Virtual Banking: A Guide to Innovation and Partnering

Chapter 2 Social and Financial Services Maintaining Relationships and Relevance through Social Strategies

“Banking is necessary, but banks are not.”

—Bill Gates, Microsoft

Some of you may remember what it was like to live in a small town 50 to 60 years ago. Your corner store knew you by name and probably had your preferences and shopping habits memorized. In fact, in the 1950s, it was common to have that relationship with half a dozen stores, including your local grocery store and pharmacy. Your local banker also knew you well and could often anticipate your needs and give you the level of attention and service that comes with years of interactions. You could tell the store manager to put the bill on your tab, to be settled at the end of the month. He knew you were good for it; after all, he knew your reputation in the community and even knew who your banker was. Interactions were extremely personal and relationship oriented.

How things have changed over the past few decades. A recent Harris Poll indicates the banking industry has a reputation that isn’t much better than the tobacco industry.¹ That survey found that 51 percent of respondents indicated the financial services industry has a “very bad” reputation. Contrast this with technology companies, in which just 6 percent of respondents indicated this, and it is clear that banks need to do more than have Facebook pages. People trust their friends and family, but not their banks. How can the banking industry rebuild trust ...