes of unique information. If you want to write that it looks like this:

50,000,000,000,000,000,000

That’s 50 with 18 zeros. Not being a numbers guy I had to look up what to call such a large number and it turns out the term for something with that many zeroes is Quintillion. So, in 2002, 50 Quintillion bytes of data were created and what’s astounding is that this is more than was collectively generated by humans in the preceding 5,000 years. So in one year human beings created more data than in the previous 5,000 years.

We’re now doubling this every two years. This is the new reality and it’s Moore’s Law on anabolic steroids.

What it means for businesses trying to manage Social Media engagement is that the vast amount of data to filter is unfathomable. We are pioneers on a new frontier that’s as daunting and thrilling as any faced by humans before. Does that sound too cheesy? Well, as it may, but I truly believe that this unprecedented social interaction which has been enabled by Web 2.0 will transform our society. But only when we can actually make sense of the storm of digital noise that’s doubling every two years.

Dalrymple's early map of New Zealand

Chart of the South Pacifick Ocean Pointing out the Discoveries made therein Previous to 1764

And that’s the rub. The tools we have now to chart social media are equivalent to the maps carried by Cook in his voyages of discovery. They show us the tantalising outlines of potentially exciting and exotic continents that make us look at our world anew. But for the moment they are only tantalising outlines.