Why People Trust the Crowd More Than They Trust Banks
Book: Bank 3.0: Why Banking Is No Longer Somewhere You Go But Something You Do Author: Brett King ISBN: 978-1-118-58963-2 Publisher: Wiley (2013)
Chapter 8 of Bank 3.0 has a title that pretty much says everything: “I Trust the Crowd, More Than I Trust the Brand.”
When this book was written, banks were still figuring out if they even needed a Facebook page. Some were actively deleting negative comments from customers. Others had banned employees from using social media at work. One major European bank told King directly that it “didn’t believe in social media.”
That’s like saying you don’t believe in the weather. It’s happening whether you believe in it or not.
Social Media Wasn’t a Fad
King gives a quick history of social media, starting from the Bulletin Board System in 1978 all the way to Facebook’s billion-user milestone around 2012. The pace of it is still wild to read about.
Facebook launched in 2003. MySpace was the big thing. News Corp bought MySpace for $580 million. Viacom offered Zuckerberg $75 million for Facebook. He said no. Then Yahoo offered $1 billion. He said no again. By 2007, Facebook had already passed MySpace in monthly visitors.
Twitter broke the news of the Hudson River plane crash two minutes after it happened. It spread word of the Iranian election protests. Barack Obama used social networks to raise $55 million in 29 days while John McCain raised $11 million through traditional fundraisers.
By the time King was writing, Facebook was approaching a billion users. That would make it the third largest “country” in the world. Twitter was processing a billion tweets every four days. Pinterest was the fastest standalone site ever to hit 10 million users.
And most banks? Most banks were still debating whether any of this was worth their time.
The Five Stages of Social Media Grief
This is one of the best parts of the chapter. King lays out five stages that banks go through with social media, and it’s painfully accurate.
Stage 1: Total Ignorance. “Banking has been around for centuries. It doesn’t change.” Social media doesn’t even register.
Stage 2: It’s Just a Fad. “Let’s not commit any money yet.” Banks see it growing but convince themselves it’ll blow over. Like the internet was supposed to blow over.
Stage 3: Where’s the Money? Banks look at their competitors (who are also doing nothing) and decide that since nobody in the industry is making money from social media, there’s no point investing. They might have a Facebook page, but nobody’s managing it.
Stage 4: The Sonic Boom. The message finally breaks through. The bank hires a Head of Social Media. It’s probably a recent college graduate with a nice Facebook profile.
Stage 5: The Mad Scramble. The “oh crap” moment. Usually triggered by a PR disaster. Knee-jerk hiring spree. The CEO starts mentioning social media in press conferences.
Reading this in 2019, most banks have reached stage 4 or 5. But the description is still spot on for how slow institutions move when something new shows up.
What Happens When Banks Try to Control the Conversation
King tells two stories that show exactly how not to do social media.
First: Westpac in Australia. In 2012, Westpac raised mortgage interest rates without any guidance from the central bank. Customers were angry. They went to Westpac’s Facebook page to complain. Whoever was managing the page started deleting the negative comments.
That went about as well as you’d expect.
The press jumped on it. Headlines everywhere. “Westpac in Facebook Crackdown.” “Bank bashers united by social media.” “Dis-Like: Westpac the Facebook police.”
King’s point is sharp: a Facebook page isn’t something you own. It’s a community forum on a platform hosted by someone else. Your job is to talk, not to censor. Deleting complaints is like hanging up on a customer who calls to complain. Except now everyone can see you doing it.
Second: Ann Minch versus Bank of America. Her credit card interest rate jumped from 12 to 30 percent. She posted a YouTube video about it. BofA ignored her. The video got half a million views. Local media picked it up. Then national media. BofA eventually reversed its decision, but by then the damage was done.
King also mentions the BofA brandjacking on Google Plus. When Google launched brand pages, someone created a fake Bank of America page before BofA got there. It posted satirical messages about the bank’s practices. BofA had to go the legal route to get it taken down. If they’d just been ready with their own page, it never would have happened.
The pattern is the same every time. Banks think they can ignore social media or control it. They can’t. The crowd is faster, louder, and more creative.
Trust Shifted to the Crowd
Here’s the bigger idea in this chapter. It’s not just that social media is a new marketing channel. It’s that it fundamentally changed who people trust.
Bain & Company found that customers who engage with companies through social media spend 20 to 40 percent more money with those companies. They also gave those companies 33 points higher on the Net Promoter Score. That’s not a small difference.
Forrester’s Customer Advocacy rankings told a similar story. They asked customers if their financial provider “does what’s best for me, not just its own bottom line.” Credit unions scored around 70 percent. The bottom of the list? Bank of America, Chase, Capital One, Citibank, and HSBC, all scoring between 16 and 33 percent.
Only 29 percent of Europeans believed their banks acted in their best interests. That’s a trust problem. And social media made it visible to everyone.
King points to First Direct in the UK as the highest-advocated bank, with strong social media integration. Its parent company, HSBC, had no global Twitter account for customer engagement. Same corporate family, completely different approach to talking with people.
The lesson is clear. People don’t trust brands because the brand says “trust us.” They trust brands because other people, real people they know or follow, say the brand is worth trusting.
The Power of Influencers (Before “Influencer” Was a Job Title)
King talks about the early version of what we now call influencer culture. Justin Bieber got discovered through YouTube. A Chinese blogger named Han Han got 300 million views on his blog. Two sisters, Elle and Blair Fowler, built massive audiences posting makeup tutorials and shopping hauls on YouTube.
The comparison with banks is brutal. Bank of America’s best promotional video had about 12,000 views. A video called “Why Bank of America Fired Me” by a former employee had 453,000 views.
People listen to people. They don’t listen to corporate PR. That was true in 2012, and it’s even more true now.
Crowdsourcing: Let Your Customers Build Your Bank
The last section of the chapter covers crowdsourcing. Commonwealth Bank in Australia created IdeaBank, a platform where customers could submit and vote on ideas to improve banking. The winning idea came from a 22-year-old design student: electronic receipts.
First Direct in the UK did something similar with their “Lab” platform. DBS Bank in Singapore ran a contest called “I-Designed-A-Bank” and got over 80 design entries, mostly from people under 26. The result was a redesigned branch called DBS Remix.
OCBC in Singapore went even further and crowdsourced an entire youth-focused brand called FRANK. It became a cult hit with younger customers.
King’s argument is simple. If you want to know what your customers want, ask them. Give them a platform. Let them vote. The products and services that come out of crowdsourcing are already pre-validated because the people who will use them helped design them.
My Take
Chapter 8 reads like a warning that most banks got too late. Social media didn’t just add a new channel for marketing. It shifted power from institutions to individuals. It made trust something you earn in public, not something you buy through advertising.
The examples of Westpac and BofA are almost funny now because the mistakes seem so obvious. Don’t delete customer complaints. Don’t ignore viral criticism. Don’t let someone else claim your brand name on a new platform. But these were real decisions made by real banks with expensive communications teams.
The five stages of grief framework still works. Replace “social media” with whatever the next big thing is, and most banks will probably react the same way. Ignore it. Call it a fad. Ask where the ROI is. Panic. Scramble.
King’s core message holds up: respect the crowd. Talk to them, even when you mess up. Give them a voice. Because they’re going to talk about you whether you’re listening or not. And the brands that listen and respond honestly will always beat the ones that try to control the conversation.
The crowd has the megaphones now. It’s just a question of whether you’re part of the conversation or the subject of it.
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