Social Networks Archives - Page 2 of 3

Merging Online and Offline Channels via Twitter

By Jim Bruene Posted on April 13, 2009
Categories: Branch Banking, Channel Integration, Social Networks, Twitter

I’ve gradually come around to Twitter as both a communications and research tool. A year ago it could have been dismissed as a niche platform for a few hundred thousand hyper-social geeks. But now that adoption has tipped, with 14 million users last month (see chart), the power of the network is opening up new opportunities.

My favorite: Tweeting bakeries (note 1). A British company, Poke, has developed a little box that sits behind the counter at a bakery. Whenever a new batch of rolls or pastries is ready to serve, the baker turns a dial to the specific item and presses a button. That automatically sends a pre-programmed Tweet to the bakery’s followers. It’s called, appropriately, BakerTweet.

Bank opportunities: Unless you merge operations with a bakery (maybe not such a bad idea), financial institutions have nothing nearly as exciting to Twitter about. However, there are useful items a branch could broadcast to its followers:

When the drive-thru lane was empty (or vice versa)
When branch queues have disappeared (or vice versa)
When platform officers are available
When specific specialists are available in the branch (e.g., home loan officer, small business banker, investment specialist)
When certain popular employees are working (could be tweeted to just the followers of that person)
Branch special offers
Local community events and specials

And if you really want to gain some global recognition, enable payments for the baked goods via Twitter (see TwitPay). For example, users could respond back to the bakery’s tweet with:

@bakerytweet hold 2 chocolates pay $2.45 via @twitbank

Assuming users were registered at BakeryTweet and Twitbank, that’s all it would take to order and pay for two warm rolls (note 2).

Notes:
1. Kudos to Springwise for finding this idea here.
2. Yes, there are fraud, privacy and reliability issues to work through, but as long as purchases are kept under a certain floor, the exposure would be minimal.
3. See also the Harvard Business article last week (9 April 2009) by John Sviokla, Twitter: A Marketer’s Duct Tape.

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LinkedIn Users Prefer Online 8 to 1 Over Mobile Banking

By Jim Bruene Posted on April 1, 2009
Categories: Market Research & Metrics, Mobile Banking, Social Networks

In a completely unscientific poll of 123 LinkedIn users I conducted about two hours ago, I found they overwhelmingly prefer the online channel over all others when accessing bank transaction data (see notes 1, 2, 3).

I was expecting mobile to be higher. But unless you have a new-generation smartphone and your financial institution supports mobile, it’s unlikely to be your first choice. So given that mobile’s only been widely available in the United States for about a year, a one-in-ten preference is a strong start.

I also expected a bit more interest in the other choices: ATM, voice and social network, which only drew 3% of responses in total. Social networks went 0 for 123, showing that it’s not yet viewed as a place to review financial data (note 4), at least among LinkedIn users. In a much differently worded poll of Facebook users a year ago, we found that 13% willing to view their bank balance within the social network.

Q. All else being equal, how would you prefer to access bank transaction data?

Source: Netbanker/Online Banking Report poll of 123 U.S. Linked:In users who self-selected to respond to poll while logged in to Linked:In; fielded between 1 and 2pm on 1 April 2009 using in-network polling tool.

Notes:
1. The question is strictly limited to 75 characters, I couldn’t make it as precise as I would have liked. For instance, I would have like to add “assuming its secure” and “your personal” to “transaction data.” It’s possible some respondents were thinking more about global banking data than their own personal transactions. The poll also displayed “by Jim Bruene, Owner, Online Banking Report” in the lower-left, potentially biasing results.
2. LinkedIn users are given opportunities to respond to polls while logged in to the service. There is no financial benefit to taking the survey, but they do get to see results after taking it.
3. There were significant differences based on demographics, for instance women were almost twice as likely to select “mobile.” And zero men, and 4% of women, chose voice call as the preferred method. But due to the small sample size, these demographic breakdowns don’t hold much weight. There also appears to be some mathematical errors in the demographic splits, so I’m not going to cite them further until Linked:in cleans up it algorithms.
4. An interesting result, given the poll was conducted within a social network among social network users. Actually, “the branch” beat social networks, drawing one “write-in vote” in the poll comments (it was not one of the five choices).
5. For more info on mobile banking see our latest Online Banking Report on Mobile Banking 2.0 — iPhone Edition.

