Let's Talk About Money

by Greg Crandell

[Editor's Note -- Ron Daly is off for the week, so Greg Crandell, DigitalMailer's Executive Vice President, is stepping in for a guest post.]

I'm certain my kids are going to cringe if ever they read this, but I'd be remiss if I didn't start out with this phrase. 

IN MY DAY...people didn't talk about how much money they were making or what they were doing with it. The most chatter that went on about a person's money matters happened when your neighbor drove home with a new boat dragging behind the car. Hopefully on a trailer, because there's no faster way to ruin a boat than by dragging it down a rough street. 

But the times, they are a'changin', as they so often do. People are becoming more open, sharing their thoughts via Twitter, their home movies via YouTube, their hobbies over Etsy and their...well, everything via Facebook. Facebook surpassed Google in total visits to its homepage a few weeks ago and, as CNBC says, it's "a sign that the web is becoming more sociable than searchable".

Even as the world wide web begins to bring people even closer together, online banking becomes a greater part of people's finance management. Of course those realms are going to overlap, but to what effect? 

From Gartner Newsroom: 

Social banking* is the combination of social trends, such as green practices, social entrepreneurship, and peer-to-peer (P2P) lending and financial planning via social networks, with banking products and services. Venture capital investment in financial social networks (FSNs) such as Zopa, Prosper and Lending Club, as well as Virgin USA's acquisition of a majority stake in CircleLending point to the growing prevalence of FSNs and increasing consumer interest in this area. 

“This combination of business, non-profit organisations and social justice is being bolstered by general consumer trends and social causes that appeal to consumers to shop ethically,” said Alistair Newton, research vice president at Gartner.  “In addition, more consumers are generally spending more time in social networks which increasingly form part of consumer purchase processes for new products and services.”

One thing that's changed the game for financial marketers is that space - the concept of it, the power of it, the return on investment - has changed. One can, conceivably, have as much "space" online as a big bank or a power player of finance - the makings of such a thing are relatively inexpensive (those LinkedIn, Twitter, Facebook, YouTube etc. accounts are free, the expense is in the content population and upkeep). Where your investment really needs to go is into creating products, making decisions and doing things worth TALKING about on all these newfangled websites. Referral is a powerful tool and word-of-mouth is even more powerful than it was when there were actually words coming out of someone's actual mouth. If there's any better compass for this stuff than these presentations available at the Financial Brand, please let me know.

I won't bore you talking about Mint and Wesabe and the ten dozen other PFM online apps out there being adopted to work with CUs country-wide. Let's look at some other innovations from some familiar sources: 

• Fiserv recently added a widget that allows people logging into their online banking to pay bills from the home page. No need for a separate "pay bills" tab, just make a fast transfer. 

How this reaches the "Facebook set": Encourages people to pay bills online and makes the option as quick and painless as possible - some call it "usability design", some just call it "simplifying".  

• Hyves, a social network in the Netherlands, teamed up with Rabobank to create "Hyves Payments", where profile holders can transfer money to one another via their social network (not their bank - it works with non-Rabobank bank accounts as well). They can also make payments to shops that accept the Hyves Payments program.

How this reaches the "Facebook set": How does it NOT? There's a video in that web link above, go watch it. Very neat stuff. Peers can send money to one another with no transaction fee incurred. Is this what's next for Facebook and online money management? 

• Creditors are using people's social media presences to make character judgements, according to these two articles [here and here]. Granted, we've spent the past few years finding out that "character" doesn't have much to do with high finance (hi, Bernie Madoff). Still, there's nothing stopping a bank or credit union from judging a user based on the content of their profiles, their reactions to the bank or credit union (positive AND negative), or their friends' profiles and histories. 

How this reaches the "Facebook set": Never has there been more personal information VOLUNTEERED online than now. The company you keep might be a significant factor in the loan you don't get. Will this be a boon or a bane to trust in financial social networking? Either way, better hope that your credit union stays your friend online so that you won't get "unfollowed".  

Whether we like it or not, members are talking money. Their own, their neighbors', their friends' - the scary part for any credit union worth its salt is "how do they know they're getting the right information?"

This is the part where you say, "I'd better get in on this conversation so that at least someone has an idea of what they're talking about - before it's too late to comment." Am I right? 

Comments

[mike]

Very informative post, Ron. I remember helping promote that Fiserv widget/app (actually Galaxy created it) a couple years ago. Carolina Collegiate CU was one of the first CUs to use it -- with great success.

As for consumers getting the right credit union message, I agree with you that credit unions need to get in on the conversation to control the message. The conversation is going to go on with or without you. So you might as well join in!

--Mike (dmlcomm.blogspot.com)

[Denise Wymore]

Great post and I love your last question.

How do we know they are getting the right information?

I'm going to show my age here, (picture grumpy old man pounding his fist on the table). Back in MY day, if you held the position of Member Service Representative you were required to take Financial Counseling classes at the local community college. That's what we called it back then.

I guess what I'm saying is, not many credit union employees today have an in-depth knowledge of personal financial management skills. PFMs are merely tools - the wisdom and knowledge shared by humans is what makes them even more powerful.

I think we should engage so we can learn from these folks. Not control the conversation, per se.