Welcome!

Weblogic Authors: Yeshim Deniz, Elizabeth White, Michael Meiner, Michael Bushong, Avi Rosenthal

Related Topics: @CloudExpo, Agile Computing, CRM

@CloudExpo: Article

Web 2.0 and the Return of the Relationship

Look past the hype, and Web 2.0 is all about fundamentals that have always been important to financial services

Wikis. Blogs. Podcasts. Social networking sites. File sharing. User-generated content. These are just some of the hallmarks of the much-talked-about (but little understood) "Web 2.0."

As with any concept that gets a lot of buzz and attention, Web 2.0 is a catchphrase that marketers, luminaries, and business strategists seem compelled to drop into almost any discussion. The conventional wisdom is that if your business hasn't fully embraced Web 2.0 (whatever that entails), then it is falling woefully behind and missing out on lucrative opportunities. In response, many companies, including firms from across the spectrum of the financial services industry, have raced to set up corporate blogs, invite user-generated content, set up profiles on MySpace, open storefronts in "virtual world" Second Life, and take other steps to connect with their markets using Web 2.0 tools.

If a few relative "luddites" are watching this melee from the sidelines and scratching their heads, it's understandable. Sure, Web 2.0 sites and applications are fun and engaging, but are they really going to bring in business? Aside from being a new channel for advertising and brand-building, is a CEO blog or Second Life storefront really going to increase profits? Is it worth the trouble, or is it just another expense and distraction from tried-and-true business strategies?

There are a lot of different facets to Web 2.0, and thus many potential answers to these questions. While a dose of skepticism is prudent, there is much to recommend the strategic use of various elements of the Web 2.0 craze. Some Web 2.0 technologies are invaluable for corporate knowledge-sharing and collaboration, for example. And one need only consider the massive popularity of social networking sites to recognize that they are having a significant impact on the ways people interact and spend their time. Once you push past the hype and look at the ideas and tools that underlie the fads, there are some aspects of Web 2.0 that have strong potential for profitable use in financial services.

In fact, even for those who staunchly prefer "proven business fundamentals" to "new paradigms," there are compelling ways to use and understand the importance of Web 2.0. One of the most valuable and accessible ways to look at Web 2.0 is to think of it in the context of an age-old business fundamental: relationship-building.

Web 2.0 as the Relationship Medium
Social networking sites are among the most important-and popular-innovations of Web 2.0. On sites such as Facebook and MySpace, users set up profiles and "add" friends to their networks, sharing news, thoughts, photos, music, jokes, and just about anything else. On many social networking sites, users can see who each other's friends are, who they know in common, and details on how they know each other. Users can join virtual clubs and interest groups, form sub-groups of friends within their larger group of friends, and connect through networks based on geography, educational facility, place of work, and more.

Not surprisingly, these new modes of interaction have been wholeheartedly adopted by the tech-savvy younger generations. But if you think social networking sites are just for teenagers and college kids, think again. Stats from 2007 show that persons aged 35 and up accounted for 39% of Facebook's visitors-if you include those 25 and up, the number goes up to almost 51%.[1] And online networking is not restricted to the "social"; professional networks are rapidly gaining ground. Between October 2006 and October 2007, membership growth for LinkedIn, the most popular professional networking site, significantly outstripped that of Facebook,[2] suggesting that professionals-in droves-are beginning to see the relevance and value of these kinds of interactions to their business lives.

So what's at the root of all this interest in online networking? The answer's easy: relationships.

Networking has always been an important part of business life, an opportunity to cement and extend the relationships you already have and to establish new ones. Online networking transposes this experience into the wired business world we now operate in, where interacting and collaborating with those you may never even have met in person is a common phenomenon.

What online networking lacks in traditional face-to-face contact, it makes up for in immediacy and insight. Most of us have had the experience of meeting someone at a live event and failing to glean the person's role, relevance, or shared connections on the spot, thereby missing out on a valuable opportunity. With online networking, much of this information is available up front, instantly revealing shared associations and interests. LinkedIn, for example, allows users to see three degrees of separation, revealing the kinds of connections that can take months or years to become apparent under other circumstances.

