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‘Friend request’ to cut bank fees?

By David McMillin · Bankrate.com
Friday, February 3, 2012
Posted: 3 pm ET

Imagine if each of your friends on Facebook and followers on Twitter played a role in your banking experience. By the middle of this year, a new type of bank hopes to make that a reality. MovenBank, a new type of institution set to launch in mid-2012, wants to change the way you pay for banking services based on a range of factors including your online presence.

In a recent article in American Banker, Jeremy Quittner covered this new approach to providing personal finance tools and its implications for consumers.

MovenBank plans to use information from Twitter, Facebook and other social networking sites not just for underwriting, but to price the entire relationship. It has developed a scoring product it calls CRED, which is a combination of traditional scoring elements and a consumer's social media "street credibility."

"If you introduced 20 friends, we might add 25 basis points to a saving account or offer free (person-to-person) transfers," says Brett King, founder and chairman of MovenBank.

While King does not dive into specifics of how this formula might work, the model aims to reward account holders for acting as the biggest advocates for their banks -- essentially an extension of their marketing department. Since MovenBank has yet to officially open its online doors for new customers, the strategy is smart for spreading the word about a new type of institution. I'll be curious to see how willing consumers will be to post about their banking experience and how many of their friends will actually be willing to listen.

After taking a peek at the introduction on the MovenBank site, I'm guessing it will be able to attract some attention as the founders work to distinguish MovenBank from traditional banks. The company (I don't think I can call it a bank yet) has plenty of innovative ideas including a no-plastic, all-mobile phone approach to payments and entirely paperless communication. Customers will even fill out a financial personality test so MovenBank can cater their services to specific spending and saving patterns.

What do you think? Would your social standing be able to help you save on your banking costs?

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2 Comments
Outerspaceguy
February 04, 2012 at 10:07 am

I'm not on Facebook; I'm not on twitter. I'm proud of those facts.

I guess they are not the bank for me.

Dmitry
February 03, 2012 at 6:51 pm

Imagine all the spam from your friends...
Well, I guess something must kill Facebook eventually.

I must say those are pretty insignificant rewards, considering that everyone will hate your spam.