Connect With a Web 2.0 Audience

The one area for improvement for the majority of banks is social media. Most financial institutions that are doing something with social media are simply dabbling with it. They're not tying it to a business goal -- they're looking at social media as the business goal. That's a mistake. Social media is probably the largest opportunity today.

Unfortunately, banks don't understand or don't know how to approach social media. The entire gamut of social media activities still is misunderstood or ignored. The banks that don't invest in social media are missing two big opportunities: first, the ability to listen -- knowing what's going on and what customers and the market are saying; and second, the ability to actively engage customers.

Look at Chase's September online banking outage, for example. The bank was unable to communicate with customers effectively. Meanwhile, it was getting bashed by the general public, who turned to social media either to look for answers or to express their frustrations about the problem. You can have all the IT resources in the company working to put your system online, but you're missing the backlash going on out there.

I can't think of a situation with a bank or financial institution where the current use of social media is potentially winning them loyalty or trust. Doing it right is all about tying it into the business goals of the firm. Social media touches all kinds of business goals. But it's kind of being treated as a standalone opportunity in banks.

It all speaks to a larger problem with the online channel. When you log in to online banking, regardless of whether it's a consumer or commercial account, the experience hits you like a ton of bricks. Think about the way the web has evolved for you as a consumer -- forget financial services. Think of things in your life that you use frequently -- whether it's customer reviews on Amazon, the rich experience of travel sites, the social features of Facebook; there are very few banks that have taken the step forward and have this kind of online banking presence.

Banks need to do a better job of emphasizing the customer experience online. This neglect of the online channel from circa 1998 to where we stand in 2011 represents a complete overhaul.