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Small Business Networks from American Express, Capital One, Advanta, Bank of America, QuickBooks, and HSBC

By Jim Bruene Posted on June 26, 2008
Categories: Advanta, American Express, Capital One, HSBC, Intuit, Small Business, Social Media, Social Networks

Earlier this week, Visa launched its Facebook Business Network. While the first to use Facebook, several other major financial institutions have opened small biz networks on the Web in the past six months:

Advanta’s Ideablob launched last September at DEMOfall (previous post here). It’s a unique website with monthly contests awarding $10,000 to the best idea, as voted on by users. It’s an intriguing concept with decent traction, almost 30,000 unique visitors last month according to Compete (see chart below). (Full disclosure: I just realized I’m wearing an Ideablob t-shirt; schwag can still pay off!)
American Express’s OpenForum: As the name suggests, it’s a business forum and resource directory, not unlike Bank of America’s (see below). American Express has added posts from several prominent bloggers such as John Battelle’s Searchblog and Anita Campbell’s Small Biz Trends to keep the site fresh. The site has 5,400 members and monthly traffic of about 11,000 unique visitors, up threefold from a year ago.
Bank of America’s Small Business Online Community, a general forum and resource directory, launched in October 2007 (see original post here). It’s primarily a forum, with some additional articles on the side. Total membership is just under 15,000.
Capital One’s Slingshot, launched in February, is primarily a business directory. But it does aim for community involvement with user-submitted business reviews and comments on certain topics.
HSBC’s (UK) Business Network: Another forum-and-blog site similar to AmEx’s OpenForum. So far it appears lightly used, with just six blog entries this year and 270 member profiles.
Intuit’s Quickbooks Group: Although not a financial institution, the Quickbooks site is a good example of an active community with more content, including ten blogs, and as much traffic as the others combined (not including BofA which is unknown) with nearly 90,000 unique visitors, almost double the number a year ago.

Unique website visitors in May 2008 (source: Compete)

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GreenNote Introduces P2P Student Loan Hybrid: Virgin Money Meets Facebook with a Dash of Prosper

By Jim Bruene Posted on June 5, 2008
Categories: GreenNote, P2P Lending, Social Networks, Student Loans

This week two Finovate Startup alums launched the
services they demo’d a month ago at our conference:

June 2: CheckingFinder from FirstROI/BancVue
June 4: Friends & family student loan facilitator, GreenNote

We’ll start with GreenNote and look at CheckingFinder tomorrow. Although I’d seen the GreenNote demo, since it was in closed beta, I hadn’t had a chance to use it until earlier this week.

My first impressions are favorable. The site helps students reach out to family and friends to put together a “personal loan consortium” to finance educational expenses (also called a “pledge drive”). While GreenNote does not currently provide access to funds from outside the student’s own network of friends and family, the service does offer tools to solicit loan pledges via email. It also collects the resulting loan pledges from interested parties, then sets up and services the resulting loan.

The process:

Students solicit loan pledges from their network, and hopefully the networks of their network
Interested friends, family, or anyone else who’s received a loan request from the student (either directly, or through forwarding) create a GreenNote account and make loan pledges (minimum $100)
Once the loan is funded (minimum $1,000, no maximum), GreenNote verifies enrollment, collects the money, and packages it into a single loan agreement with the student
When it comes time to repay the loan, lenders can choose to forego the principal and/or interest and gift it to the student; lenders will also be able to lower the rate

The terms:

Loans are deferred for up to five years while the borrower is in school, then initiate a six-month grace period before repayment begins
Interest accrues during the deferment period
Repayment is over a 10-year period, meaning that lenders must commit their money for 15 years
The rate is currently 6.8% fixed, but GreenNote takes 100 basis points of that, so lenders receive a 5.8% return (which they can elect to lower at repayment time)
GreenNote charges a 2% loan fee at funding, with a minimum of $49

Coming soon:

Allow third parties to browse loans they might want to fund (e.g., alumni)
Facebook integration

Analysis
At first glance, it looks like an expensive way to put a nice wrapper around funds that have already been made available by the student’s family. And certainly, if moms and dads are providing the bulk of the cash, it’s not necessary to pay 2% for a promissory note. For most loans, you can do that for less at online paperwork specialists such as Virgin Money or LoanBack.

However, the power of GreenNote’s model is tapping into the friends of friends, and the friends of those friends, and so on. As a student puts together an email pledge drive, recipients are encouraged to pass the request on to appropriate parties who might be willing to participate. For example, Pat who is headed to Michigan State, knows Jon whose uncle is a successful alum of the school. Jon’s uncle, who’d be highly unlikely to simply write Pat a check, might be very interested in putting a few thousand dollars into a long-term 5.8% deposit that earns him a fair rate of return and helps someone go to Michigan State.

GreenNote is well thought out and well implemented. The main problem though, is finding enough deep pockets willing to put thousands of dollars on deposit for up to 15 years with no guarantee of repayment.

Financial institution opportunities
Lenders have taken some heat recently as they’ve cut back on student lending during the credit market turmoil. A bank or credit union could gain some positive PR by facilitating this type of lending among their own customer base and community. It could be built from scratch or potentially in partnership with GreenNote.

Background
GreenNote is backed by Menlo Ventures, among others, and has an impressive board and advisors including prolific blogger and partner at Glenbrook Partners, Scott Loftesness. Bill Harris of Intuit, X.com (now PayPal), and Passmark (now RSA) fame is on the board. The launch was covered this week by TechCrunch, VentureBeat, and C|Net among others.

GreenNote homepage (5 June 2008)

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New Online Banking Report Published: Social Investing Communities

By Jim Bruene Posted on May 12, 2008
Categories: Investment Products, Online Banking Report, Social Media, Social Networks

The latest research from our Online Banking Report division is now available. It’s a double issue (#152/153) released today entitled:

Online Investing Communities: Will social networking revolutionize saving & investing?

We believe social networking will eventually play a large role in online investing, and evidently we are not alone. We found 54 companies involved in investment-information exchange and only six of those have monthly traffic of 100,000 or more.

So, while we like the idea, it will take awhile to catch on. Only about 25% of the U.S. population owns individual stocks, and only a small subset of those make a trade every year. Furthermore, the prime social networking demographics, those younger than 35, are less likely to own or follow stocks. As a result, we project that it will be well into the next decade before adoption passes the 10% mark.

In preparing the report, we asked 400 U.S. online users their thoughts about the idea of sharing investment info in a social network setting setting such as Zecco Share or Motley Fool CAPS (see note 1). While there was a decent amount of interest from the under-30 group, 30% were somewhat or very interested, the overall enthusiasm for the idea among all U.S. adults (21+) was only 22%. See the full report for more research results and the resulting 10-year social investing forecast.

About the report
Subscribers may download the report here as part of their annual subscription plan. Others may purchase it here. The printed version will be mailed to subscribers later this week.

For more information read the abstract here.

Note:
1. We asked U.S. online users for their opinions about social networking for investment information (fielded April 18-19, 2008, n = 401). The top-level results are including in the report. For more detail, All-Access subscribers may download a complete summary PDF document of all questions and answers or download an Excel file of the raw data. In addition, All-Access subscribers may use our online research tools to run their own cross-tabs and filters on the dataset. The dataset will be available next week through subscriber accounts at OnlineBankingReport.com.

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Prosper Helps Borrowers Tap the Value of Their "Social Capital"

By Jim Bruene Posted on February 25, 2008
Categories: P2P Lending, Prosper, Social Networks

This morning I was at the Parc55 Hotel in San Francisco to hear Prosper CEO Chris Larsen's "state of the union" address at his company's annual user meeting, Prosper Days. I've heard him speak four times in the past year, and I learn something important every time (see note 1).