From a business perspective, this information is golden. Companies can use this knowledge to find their way into deals using existing relationships, understand prospect and customer allegiances and influences, recruit individuals strategically, and find common ground with new and existing contacts, just to name a few potential applications. In a business such as financial services, where trust is paramount and relationship structures can be complex and hard to decipher, such information can prove invaluable.

CRM: Precursor ... and Successor?
A desire to learn more about contacts and their interrelationships is nothing new to the business world, and while Web 2.0 tools are finding new and exciting ways to collect and chart this information and enable individuals to interact, they are simply the latest in a long line of technologies and tools for doing so.

In the enterprise technology context, the systems that most closely match the kind of business value and function described in online networking tools above are customer relationship management (CRM) solutions. The customer relationship moniker is in some ways misleading, since CRM systems have always been equally geared toward gathering information not only about a firm's customers, with whom they already have relationships, but also about prospects, targets, partners, and other parties with whom the firm is looking to initiate or expand relationships. Understanding who knows whom and finding ways to capitalize on this knowledge has always been a key business goal for CRM implementations.

So are Web 2.0 tools the successors to CRM? Despite the buzz around them, it seems unlikely. Although some of their profiling and relationship-mapping functions overlap, at this stage it does not appear as though any Web 2.0 tool or combination thereof has the potential to satisfy the deep, broad business needs served by CRM systems-nor are they meant to. What seems more likely is that CRM vendors will absorb some of the best ideas from the Web 2.0 world into their systems. Working in the CRM space, we see a lot of exciting opportunities to integrate tools such as wikis and RSS feeds into the CRM framework to help facilitate collaboration and communication both internally and with customers and prospects.

Relationship Lessons from Web 2.0
Though Web 2.0 is unlikely to supplant or fundamentally change CRM's role for financial services companies, CRM and financial services companies alike have a lot they can learn from Web 2.0.

First, the high flexibility and configurability of many Web 2.0 tools point to the need to integrate this kind of personalization into both CRM systems and the customer experiences they help firms provide. The ability to adjust interfaces, configure personal portals, and create custom views and reports is paramount to CRM users, and it will become even more so as they continue to use more and more Web 2.0 tools that give them this level of control. The ability to aggregate different kinds of information of one's choice from internal and external sources-ticker information, market data, and news feeds, in addition to top contacts, tasks, appointments, and more-will be a key feature for CRM systems moving forward. At the same time, customer expectations for highly personalized and flexible interactions are on the rise-financial services firms need the level of customer knowledge to provide this degree of personalized experience, as well as the tools to offer customers diverse options for interacting with the firm.

Furthermore, the CRM and financial services industries can both learn from the wild popularity of social networking sites, blogs, and wikis-and the staggering amount of personal and professional data individuals share through these venues-that under the right circumstances, today's customers are remarkably willing to share data that can be of great value to businesses. Rather than thinking of data collection as a painful or cunning process of extraction, firms should look at what characterizes the conditions under which people are willing to openly share such information. What they are likely to find is that individuals' willingness to share personal data is related to three things: their perception of the value they receive in exchange, their degree of trust in the venue or platform, and their ability to control the situation. As such, financial services firms need to give more thought to how they can provide clear reciprocal value to their customers in exchange for their openness, build stronger relationships and more trustworthy reputations with them, and shift more control and choice into the customer's hands, truly becoming more "customer centric." All of these are objectives in which the company's CRM system-with or without the addition of some strategic Web 2.0 tools-can be of great value and assistance.

At the end of the day, the high popularity and strong relationship focus of many Web 2.0 technologies affirms the continuing importance of interaction and relationships in today's social and business environments. The time-honored adage that "it's who you know, not what you know" is as true today as ever, and Web 2.0 offers new ways for financial services firms to establish, build, maintain, and leverage relationships that can help further their business goals.

[1] Gonzalez, Nick. “Facebook Users Up 89% Over Last Year; Demographic Shift.” July 6, 2007. URL: http://www.techcrunch.com/2007/07/06/facebook-users-up-89-over-last-year-demographic-shift

[2] Nielsen Online, November 2007.

