People I know who work on Wall Street often have two phones (one for personal, one for professional use) and limited access on their work computers to any website that hasn’t been completely vetted. Security and privacy are paramount in the financial industries for obvious reasons, including regulatory.
Twitter, Facebook, and Linked In are pervading every other industry but what about the money sector? This week, New Tech City checks out how investors and banks are dealing with social media.
I talked to Mark Schwanhausser, an analyst with Javelin Strategy and Research, who studies the ways banks are (or aren’t) using new technologies. We talked a lot about how banks are (slowly) adapting to social media and being more proactive about their relationships with customers.
But when a financial entity starts working in a “social” space, it comes up against those two issues: privacy and security, BIG time.
So why do they even need to bother with social media? And at what point does the consumer say, you know, it’s unnecessary and I’d prefer to keep my money out of my social media, please?!
Here’s Mark Schwanhausser’s response to tech skeptics:
“What we know about Americans is they like choice. If you give them another choice, somebody’s going to take you up on it. And if there are enough people taking you up on it, banks are going to jump on it (too). Social media is too big to ignore. There are too many people walking around with Facebook, twitter, et cetera, monitoring that stuff all day long without banks saying, ‘Are we missing something? Are we not listening to the conversation? Should we be there?’ And the answer is yes they should.”
In the ‘80s, I remember how amazing it felt to get cash any time once my bank put an ATM on Nassau Street, in my hometown of Princeton. 20 years later, I started doing my banking online. In the past year, I’ve been using a banking app on my phone. I’m not quite comfortable with taking pictures of my checks and depositing them by phone but I know that’s the next step (even though my son loves going to the bank for the free lollipops).
One day we may even be doing our banking on Facebook. But Schwanhausser says that technology (which is being tried out in South Africa) won’t come to the U.S. anytime soon. American consumers, he says, aren’t mentally ready to combine their personal and financial lives like that…yet.