James does a good job at identifying how a social network could positively support financial services and our ‘bland” products. 

In other words, the bank that gets the most customers, would keep the most customers, through the power of the network externality.

Source: BankerVision: Pyramid products in financial services

Note:  network externality being defined as the increasing value of a network as more users come on board.  An example being Metcalfes Law.

In my comment to the post, I would go further than referral of friends, and enter the realm of peer opinion and community advocacy.  These are well documented in theory here at Pinkomarketing.com.  Taking a step back for a moment.  The issue at stake is that in the post-cluetrain era:

A powerful global conversation has begun. Through the Internet, people are discovering and inventing new ways to share relevant knowledge with blinding speed. As a direct result, markets are getting smarter—and getting smarter faster than most companies.

These markets are conversations. Their members communicate in language that is natural, open, honest, direct, funny and often shocking. Whether explaining or complaining, joking or serious, the human voice is unmistakably genuine. It can’t be faked

The value intrinsic to Internet is bigger and more pervasive than we can imagine.  It affects everything from banking, through dating and shopping, to travel.  And the value is exponentially greater than merely provision of an alternative purchase/ transaction mechanism.  Thinking any less than that is the real folly.  A simple example follows from a colleague.

He is off on vacation at the moment, in a part of the world that is new to him.

• choice of flight was made through trip advisor, and purchased online
• choice of places to visit was through trip advisor, flickr, and blogs
• choice of restaurants was through chowhound

Consider this behaviour.  This would not have worked that well, even 5 years ago, but now there is sufficient momentum and scale from sufficient users, and their opinions placed on those sites, that safe decisions can be made on travel and restaurant choices.  The key is that those opinions are more valuable than those of any individual travel location, restaurant, or airline.  This is the power of network as defined by Cluetrain, and its here now in many places.  Movies, books, travel and restaurants are all good examples.

So lets return to James example, which is a fabulous one depicting how Financial Services could benefit in the same way.  Consider Wells or VanCity’s blog, where they make the leap to permit a free forum that discusses products and services. 

I am less certain on the rewards given to people for those opinions.  Those rewards might create aberrant behaviour, and invite shady characters.  But rewards can come in many forms;  Pinkomarketing speaks of:

A good marketer rewards the community members who stand behind him/her  …..

How do you reward your evangelists? Make certain they have the tools they need to keep on. Remind them how important they are to you regularly. Listen to their feedback, incorporate it, and even, if you can, bring them in to help you develop future versions of your product or service. These are community members who take time out of their busy schedules to spread the word for you…for free.

In any event the general premise is a genuine link between social networking and banks, and worth exploring further.  Its about realising that outbound messages don’t work in this new era.  Its essential for banks to listen instead, and learn from what they are being told by their customers, and community advocates.  Then taking that learning and applying it to product improvements.