Why are banks so interested in collaboration platforms?

This Tuesday, 7 banks attended an event to learn more about Jive, a social business platform.

Insurance, publishing, consulting, and technology firms were there, too. But there were more in banking than any other industry.

Why?

Money

The main reason for all the interest is that banks have the most to gain from better collaboration and communication.

Many banks are huge companies. The top 4 US banks alone spend almost $300 billion and employ over 1.1 million people all over the planet.

More importantly, they tend to be wasteful. Over the past few decades, they made enough money that they could afford to be wasteful. They were focused on growth over efficiency – particularly on the investment banking side,

Now, with fundamental shifts in their business models, all the big banks need to seek other paths to profits. Eliminating waste, always an obvious thing, is more of an imperative than ever.

Staff recruiting & engagement

Just as it used to be easier to make money, it used to be easier to attract and retain people. Bank employees always worked hard under difficult, stressful conditions but they were paid a premium in exchange. And there was always a decided cachet to the phrase “investment bank.”

Now, as bonus pools and social recognition have been diluted, banks need to pay more attention to how work gets done. That includes, among many things, giving people the tools and convenience they’re used to at home. It includes making it easier for people to do their jobs and to have a voice.

More than ever, if young, bright people feel like they’re going back in time when they enter a bank, they’ll look for other options.

Compliance

When it comes to sharing information, banks are conflicted. They aim to enforce “need to know” policies and “only use bank devices for work” policies. Yet they also want to break down the silos and discover more cross-selling opportunities.

Which is it? Well, it’s all of the above. Yet, the combination of old tools combined with restrictive policies leads to a set of incoherent, inconsistent, and ineffective controls.

Studies by regulators (e.g., looking for business use of public social media by employees) have shown that people, while conscious of the rules, tend to do what’s easiest and most effective to get their jobs done. Regulators caution that “willful ignorance is not an option.” If there’s evidence that policies aren’t practical, then banks need to do more.

Modern collaboration platforms are part of the solution, allowing firms to consolidate the current disparate array of tools. That makes it easier for employees to communicate while also making it easier for banks to retain and supervise communications where they need to.

What are you waiting for?

Every single bank I know recognizes that their collaboration solutions are inadequate. A few have made significant progress. Some started well but stumbled on compliance or organizational churn. But the remainder, the majority, are spending protracted time running pilots and wondering what to do next.

If you’re one of those firms, please stop. Given the extraordinary potential for commercial and personal benefits, the time for dithering is over.

Now is the time to make a decision, lead a movement, and change the way your firm works.

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About John Stepper

Driving adoption of collaboration and social media platforms at Deutsche Bank. (Opinions here are my own.)
This entry was posted in Financial Services, Social Business and tagged , , , , , . Bookmark the permalink.

8 Responses to Why are banks so interested in collaboration platforms?

  1. Chris says:

    The danger is in the word “collaboration”. It means so many different things to different people.
    In the investment banking arena everyone understands the requirement to collaborate closer, but a commodities trader sending indicative prices needs something different to a sales person extolling the virtues of a trade idea to a targeted client group, or a technologist tapping a community for a .Net library location.
    Is collaboration then a set of tools that allow you to interact with defined communities?
    Interestingly etymology tells us the following:
    COLLABORATION
    1860, from Fr. collaboration, noun of action from L. collaborare (see collaborate). In a bad sense, “tratorious cooperation with an occupying enemy,” it is recorded from 1940; earliest references are to the Vichy Government of France.

    • John Stepper says:

      Thanks, Chris. You highlight a real problem in that collaboration “feels” like a universal thing but, in practice, it’s highly dependent on context.

      What works for a broker is quite different from what works for someone in IT or Ops (for example). That’s why it’s key to connect any collaboration effort to specific work/use cases for a specific set of people.

      Are you trying to generate more leads for brokers?
      Reduce help desk calls in IT?
      Improve client service in Ops?

      If you don’t know what problem you’re solving, you’re just left with generic goals of “communicating better” and you’ll have a hard time determining the value of what you’re doing.

      • Chris Congiardo says:

        Right. Part of my plan would be to sit down and interview/assess deparment. How does each department work? What information do they need to reference and how do they currently seek out that information (call IT, ask co-worker, give up)? What information can’t you find? What products and/or processes do they not understand.

        I believe the ultimate goal would be to take the knowledge some of our power users have, whether that be IT, Loans, Retail , etc, and create a source of information with which others could reference. Maybe I’m thinking more along the lines of knowledgebase which had me heaing down the road of Wikis. I’d much rather place procedures, best pratices on a page than inside of a document. One reason why I’ve been looking at Confluence.

        But I need more than just a Wiki. I’d much rather find a platform that takes how people work and think and works with that, than bulding a platform so rigid with its logic (ie SharePoint).

        Great blog, BTW. Spent some time reading up today.

  2. Gareth Jones says:

    Hi John. Great blog and post. The power of twitter gets me to places like yours!

    I agree, its time to stop the dithering. For me the power of ‘collaboration’ – term used carefully! – is in the the internal dialogue between employees. I think that there could be a lot to learn, a lot of innovation from putting traders with sales, ops and IT. For me, we still think too much about using collaboration platforms to engage with customers, which of course is excellent and appropriate.

    However, before we start thinking about the “commodities trader sending indicative prices” and what he needs, lets get an internal dialogue going about the business.

    Personally I believe that “opening up the watercooler conversation” as I call it, is the most powerful opportunity to create/unlock business value.

    Thanks for sharing.

    • John Stepper says:

      Thanks, Gareth. I like your point. We tend to be drawn to the complex use case when there is some tremendous value in simpler, less risky scenarios.

      Our solutions catalog is largely filled with problems like “reducing service calls”, “consolidating intranets”, “eliminating unneeded assets”, and “getting better in key roles” – all of which are easier to implement than, say, modernizing trader communications but which can easily save a large firm 10s of millions.

  3. Chris Congiardo says:

    I work in IT at a small community bank and have long recognized the need to “improve communcation”. Interestingly enough I was looking into Jive yesterday, found ThoughtFarmer today, which led me to your blog just now to find Jive mentioned in the first post.

    I find the idea of Social Intranet’s interesting and wonder if they could be a passing fad. Maybe not, they have been around for 10 years or so now. My concern would be this, do employees have the ability to recognize this platform as a work tool? Can they separate what they should post on Facebook from what they should post on a businesss social platform? If these tools do have the ability to monitor/manage postings, will this create a greater workload for someone to have to manage these aspects?

    • John Stepper says:

      Thanks, Chris. Our experience is that employees use the corporate collaboration platform to get things done. While we see our share of social communication and groups, I’d say it’s less that 10% of the overall activity.

      We did some things to make it easier for people to see *how* a social platform can and should be used for work. But, in general, most people in large firms are too busy to spend much time doing something that doesn’t make their life easier.

  4. Pingback: “Working out loud”: Your personal content strategy | johnstepper

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