We can loosely define the social enterprise as the democratization of business processes through technology channels that remove barriers for engaging communication by flattening organizational levels, enhance the sharing of innovation and ideas and increase opportunities for enriched connections among employees, customers and inter-related groups.
By leveraging the social model, the banking industry has the potential for a dynamic period of innovation, and an even chance of remaining relevant to our customers — and employees — as they gain control of the conversation.
During the conference keynote, Salesforce.com’s CEO, Marc Benioff drew a comparison between the social powered revolutions we saw during the Arab Spring and the evolution within the business world. Though Salesforce is recognized for innovation in cloud computing and customer relationship management, the company’s deliberate pivot to embrace social technologies as integral to their business model is significant for the banking industry, which has historically been less than accommodating toward new technologies.
Resisting the allure of shiny new things seems to be engrained in our heavily regulated, risk-averse culture. Banks initially shunned everything from computers, credit cards, email, the internet, online banking, bill pay, mobile banking, open source architecture, and cloud computing (as well as ATMs, P2P, A2A, PFM, and NFC — bankers seem to love three letter acronyms). These advances were often blocked based on perceived risks to security, control, or the balance sheet — but our ecosystem eventually embraces most forms of innovation that reduces costs, improves procedures, expands opportunities and concurrently improves the customer experience.
Don’t let the same lethargic response happen with the social enterprise.
You may already be involved in attempting to engage your customers and prospects through social media, but how are the same social channels influencing activity throughout your bank? How are social technologies affecting your business model and your processes?
The majority of financial institutions not only restrict employee access to traditional social networks like Facebook and Twitter, they also fail to leverage cloud-based business collaboration tools and networks like Google Docs and LinkedIn.
We need to move beyond paper, phone, and email folks. It’s time for banking to completely embrace social technology.
One of the most powerful segments of Benioff’s keynote focused on international retailer Burberry, whose CEO Angela Ahrendts stated goal, when taking the helm in 2006, was to take her new company fully digital, end to end. This meant that Burberry’s customers would have total access to the company’s products and people, through any channel, and get the same feel of the brand regardless of where and how they chose to experience it.
To any skeptical CEO, Ahrendts adds, “if you don’t do that, I don’t know what your business model is in five years.” This coming from a clothing manufacturer established in 1856. A quick visit to Burberry via a mobile device will give you an idea of how far they have come. Bankers take note.
The majority of financial institutions are simply not engaging their customer base through social technologies. Most banks leverage one-way communication or take a shotgun approach toward communicating with their customers. This isn’t maximizing benefit to their brand, overall loyalty, or growth opportunities.
To be fair, the marketing model has changed so dramatically in the last decade — banking isn’t the only model unprepared for disruption — but we have been late to the game before. The customer is now the driver of the conversation, and the move toward leveraging social technologies will only heighten the importance The social enterprise is a learning enterprise, always focused on listening, engaging, and improving.
The Altimeter Group’s Brian Solis recently wrote that we’re only now moving out of the period of social media 1.0. More businesses need to start listening to their customers and employees and start engaging them on their terms, within their chosen networks. In a related post post Solis cites a recent Capgemini report showing only “32% of businesses surveyed are on their way to designing what many would refer to as a social business or a social enterprise.” You’re not preaching to the choir if only a third of us are even listening to the music.
Equally important to banks should be the message they are sending to their own employees. By limiting, or completely restricting access to social technology within the enterprise, banks are clearly stating that they are not willing to embrace marketplace innovation. If communication is an issue within your institution, consider moving beyond your static intranet, and open up the walls of your organization by leveraging social communication tools to better share ideas, capture improvements to your processes and start innovating. For internally focused community building, if you are a Salesforce.com customer, consider leveraging Chatter, which will now enable external group conversations. If not, look at Yammer, SocialText, Jive, or IBM’s Connections.
Our industry should be concerned about our general ability to lead the next generation of bankers who are more akin to the socially focused customer of today, but may lack the ability to connect to the real growth opportunities of tomorrow. This means that we shouldn’t be relying solely on 20-something interns to develop our own version of the social enterprise (or worse yet, a solely outsourced vendor solution). They may understand how to use Facebook, but they may not understand how to leverage dynamic content in a heavily-regulated industry across multiple channels with what may end up being your most valuable, or most socially connected customers.
Just ask United Airlines or Toyota what ignoring a social media emergency looks like. Everyone in your organization needs to work toward shared learning experiences.
As the principles of engagement banking and the social enterprise gain momentum, our industry cannot ignore the opportunity to hold meaningful dialogue with customers and employees. Otherwise, we will continue to have a tardy reaction to external forces of innovation that will have a detrimental impact to our business model. This can be seen in the rise of alternative and mobile payment systems like Square, as well as new banking experiences like BankSimple and MovenBank, which are centered around the convergence of contextual client conversation, diversified data and extensible technology.
In my conversations about social technology I often experience a disconnect between less socially-minded bankers and consultants compared to my dialogue with technology mavens like Brett King (see my write-up on our recent Bank 2.0 Meet Up in San Francisco). My take is that there are consequences of working in isolation, of not being both internally and externally engaged. That’s why the concepts behind the social enterprise are so critical.
On the last evening of the Dreamforce conference, Marc Benioff interviewed Google’s chairman Eric Schmidt on the state of the technology industry. Among the thoughts he shared, Schmidt said he felt that the next Steve Jobs will come from a company at the intersection of mobile, location, and social.
That may not sound like he’s describing someone from the future of the banking industry. But if we don’t start thinking about embracing the social enterprise today, we’ll certainly find it harder to connect our legacy business model to the growth engines of the next decade.
Start setting the social enterprise roadmap at your bank. And in deference to Steve Jobs, think different.
This article was originally published at American Banker.