Barclays wants to use you
Barclays doesn’t want to be just another stuffy bank. Its US subsidiary, Barclaycard US, is introducing what it says is “the first social credit card to be designed and built through the power of community crowdsourcing.” No, seriously.
In addition to less fees and a “low” interest rate, the Barclaycard Ring will also offer customers the chance to talk to each other in online forums. Supposedly, the company will also ask for input on decisions like where call-centers should be located, going paperless, and other questions usually left to executives. The biggest surprise? Barclays also plans to let customers see how much money the bank is making off of them.
Is Barclays sincere? Or should we reject this as a cynical marketing ploy?
If implemented as advertised, then this could be a pretty innovative — if very wacky — concept. Crowdsourcing has already proven that is has great potential and, as I wrote earlier this week, can be used in all sorts of fascinating ways. Why shouldn’t Barclays jump aboard and give its customers some ownership?
Well, yes…but. What do they get in return? Someone who contributes to a Kickstarter campaign know that he or she is helping to bring something more beautiful into the world. Someone who invests in a start-up under the new crowdsourcing venture capital legislation will get equity in exchange. What will the Barclays customer get, besides the chance to be used by the company to attract other customers?
Also, here’s the crucial thing about any product or process design that wants to harness the wisdom of the crowds — trust is essential. Customers need to trust that the company soliciting their opinions will not waste their time. Can their contribution really make a difference? Will their ideas actually get a fair hearing? Or will they be brushed aside by executives who think that they know better? Can they trust the company not to waste their time and attention? And importantly, will customers actually be able to trust the “profitability” numbers that Barclaycard Ring will supposedly make public? Is Barclays a trustworthy company, in the first place?
A few recent scandals should give pause.
Barclays was one of the 5 UK banks involved in a scandal over how it sold payment protection insurance over several years. Banks sold PPI to British customers taking out mortgages and other large loans, which was supposed to cover the repayments in cases of illness and job loss. PPI was hugely profitable to the banks — largely because the way it was designed purposely kept customers from making a successful claim. It was also often sold as necessary when in fact it wasn’t. Barclays now thinks it will have to spend £1 billion to compensate the wronged.
Also, just last month the UK Treasury announced that it had abruptly shut down two tax evasion schemes run by Barclays. The bank used them to help itself others to avoid paying £500 million in taxes. New legislation to specifically target this had to be rushed through just to close schemes down. The Treasury described the tax shelters as “aggressive” and “highly abusive”. From Bloomberg:
The disclosure comes less than three months after Chief Executive Officer Robert Diamond called on banks to be more “effective citizens.” Barclays is also a signatory to a 2010 code under which banks pledged to obey the spirit as well as the letter of British tax laws.
Finally, Barclays is also one of the defendants named in a suit by Credit Suisse against several global banks who are accused of manipulating Libor, which some consider to be the “most important number in the world” and which is used as the benchmark for $360 trillion in financial contracts. There is a global investigation being carried out by authorities in the UK, Canada, the US and Japan that could very well charge Barclays and other banks for racketeering.
Crowdsourcing makes a partnership between the company and the contributor. Does Barclays sound like a partner that you can trust?
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Related story: A $360 trillion confidence trick
Category: Banking
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