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Rebuilding Trust with Enterprise Social Networking
Banking is an industry built on trusted relationships. When trust in bankers declines, the industry suffers. Trust and confidence in banks suffered a tremendous blow in 2008. The corporate executives, who have been the principal clients of our banks, are heard openly worrying about the stability and reliability of the entire industry. Banks even lost confidence in each other.
Trust will be restored over time. But it will take years to overcome the recent memory of venerable centuries-old institutions vanishing as suddenly as they did in 2008. Reputation and brand won't carry the weight they did before the crisis. In this new world, where reputation is no longer enough to create confidence, people turn to trusted individuals.
A young unknown banker from an elite bulge-bracket institution who flies into town is no longer someone corporate executives are eager to meet. When uncertainty is high, executives want to hear from the bankers they already know and trust. This focus on relationships creates an opportunity for financial firms that can take advantage of every existing relationship they have.
To do this, financial firms need to be aware of each relationship between their bankers and the executives they know. However, relationships are harder to find and track than ever before. Layoffs, restructurings, new entities, acquisitions, divestitures and bankruptcies change the relationship landscape dramatically. And within each bank, it becomes more difficult to maintain the relationships that drive the business.
Embracing Social Networking Technology
In the last two years, more banking executives have started joining personal social networking sites such as Facebook and LinkedIn. For example, there are over 14,000 Goldman Sachs' employees who have created an account on LinkedIn. Not all of them are active, but for some it has been a useful way to dust off their Rolodexes and move them online. These sites have worked well for staying in touch with friends and colleagues and keeping them posted on personal and career activities and updates. These online networks, however, are used and accessed by individuals. The bank has no access to the networks of its employees.
To understand their collective network, banks have utilized CRM (customer relationship management) systems. Some of these systems have been successfully implemented, but these databases of contact information are now getting outdated with the increase in movement of people between firms. And no one, even in calmer markets, has time to track and update contact information for every person they know.
Introducing Social Networking Technology to the Workplace
At the same time that social networking sites have emerged as ways to stay in touch online, equally significant advances have been made in social networking technology for the benefit of the firm. These enterprise relationship management (ERM) systems have additional features not found in public online systems.
To use social networking technology in a financial services setting, ERM needs to take into account a few concepts that are foreign to public social networks. It must have stringent privacy settings, to allow employees in a conservative banking culture to be comfortable with the system. Employees must know that they are in control of their own relationships, and that nothing is being taken from them. There must also be precautions taken for compliance and confidentiality. ERM requires clean interoperability with the existing technology infrastructure of the firm so it can be integrated in all applications. All relationship and contact information must be kept behind the bank's secure firewall. And all the data must fully belong to the bank, so it can be properly utilized.
An ERM corporate social network is populated directly from the existing relationship and contact data lying in existing enterprise systems. This can include address books, e-mail traffic logs, CRM systems, HR systems and phone systems. While applications like LinkedIn require months of work to create a small network of 500 contacts that can only be leveraged by the person who created it, the corporate social network can reveal millions of relationships without requiring any manual data entry at all. By analyzing the relationship data in existing IT systems, the ERM is able to calculate and measure the strength of each relationship. This allows an executive to search for a relationship to a prospect or a client with the corporate social networking software and uncover which colleagues have the best relationships to that target.