In my post, ”How soon before there is a Web 2.0 retail bank?“, I mentioned that Wells Fargo is taking advantage of SecondLife by building an online community and educating consumers on their products. As we will see, that is one of the smart way to wade into the Web 2.0 banking arena. Until an institution can decide how they want to deliver products and services, based on the feedback they get from their customers, the education option is the safest way that any established institution should be exploring. I’m bringing this up because SecondLife has banned banking from its site effective Jan. 22nd as reported by TechCrunch. These “banks” that were actually accepting transactions only existed in the virtual world. The problems and fraud causing this shutdown echos what is said in Bank Systems & Technology by Maria Bruno-Britz that “accountability is so important in financial services” and myself, in the above mentioned post, where I talked about an institution’s reputation and dependability. Trust and reliability are the lifeblood of a successful financial services. This isn’t to say that your bank can’t go out of business. However, some government agency is always looking over their shoulder to make sure they are obeying laws and regulations. When the marketplace advances very quickly the regulators and legislatures react after the Wild West effect has taken place. What we are seeing here is that the market is self regulating and SecondLife has done the smart thing and shut this service down before any more bad press can hurt their reputation.
If this story gets into the mainstream press it has the potential to continue to leave consumers with a bad taste for web based banking. This is especially true if consumers can’t draw a distinct line between the different offerings from various institutions and instead see them all as the same.
The question remains, who is going to be the leader in the Web 2.0 banking world? To this I think there will be no one answer. Each bank or credit union will probably adopt some of the new technologies to fit their market and customers as the need arises.
