Matt Colebrook on the future of banking

September 21, 2010

— Matt Colebrook is Chief Executive of online bank First Direct. The opinions expressed are his own. —

The 21st birthday of First Direct is as good a time as any to look back on changes within the financial industry and how it will continue to evolve.

The mercurial growth of the social web is something banks just can’t ignore. We’re now in the age where both the individual and consumer are empowered with a voice that can reach far and wide in a short space of time.

However, most fundamentally, social media is advantageous as a facet of banking customer service. Financial institutions are now presented with the opportunity to become accessible and direct like never before. Social networks and the new generation of smartphones enable customers to use and interact with banks whenever they want and from wherever they may be.

Looking to the future I think the chance to listen, learn and engage better with consumers via the social web is something banks must take notice of. People will expect unparalled levels of accessibility and banks must be able to provide a regular flow of interactive and easily shareable information for anyone who wants to access it. This is where I see financial institutions adding value to their offering; focusing on customer care and service; using social media to make this accessibility effortless.

The social web gives both customers and non-customers a voice; a place where they can be heard both by brands and each other. For us in the banking industry it provides the perfect arena; we can see ‘gripes’ and ‘niggles’ and whether these are collective or individual they allow us to source discontent, which provides food for thought in how we can make things better.

I think this will be the standard for the industry in the future; consumers working with us in order to help fashion our products and service. Whether the conversation is positive, negative or indifferent; as bankers, we must act upon it. It’s this feedback that will shape the way the industry works.

I think both the online and offline media will develop new niche needs, with many of them seeking rich content with a broader appeal; something varied to supplement the run-of-the-mill press release. Social media allows brands to provide this kind of additional content in abundance and I expect to see journalists demanding video, images, podcasts and feeds in order to create a more vibrant, easily shareable story.

At first, I have to admit I was a sceptic. In the minds of marketers, and indeed myself, social media carries fluffy connotations as it is often looked upon as something of a fad. Countering this, the question on the lips of every sceptic is ‘what’s the ROI of a social media strategy’.

In banking, we really have to define ‘return’; I’m a big advocate of our mantra; “banking’s better in black and white” as transparency, openness and honesty drive everything we do. Therefore, in regards to social media a bank’s ‘return’, shouldn’t necessarily be measured only in terms of monetary profits, but instead focused on increases in engagement, awareness and actions.

In the future I see social media within the financial sector creating conversation and hopefully some advocacy along the way. You never know; another revolutionary communication medium might emerge over the next 21 years for us to all get our cynical teeth in to!

Matt Colebrook will be answering questions from readers in a follow-up article on October 1. You can submit a question by leaving a comment below or sending it to our Twitter account (@reuters_co_uk).


We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see

Leave Business to run them selves and don’t interfere

Posted by GWRace | Report as abusive

As Matt rightly says customers want to access their bank when they want, but more than that they want to bank on their terms.

The quote ‘I see social media within the financial sector creating conversations’ – is a tell tale. It should be financial services as one small strand in social media. Banks need to stop thinking of themselves as so important, they must accept they are but one strand in the Y-Gen consciousness.

For financial institutions to be able to flow useful data and be part of the conversation, does Matt recognise they have to make a mental leap in terms of security models? – release read only API’s – use open web standard like oauth. Of course protect core assets and transactions, but let the data flow out, and see the value start to be added. Does Matt see that this shift is key to enabling the conversation.

Posted by DanMux | Report as abusive

I can’t agree with the above views. I have no idea in which country this First Direct is based, which is not my ignorance (being in Australia) but making a point that its presence in social media is not in my face. It doesn’t even rate a mention in my networks (mainly AU and US).

All businesses that sell to the masses need to be present where customers will notice them. If they are not present, they will have fewer customers. That’s all I see in this article.

Of course consumers of all ages want to do whatever takes their fancy. If they start a SM conversation about a brand, the brand should be aware of and be capable of joining the conversation. I agree that the social medium alone can’t “create conversations” — people do. There is nothing in the article suggesting that First Direct intends to bombard millions of people with conversation starters.

Being visible means that consumers have one more way to complain or praise a bank. Surely this is a good thing. My bank has a Twitter account but has sent 0 tweets. This doesn’t stop me and others from “talking” to them.

Good on them.

Posted by crm911 | Report as abusive

Why do we need banks at all for domestic transactions? Why cannot people be their own bank? The transfer of value is now so easy and efficient the banks have no part to play apart from supplying a central system. As custodians and administrators of our money banks are expensive and inefficient. But they do have a role as suppliers of credit. Social dialogue with banks is a ridiculous notion. Life isn’t like that. People vote with their feet.
Businesses need banks. Then dialogue is automatically generated.

Posted by radicalman | Report as abusive

Banks will be redundant within the next ten years. P to P lending will be mainstream. The internet has done a great job of disintermediation and the banks are he ultimate middle men doomed under the p to p model. They argue we need them to keep our money safe. Well firstly they dont actually keep our money in any physical state, and as far as safety is concerned they do not own the IP to security system far more secure than currently being deployed.

By 2050 banks will no longer exist as you know them today , and large co-ops with p to p lending structures will have totally replaced them with low trasnaction costs and higher rates of interest being paid to the lender as a result.

Posted by jdr | Report as abusive

If frontline staff successfully listened, learned and engaged better with consumers would social media be so important to First Direct?

Posted by goveyesnears | Report as abusive

[…] CEO, Matt Colebrook, has been talking to Reuters about how things have changed in the banking industry in the 21 years since they started, and how […]

Posted by First Direct & The Future Of Banking | Report as abusive

Interesting comments above from jdr (26/09) but perhaps a bit dramatic.

“By 2050 banks will no longer exist as they do today”. Did anyone actually think they would? Banks 40 years ago are unrecognisable from what is available today.

“Banks will be redundant within 10 years”. I don’t think so despite many people salivating at the possibility.

I am not sure that P to P lending will be “mainstream” in 10 years however I do agree that it will grow substantially over coming years to the point that banks will have to seriously consider the threat to its business.

My question to Matt is – How does he see P to P lending altering the way that banks do business? Will banks perhaps retreat into facilitating P to P lending to stay in the market but with a reduced margin?

Ian Rachwal

Posted by Ian_Rachwal | Report as abusive