The highlight today was an analysis he unveiled showing the performance of loans made to borrowers who've been endorsed by friends and family. About a year ago, Prosper added an important social networking feature that allows friends and family of potential borrowers to post endorsements. Even more important, Prosper shows whether the friend has put their money where their mouth is and made a bid on the loan (see screenshot below; note green number in upper right showing the amount of the bid made by the endorsing friend).

Analysis
The theory is that the social endorsement(s) will have two important benefits:

Help lenders identify quality borrowers
Provide borrowers with more incentive to repay the loan so as not to disappoint their endorsing friends

The first year's worth of data are in and the results are promising. The loans with higher social capital (i.e. endorsed by and bid on by friends) are performing significantly better so far:

Loans with a single friend bidding on the loan are performing 35% better than similar loans without that endorsement
Loans with multiple friends bidding are performing 50% better

Because Prosper makes its loan performance data public, investors will be able to track the value of these endorsements over time. If it turns out that endorsements do correlate with better long-term loan performance, loan rates will be bid down accordingly, and the borrower will capture the value of their social capital/reputation through lower loan rates. Already, the rates to these endorsed borrowers are running 10% lower.

Lenders can even search on these so-called "social elements." Prosper's advanced search includes 43 searchable fields, four in the social area (see screenshot below).

Note:

1. Prosper will be demo'ing their latest platform improvements at our upcoming FINOVATE Startup conference (previous coverage here).

2. For more information on Prosper and person-to-person lending, see our Online Banking Report, published in December.

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Facebook Battle: Students 1, HSBC 0

By Jim Bruene Posted on October 5, 2007
Categories: Facebook, HSBC, Public Relations, Social Networks

My teenage son has just starting "Facebooking," and he loves it. It's his first foray into social networking, and I can tell he'll be a user for the rest of his life, or at least until something better comes along.

Those of us who are merely parents of social network users often find it difficult to understand its power. In my son's circle, Facebook IS the Internet. It's where every online session begins and ends and where important social connections are made and nurtured. That's why strategic investors such as Microsoft, Google and others are said to be giving Facebook as much as a $10 billion valuation (see previous coverage here).

All this has enormous implication for every retailer and service company on the planet. It amplifies word of mouth exponentially. Remember the old adage that every disappointed customer tells 10 people about their problem. With the instant broadcasting capabilities, an unhappy customer can now share his/her thoughts with 100+ Facebook friends with a single click (note 1).

And it's not something that is 15, 10 or even 5 years away. It's happening today. Case in point: this summer HSBC (UK) was forced to reverse a policy change that would have ended a common perk for U.K. student banking accounts, a multi-year grace period for overdraft credit lines with limits up to US$3,000 (see HSBC student page here).

Local students were so taken aback by this change in account terms, they formed a Facebook group called, "Stop the Great HSBC Graduate Rip-Off" (here or see screenshot below). Apparently the group was planning to rally its 5,000 members into a little civil disobedience. The group was hoping to cause customer service headaches by flooding the bank's branches, and overloading teller lines, with student customers asking for detailed explanations of the new fees.

According to news reports (here and here), the bank quickly backed off the rate change and reverted to the liberal interest-free borrowing guidelines.

Implications
You should be using, tracking, analyzing, and brainstorming about how to tap social networks for sales, marketing, service, and recruitment.

Note:

1. And the simple click-and-complain activity can be broadcast to every friend before the disgruntled customer has a chance to cool down (and/or sober up) and think through the issue in a more rational way.

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The Aging of Facebook Makes it a More Appealing Platform for Financial-Services Firms

By Jim Bruene Posted on July 13, 2007
Categories: Facebook, Metrics & Market Research, MySpace, Social Networks

Due to Facebook's roots as a college-only social networking site, as recently as last year you had to use a .edu email address to gain admittance, it has remained a young person's playground much longer than MySpace. However, much to the chagrin of my college-age niece and her friends (note 1), Facebook has aged rapidly this year.

