Role of Social Media in Financial Services

There's been a lot of excitement about recent "research" to say that only 10% of people on Twitter are responsible for 90% of the content, based on "a snapshot of 300,542 users in May 2009."

This is excellent news. Because if the basis for institutional people dismissing social media has become this hokey, the online world must have become truly mainstream.

We can stop referring to "Web 2.0" and just get on with it.

Twitter is interesting not because it's Next Big Thing, but because it's another popular way for people to engage with each other, either by publishing your own thoughts or reading those of others, but in a bite size format. The report that "figures from research firm Nielsen Online show that visitors to the site increased by 1,382%, from 475,000 to seven million, between February 2008 and February 2009" against Facebook's 228% growth for a similar period, suggests that it can afford to leave a few people behind.

But are they really being left behind?

You can't analyse Twitter in isolation, or say that it's really competing against anything or anyone. Twitter is not a divisible or competitive "channel" or medium. It's merely part of a co-operative mix of many different types of web site that are increasingly inter-linked and intertwined, enabling access to content from different people at different times on different platforms and networks, depending on where people are and what they're doing. Look at all the platforms or applications that enable people to send and receive Twitter "updates" - including Facebook - http://apps.facebook.com/twitter/.

We can have it all. At once. On one screen.

All of which is to say that Twitter - like any one of the other sub-networks on the Internet - is merely a hint of something much, much larger:

Interestingly, James Gardner, the Head of Innovation and Research in a major UK bank, says that, for banks, Twitter is a stunt. He says it's uneconomic for a bank to communicate through the medium because - I hope I don't summarise unfairly - it's too expensive for banks to create content that's relevant to people at scale. "Surely no one," he says, "thinks Twitter is going to be a channel choice that many customers are going to use regularly".

You mean there are predictable channel choices?!

Human physiology may be reasonably predictable, but human behaviour is not. Anyone who believes we can predict the means by which people will choose to manage their finances will be subject to a rare but cataclysmic event - a Black Swan, if you will - that could send them down the tubes (I've often wondered where "the tubes" go...). In reality, there is no "mass" of consumers, no bell-curve to accurately describe their behaviour to enable us to predict with any precision how each person is likely to behave next. We are merely guessing, because there is a point at which all those highfalutin credit scoring and other "models" break down, as even Lord Turner is now convinced.

Even Twitter could disappear in a sudden puff of user indifference, like others before it.

It's only one hypothesis, but to me the social media reflect numerous trends that seem to signify a (currently) rising desire to structure our personal lives and experiences as each of us sees fit. The commercial challenge that presents is how to facilitate that desire in a highly flexible, adaptable, bottom-up way, rather than dictate how it can be satisfied in a top-down fashion. Brands need to be facilitators, not institutions.

To illustrate this further, I'd suggest that the very complex dynamic process by which individuals might, say, save or invest could (rather crudely) be depicted as follows (click to enlarge):



or this:

In this environment it's an incredibly brave yet foolhardy commercial decision for any business to ignore Twitter. It may as well reach for the Webley now.

Hey, we have the Webby Awards honouring excellence on the Internet.. how about the Webley Awards for businesses that don't get it?