More Stories By Jason Rushforth

Jason Rushforth is Senior Vice President for CDC Software, responsible for North American CRM Sales, Worldwide Marketing, and Strategic Alliances. Previously, he was CDC Software's Global Vice President of Financial Services, responsible for the long-term global strategy of the financial services vertical of the company's Front Office solutions, which include Pivotal CRM, CDC Respond, CDC MarketFirst, and Saratoga CRM. Since 2000, Rushforth has played an instrumental role in the growth of the CDC Software's Front Office products. His deep industry knowledge has guided the company in the development of industry-specific tools for institutional asset management, mutual fund wholesaling, wealth management, capital markets, and commercial banking. As a visionary expert in the application market, especially in the CRM segment, he is known for his keynote speaking engagements for such events as the Wealth Management Forum and feature webcasts with Wall Street & Technology and TowerGroup, and he frequently contributes to industry articles in publications such as CRM Magazine, Financial Services Technology, CRM Advocate, Windows in Financial Services, and Commercial Lending Review.

IoT & Smart Cities Stories
René Bostic is the Technical VP of the IBM Cloud Unit in North America. Enjoying her career with IBM during the modern millennial technological era, she is an expert in cloud computing, DevOps and emerging cloud technologies such as Blockchain. Her strengths and core competencies include a proven record of accomplishments in consensus building at all levels to assess, plan, and implement enterprise and cloud computing solutions. René is a member of the Society of Women Engineers (SWE) and a m...
Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settlement products to hedge funds and investment banks. After, he co-founded a revenue cycle management company where he learned about Bitcoin and eventually Ethereal. Andrew's role at ConsenSys Enterprise is a mul...
In his general session at 19th Cloud Expo, Manish Dixit, VP of Product and Engineering at Dice, discussed how Dice leverages data insights and tools to help both tech professionals and recruiters better understand how skills relate to each other and which skills are in high demand using interactive visualizations and salary indicator tools to maximize earning potential. Manish Dixit is VP of Product and Engineering at Dice. As the leader of the Product, Engineering and Data Sciences team at D...
Dynatrace is an application performance management software company with products for the information technology departments and digital business owners of medium and large businesses. Building the Future of Monitoring with Artificial Intelligence. Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more busine...
Nicolas Fierro is CEO of MIMIR Blockchain Solutions. He is a programmer, technologist, and operations dev who has worked with Ethereum and blockchain since 2014. His knowledge in blockchain dates to when he performed dev ops services to the Ethereum Foundation as one the privileged few developers to work with the original core team in Switzerland.
Whenever a new technology hits the high points of hype, everyone starts talking about it like it will solve all their business problems. Blockchain is one of those technologies. According to Gartner's latest report on the hype cycle of emerging technologies, blockchain has just passed the peak of their hype cycle curve. If you read the news articles about it, one would think it has taken over the technology world. No disruptive technology is without its challenges and potential impediments t...
If a machine can invent, does this mean the end of the patent system as we know it? The patent system, both in the US and Europe, allows companies to protect their inventions and helps foster innovation. However, Artificial Intelligence (AI) could be set to disrupt the patent system as we know it. This talk will examine how AI may change the patent landscape in the years to come. Furthermore, ways in which companies can best protect their AI related inventions will be examined from both a US and...
Bill Schmarzo, Tech Chair of "Big Data | Analytics" of upcoming CloudEXPO | DXWorldEXPO New York (November 12-13, 2018, New York City) today announced the outline and schedule of the track. "The track has been designed in experience/degree order," said Schmarzo. "So, that folks who attend the entire track can leave the conference with some of the skills necessary to get their work done when they get back to their offices. It actually ties back to some work that I'm doing at the University of San...
When talking IoT we often focus on the devices, the sensors, the hardware itself. The new smart appliances, the new smart or self-driving cars (which are amalgamations of many ‘things'). When we are looking at the world of IoT, we should take a step back, look at the big picture. What value are these devices providing. IoT is not about the devices, its about the data consumed and generated. The devices are tools, mechanisms, conduits. This paper discusses the considerations when dealing with the...
Bill Schmarzo, author of "Big Data: Understanding How Data Powers Big Business" and "Big Data MBA: Driving Business Strategies with Data Science," is responsible for setting the strategy and defining the Big Data service offerings and capabilities for EMC Global Services Big Data Practice. As the CTO for the Big Data Practice, he is responsible for working with organizations to help them identify where and how to start their big data journeys. He's written several white papers, is an avid blogge...