Letter to the Editor

4   Social Banking

The following article appeared 'as part of a piece called Social Engineering by Davey Winder in the April 2007 edition (number 150) of PC Pro magazine - pages 174 - 175.

An area you might expect web 2.0 social networking to touch is banking.

According to a study by the Social Futures Observatory (SFO), anti-bank feeling currently runs so high in the UK that about 74% of us would seriously consider borrowing or lending money via a social lending community rather than a high street bank. Person-to-person lending goes right back to biblical times, but it's. always been confined, by necessity to' small and localised social groups. The internet allows this cir?le of trust expanded and facilitates social lending on a much wider scale. 'The SF0 study highlight* social lending services such .as Zopa ( established by some of the folk behind the launch of Online bank Egg which have become popular enough to amass in excess of 100,000 active members. It reckons that the key elements that drive people towards online social. • lending include control, comunity, self-authoring and ...perhaps most obviously - financial gain,

.For example,, the survey reports that 81% of lenders and 70% of borrowers thought Zopa •offered significant -control, compared to just 4% and 1% respectively when it comes to high-street banks. A highish 56% also reported that blogs and forums attached to lending markets were significant in making the decision whether to use the system or not. This should. come as no surprise, because it's precisely such online interactions that establish

a circle of trust. All of this is a. very good, thing, but .I suspect that rather than causing the big banks to quake in their boots, it's far more likely to' set them off , looking at ways to launch their own quasi-social lending services (probably under some daft brand name and totally. missing the point). It does, however, point out the potential' of the web to drive social change.

All the best,
Craig Embleton
moneyreformparty webmaster