First Direct CEO Matt Colebrook answers your questions

October 4, 2010

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

In an article on 21 September, Matt Colebrook discussed the role of social media in banking, arguing that social networks are key for customer service as they enable customers to use and interact with banks whenever they want and from wherever they may be.

Below are the questions filed in response to the article and Colebrook’s answers.

Question: 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 that 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? – DanMux

Answer: My comments around banks and social media were based on our looking at things from a consumer point of view. People talk about the things that affect their daily lives and of course finances are a part of that. Maybe creating conversations wasn’t the right way of phrasing it, but being there to engage in them – certainly. Our social media programme is all about trying to open up the bank so that our customers can engage with us in the way of their choosing. This was the essential innovation at the core of first direct from the outset, in fact the whole bank was founded on a blank piece of paper with the word “customer” right in the middle.

To take your second point re: data security standards etc… The safety of our customers’ data is literally our number one priority. I like the idea of using open standards so that it’s easier for people to develop new ways of interacting with the bank, but everything we do has to be looked at in the context of our cast iron promise to consumers that their information is safe with us.

Question: 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 an 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 no tweets. This doesn’t stop me and others from “talking” to them.
Good on them. – crm911

Answer: Firstly, we’re UK based and only service a UK audience so it’s no surprise we haven’t shown up in your networks. You’re absolutely right about being where your audience is though and we go through a number of stages to make sure we’re there. Our most developed social media presences are our newsroom, twitter presence and our customer-only recommendations network “little black book”.

We also do a lot of monitoring, particularly of blogs, forums and twitter where we can immediately respond to conversations if they concern us, or if we think we can add something. I understand your point about conversation starters but I think that often, in these circumstances, it’s better to see where you can add value to the conversation before jumping in. We create a lot of content through our various financial, sponsorship and charitable activities and where that kind of content can add value to a debate or a conversation – that’s where I see the opportunity to engage.

A final point on this – a lot of what we do on twitter is about monitoring for people with customer service issues. Whilst we don’t use twitter as a customer service channel yet, don’t think that just because we haven’t engaged publicly that we haven’t seen and responded to a given issue. We watch the internet very carefully for people with customer service issues and always try to help out our customers in any way we can.

Question: 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 – radicalman

Answer: Wow – living up to the name! I disagree, I think that safe, secure, regulated financial institutions are a good thing and will keep on being so. Re: your idea that social dialogue with a bank is ridiculous – I think that depends on your definition of the word “social”. Don’t get me wrong, we’re providing a service for, not going for a drink with our customers, but within that relationship, providing the best possible customer experience shouldn’t be limited to any given set of channels. We need to go wherever the customer wants us to, and if that is into networks that are ostensibly “social” then so be it.

Re: the expensiveness/inefficiency of the system, again I’d disagree. Expensive and inefficient things tend not to survive. The basic model of banking however has been around for hundreds of years. It provides economies of scale, safety in numbers and a place for individual expertise to flourish. I can’t see that disappearing.

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

Answer: Our frontline staff are the single best part of first direct. They are some of the best trained, most able, most motivated and friendliest people in the industry and we’re immensely proud of them. We are looking at, and indeed have started, incorporating elements of social media engagement into the things that our staff are expected to do on a daily basis. For example, we now have a team of people monitoring and responding to questions on talking point, our consumer forum.

The thing is, whilst we can find problems using social media, we then need to focus on an individual problem to solve it. This kind of one-to-one engagement and attention are what our customers really value, so obviously it’s what we want our front line staff to focus on.

Question: Can we have near zero fees & charges for small business a/c’s ?

Answer: Sadly we can’t help you there, as we don’t yet offer a service to businesses.

Question: Firstly banks need to sort out security/identity, [what is being done?]

Answer: A lot would be my answer, but as to whether I can be specific is another matter. The security systems of banks are hugely sophisticated and based on a multi-layered approach.  I can reassure you that these are being upgraded and improved every single day because the fraudsters also become more persistent and sophisticated every single day.  Customers who are the victims of online or mobile phone crime are covered for their losses but in return we do ask that customer take every possible measure to protect themselves and their personal details.

Question: When will banks start lending money more widely and at fairer rates and stop taking too much for themselves?

Answer: I can honestly say that during the crisis First Direct and HSBC have continued to lend, in fact to the point where we’ve increased our mortgage market share from 0.5% to 3% since 2008 (8% for HSBC).  In terms of value for money, we’ve also been consistently in the best buy tables for the last two years.

As for the wider banking market it will take time to get over the trauma of the last two years.

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