As you can see in the inset, in May, comScore reported that more than half of Facebook visitors were 25 or older (see full press release here and note 2). Using this chart, we estimate the median age of a Facebook visitor was about 23 a year ago and now it's closing in on 30 (I'd guess 27 or 28 based on the comScore data). Even more frightening for the younger set: last month there were 2.6 million more unique visitors over age 35 than in the 18-24 category. We noted this trend at MySpace last year (here).

Significance for Banks
As you consider your social networking strategy, don't think it's only for the under-25 crowd. Some of your prime customers, the 30-somethings with new families, new cars, new homes, and accelerating careers, also keep in touch with friends via social networks. Refer to Online Banking Report, Social Personal Finance, for a long-term forecast and strategic options for financial institutions. Also, see our earlier post on the Top-10 Banking & Money apps on Facebook here.

Facebook Lingo Defined
For those of you new to Facebook, Ad Age ran a sidebar off its lead article this week, This 23-Year-Old has Google Sweating, explaining a few key Facebook terms:

Minifeed: Like an RSS feed, that automatically updates everyone on your friends list of any changes you make to your profile, including removing items. This feature caused a bit of a revolt, due to privacy issues, when introduced last year. But now it seems to be an important part of the network. It's especially critical for the viral spread of new applications such as Lending Club or Chipin. Unless they opt out, every time a Facebook user adds an application to their account, all their friends are notified in the mini-feed.
Poke: The virtual equivalent of smiling at a co-worker passing in the hallway; a way to connect with someone without the more formal protocols of email, text, or voice messaging.
The Wall: A place to write comments on your friends profile, or respond to comments on yours.
Tag: Allows users to associate names with the people in the pictures they've posted. As Ad Age says, "a college grads worst nightmare when it comes to the ever-crucial job search."

Notes:

1. This summer, my niece, a college sophomore, couldn't believe that I had a Facebook account. And she was more than a bit skeptical of my claim that I was tracking the social network for my blog and newsletter. To her, it's a privileged place for her friends to communicate: uncles, aunts, and especially parents, are definitely not on the invitation list. It will be interesting to see what happens to the hip kids as the establishment invades their turf. The Wall Street Journal had a similar story this week about fellow workers and even bosses requesting to be added as friends in social networks (here).

2. comScore is reporting the demographic profile of visitors, NOT the active-user base, i.e., those that maintain profiles. Active users would undoubtedly skew younger.

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Top-10 Facebook Money & Banking Applications

By Jim Bruene Posted on July 13, 2007
Categories: Facebook, Personal Financial Management, Social Networks

After six short weeks, there are 48 applications in Facebook's Money category. At Netbanker we are most interested in the 14 directly related to banking, payments, and lending. So here's the most-used list with the stock trackers, calculators, and shopper apps removed. Lending Club continues to lead the pack as it has since its May 24 launch in conjunction with the new Facebook platform. Applications are listed by number of Facebook users that have added them to their profiles.

Top 10

1. Lending Club by Lending Club >>> 11,012 users

Lending Club enables those in the Facebook community with good credit to easily borrow from each other with a trusted third party managing the process and assessing the risk. Previous coverage here.

2. Fantasy Banker by Prosper >>> 4,674 users

Prosper bills Fantasy Banker as a twist on HOT or NOT, "a fun & educational way to get acquainted with person-to-person lending by betting on whether real-life Prosper loan listings will fund or not." Previous coverage here.

3. My Bucks By Aryeh Goldsmith >>> 3,926 users

A virtual currency called the Facebuck.

4. BillMonk (Obopay) by Charles Groom and others >>> 2,793 users

BillMonk is an expense tracker specifically designed to track debts and obligations (such as rent) between individuals. Used Facebook APIs long before the F8 platform was announced. Previous coverage here.

5. Buxfer by Shashank Pandit and Ashwin Bharambe >>> 1,482 users

Buxfer is another expense tracker specifically designed for singles sharing households expenses. Previous coverage here.

