For sale: one economy, slightly used

In a couple of previous posts (here and here), I’ve written about the effects I expect to see social media have on the financial services industry – particularly retail banking and insurance – this year. The reason I expect to see companies in the industry explore social media is the need to re-establish themselves as being trustworthy by interacting with their customers in an open and trustworthy way – something social media can be perfect for (See Christophe Langlois’ discussion of VanCity’s “Change Everything”, for example).

However, there is a deeper question to ask concerning not just how financial organisations regain trust, or even how to regulate their behaviour to avoid a similar crisis in future:  the question is whether our current economic system is set up to achieve the right objectives at all. My previous posts contained links to some articles exploring this theme, but Umair Haque at the Harvard Business School has just posted a much more direct call for a “Smart Growth Manifesto” on his blog.

Umair’s post echoes a special issue New Scientist magazine ran back in October on the theme “the Folly of Growth”. Articles in the magazine argued that current expectations of continuous economic growth (a trend that, until now, has withstood periodic recessions) cannot reasonably continue, on the following basis:

  • Each dollar of GDP value can be associated with an estimate of the resource consumed in its creation.
  • Even assuming a relatively modest rate of future growth, at the current level of resource usage / $ of GDP, and at the current level of reduction in that figure, we will rapidly run out of resources.
  • If the expected rate of growth is increased to reflect one of the benefits of growth often cited by free-market economists – i.e. an improvement in living standards in emerging and developing economies driven eventually by growth in developed economies), then we run of resources incredibly fast.

One of the New Scientist articles went on to calculate an answer to the following question: if we want to drive economic growth at that level, how much more efficient do we need to become at utilising natural resources to achieve it?

The answer (based on their assumptions) was frightening: 5 times better to achieve modest growth; 50-100 times better or more if our goal is to lift the entire world to an equivalent standard of living to that enjoyed in today’s United States.

There are, of course, a huge number of assumptions behind those figures, not to mention questioning the basis on which “standard of living” is measure (i.e. to what degree is the quality of life of someone in the U.S. or anywhere else determined by their consumption of economic or environmental resources?).

However, to me the message is clear, we must be driven by goals that are not entirely based on monetary growth. As individuals, of course, that’s true already (Mr. Madoff and his like excepted); what we need to see now – as Umair has pointed out – are economic systems that reflect that.

This week’s reading: the future of banking

I’ve been spending time recently speaking with clients and colleagues about the ways in which some of our banking and finance customers might seek to exploit technology this year in the wake of the credit crunch. The Finanical Services blog, FSA and others are predicting a string of measures to reduce costs and implement compliance to new regulatory requirements – all of which will involve expenditure on technology. Some of the same sources are also predicting a simultaneous exploration of social media or other innovations exploiting new technology aimed at re-building trust with consumers and increasing business in new channels.

I’m expecting to see both those things happen, and hope to help some of my customers along the way. Here are some of the articles I’ve found interesting in that area this week:

How to Tweet

I recently encouraged a family member to join Twitter; she gave it a try but couldn’t really figure out why I’d been so enthusiastic about it. That’s a feeling I remember having when I first joined Twitter something over a year ago – it took me a while to get used to a new way of communicating. So I started to tell her about some of the ways I’d eventually started using Twitter that resulted in me finding it such a useful tool.

For what they’re worth, here they are – if you’ve never tried Twitter or are new to it, I hope you’ll find them interesting.

0. Why tweet?

Like any good techie, I’m starting at 0, not 1 … and with something important: why Tweet? There must be a good reason, or so many of us wouldn’t be doing it so much. I think of Twitter as a global “over the partition” conversation. Years ago I worked in an office with partitions with a group of people who did roughly the same thing I did. Several times a day, someone would find something interesting on the web, fancy a coffee or just plain lose their rag with a malfunctioning piece of code … and say something about it. There’d be a brief conversation – sometimes informative, sometimes not – and then we’d all go back to what we were doing.

Nowadays? I can’t remember the last week I was in the same office two days in a row – except my home office of course. Often I’m in different cities or even countries on consecutive days. I work – and socialise – with an identifiable network of people, but they’re busy doing their own thing wherever they happen to be.

So I tweet them. Because by tweeting them I can reach them wherever they are; because they can decide whether to pay attention or not; and because there’s the potential for people I don’t know to overhear the conversation. I’ll explain what I mean by “overhearing” in points 2 and 3 further on.

So that’s the why of it, for me anyway, now here’s the how …

1. Say what you do

Twitter is blogging on a small scale – so fundamentally, just like blogging, it’s about letting people know what you’re doing – or what you’re reading, or what you’re thinking. So get started – whenever you pause for thought in your day, consider tweeting what’s on your mind. Someone, somewhere, might find it interesting.

2. Follow Twitterers in your network

You have to start somewhere, so start with who you know. Use the registration tools to find your e-mail contacts, or use the “Find People” search to look for people by name. More than likely, you were introduced to Twitter by a colleague, friend or contact so look them up and look at the people they follow. You’re likely to find people you know, or people who might be interesting to you.

3. Search

Most tweets on Twitter are public, so in theory you can listen to whatever anyone is saying … so how do you find the people you don’t know that are saying interesting things? One way is to use Twitter’s search facility to search for key words or phrases that describe what you’re interested in – for example, “Social Media”, “Environment”, “USA”, “Kylie”. That’s one way to see who’s tweeting about the things you’re interested in. Several companies are taking this approach, and will respond to a tweet containing their name either directly or by following you – they’re doing this because they’re exploring how they can use Twitter to interact with their customers and employees, and with the marketplace at large.

4. Use connection services

To be honest, Twitter search is a fairly blunt tool for making connections. More interesting are services such as “Mr. Tweet” ( that analyse your Twitter connections and activity, and suggest people to follow. Alternatively, look at the replies your followers send to people you don’t know (i.e. messages containing @someones_name) and their re-tweets (i.e. a message they send starting RT @someones_name that indicates they’re forwarding a tweet from someone else). They’ll give you another link to people with whom you might share a common interest. Go look at their profiles and their tweets and perhaps start following them.

This should just about get you started. There’s a lot more advice out there, particularly if your interest in Twitter is concerned with it’s potential as a tool for personal and corporate promotion. I’ll leave that to others. But if you just want a few tips to get started, I hope this has been some help.

Happy tweeting,



The person of the year is you … again

My first week as a public blogger, and there’s plenty to get excited about as the convergence of Web 2.0 and banking continues. I find ING’s “We the Savers” site interesting, it’s a similar idea to the Cluetrain Manifesto, but as the name suggests concerned with responsible personal finances. Whilst I applaud the sentiment, as someone who has behaved responsibly in this area for some considerable time but has watched the value of their investments plummet in recent months, I can’t help but think individual consumers shouldn’t have been the only targets of this endeavour. I also think it’s a shame the site is US-centric – this is a global issue.

Elsewhere, the UK peer-to-peer lending site Zopa appears to be going from strength to strength according to finextra and others. Whilst the competitive investment and borrowing rates are obviously part of the appeal, the directness and transparency of the model is in my mind equally appealing as we all suffer from the effects of a failure to manage the risk of increasingly complicated financial instruments.

We’ve been seeing the effects of social computing and user-generated content spread out from the internet community and drive huge changes in media, telecommunications and marketing particularly for some time now. Recently those changes have been starting to tell on more traditional organisations in other sectors. In the current economic climate, and despite the financial pressure those organisations are seeing because of it, my sense is that that trend will only accelerate.

%d bloggers like this: