How You Can Be the Bank

While sophistication and global exposure where once considered highly desirable characteristics of banks, recent experience has lead investors to seek out different kinds of banks. This has directly led to a different kind of bank - those practising "social banking".

Social banking effectively employs new information technology or Web 2.0 or the popularisation of web-based applications. Its "new generation" approach led to the moniker banking 2.0 because it integrates general banking concepts and systems with the social aspects of the web.

This new way of financing helps investors by putting a human face on their depositing and borrowing. Banking 2.0 therefore provides new facilities for consumers to take advantage of a banking system that has a socially-oriented face.

The Innovative Banking 2.0 Pioneers

Social banking started as a peer to peer online lending system where individuals can lend and borrow money from each other. The doors of banking 2.0 were opened by pioneering social banking networks like Zopa.Com in the UK and Kiva.Org.

Zopa.Com is a peer to peer social lending network where individuals can become a lender and a borrower. Costs are lowered by reducing the margin required by the arranger - bringing borrowers and lenders together with less intermediation.

The concept of peer to peer lending and banking 2.0 was broadened to encompass social financing through the efforts of Kiva.Org. The large reach of this new form of banking allows a more granular approach, better supporting small businesses.

In Australia, the innovation of banking 2.0, or social banking, has seen new entrants to the business of banking such as SmartyPig. This is a well developed financing operation where people can interact with other customers, in much the same manner as MySpace or other member driven internet offerings.

SmartyPig allows you to open savings accounts for free so you can attain your short term financial goals. This new approach means that customers can satisfy their borrowing and lending needs while meeting their ethical concerns. Most importantly, your social banking network of friends can help significantly in attaining your financial goals.

Banking 2.0 Can Help You Stay Afloat During Crisis

Banking 2.0 redefines consumer spending. For example, with SmartyPig Australia, you will be encouraged to maintain online savings accounts so you can save first before you spend. Your savings accounts therefore take precedence over spending which can improve your financial position.

Through banking 2.0 savings accounts, you can clearly feel the worth of your efforts. By enabling you to set specific goals for your savings accounts, the banking 2.0 network will be able to make you a more conscious spender.

And with the existence of peer to peer lending and borrowing networks, you will have an easy access to social financing. In effect, social banking not only allows you to keep profitable online savings accounts but can also extend innovative financial facilities for you where you deal not with bankers but with your peers.

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