6. Pay Me by Yellow Media >>> 842 users

Pay Me was developed by a third-party developer to make it easier to initiate PayPal payments right from Facebook. Previous coverage here.

7. ChipIn by ChipIn >>> 830 users

ChipIn is a simple way to collect funds for an event, trip, or anything. Users create a clickable badge that is displayed in their profile. Other Facebook users chip in via the PayPal network. Previous coverage here.

8. PayPal by PayPal >>> 500 users

The official product from PayPal, the division of eBay. So far, merely allows you to easily request money from your Facebook friends. More functions are said to be on the way. Previous coverage here.

9. Ven by Hub Culture >>> 154 users

Another virtual currency.

10. iSpend by Reman Child and Shawn Gupta >>> 141 users

A new financial tracking app posted last week.

The Rest
11. Wesabe by Wesabe, Inc.
>>> 104 users

The Wesabe Facebook app currently supports group discussions. It is not currently linked into its Web-based personal finance app. Previous coverage here.

12. OmniSpense.com by Jonathan Kelly >>> 60 users

The newest expense tracker, appeared in the money category in the past 48 hours, but looks like it may have been posted about 2 weeks ago.

13. BillTrack Bill Reminder by Michael Irizarry >>> 59 users

Bill Track is built specifically for tracking bills (surprised?). It was posted earlier this week.

14. My ViCu by Myvicu Master >>> 17 users

Yet another virtual currency.

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PayPal Launches on Facebook: Who Wants to be the First Bank?

By Jim Bruene Posted on June 22, 2007
Categories: Facebook, Lending Club, MySpace, PayPal, Personal Financial Management, Social Networks

The social networking phenomena has entered a new phase: eCommerce. It has always been a bit hard to visualize mainstream businesses, like banks, book sellers, or phone companies making a profit on MySpace. It's been a great place for musicians and online dating companies to grab market share, but a MySpace Checking Account didn't seem just around the corner (see MySpace coverage here).

All that changed May 24, when Facebook opened its network to outside developers, making its service more like Windows than MySpace. Already the service has grown by 3 million users, more than 10%, in the past 4 week, to 27 million (see Facebook profile in today's Wall Street Journal).

More interesting are the 893 new services have opened their doors on the platform. The most popular, Top Friends by Slide, already has 6.4 million users. Yes, that is no typo, in one month a Facebook service grew to more than 6 million users. With traditional marketing, it would have cost a bank or card company as much as $1 billion to attract that many customers assuming acquisition costs of $100 to $150 per new account.

And it's not just the one app. A new Seattle-based music preference service, iLike, has added 3.8 million. There's not a whole lot happening in commerce apps YET, the first financial company with a service offering, Lending Club (see previous coverage here), is the most popular business app, with just under 10,000 users. That's about what iLike attracts in a busy hour, but for a financial services company, and especially a startup, that's huge, a grand slam using tired baseball metaphors.

For many reasons, it takes longer for traditional companies to pounce on new opportunities. But over the summer we'll start seeing hundreds of businesses launch on Facebook. By next year at this time, the Facebook apps directory will probably look like the New York City Yellow Pages (or at least San Jose).

Financial Institution Opportunities

Searching the site, we only see four financial services that have launched on Facebook:

Lending Club's person-to-person loan marketplace
Prosper's lending game
Wesabe's personal finance groups
Pay Me, a payment service developed by Australian Ad Agency, Yellow Media using the PayPal engine (screenshot below, we'll provide more details once we finish testing it)

But so far there is no:

Bank
Credit union
Credit card issuer
Mortgage lender
Brokerage (although there are several stock monitoring service including Forbes, Yahoo, and Social Picks)
Rates tracking service
Credit report monitoring service (though Identity Guard is advertising heavily today)
Identity theft protection service

Let the race begin. But you better move faster than you've ever moved before, if you want to get the huge first-mover advantage on the Facebook platform. Good luck.

For more information, see our latest Online Banking Report, Social Personal Finance.

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