Commercial Credit in the Era of Social Business: Revolution, Evolution or "Same Old-Same Old"?

By Cote, Alex | Business Credit, June 2010 | Go to article overview
Save to active project

Commercial Credit in the Era of Social Business: Revolution, Evolution or "Same Old-Same Old"?


Cote, Alex, Business Credit


For all the hype--and likely because of it--social media and social networking have yet to find universal acceptance among the business crowd. Sure, the local coffee shop owner might see great value wooing loyal patrons in the door via coupons on Facebook, but does a B2B HVAC shop really need to be Tweeting in the hopes of landing new leads? Is "engagement" with your friends, fans and followers really going to get you better terms with your suppliers? And, if you're a credit pro, can you really factor in a potential customer's Foursquare "check ins" at local watering holes as part of assessing their credit risk? Probably not. But don't dismiss the business side of social networking just yet. It might just have a sane, hype-free role in the future of credit.

The Web technology of the dotcom era promised to change everything under the heading of "the old rules no longer apply," but wound up busting rather spectacularly. Soon thereafter, the true impact of the Internet, void of its earlier hype and speculation, became fully interwoven into virtually every aspect of our personal and business lives. The social web is, in many ways, following the same "hype cycle," a term coined by analyst firm Gartner to describe the adoption curve of new technologies. And while there are few credit specific applications of the social web during this over-hyped period of inflated expectations, certain developments hold promise for an evolved credit market. In fact, some look remarkably like online versions of what the credit market has been for over a century.

Credit's Technology Adoption History

Ironically, one of the reasons that credit pros were slow to adopt the original computing technology versus their finance colleagues was that computers and software, at the time, did a poor job of mimicking their relationship-based profession. For generations, credit pros made their decisions based on information gathered from localized or industry-based credit groups. They quite literally tapped into the collective knowledge of their peers as an early form of business intelligence. When this didn't scale, they formed credit information exchanges that would eventually become Dun & Bradstreet.

[ILLUSTRATION OMITTED]

It was only when niche business applications began to emerge, when PCs popped up on every desktop, and when firms like Dun & Bradstreet introduced digitized collections of their data that credit pros began to evolve the way they did their job. Sure, references still mattered, but suddenly there was a wealth of actionable information at their finger tips. Data began to trump the good old-fashioned relationship, a factor that became compounded with the arrival of automated scoring and risk assessments. Clearly, the industry has realized many benefits from the availability of credit data repositories and credit policy automation that came with technological evolution, but the nagging complaint among credit professionals has been the lack of fresh information.

For credit pros, the Web augmented, rather than supplanted, their digital information systems. Search engines such as Google became a mainstay in their vetting process. While this ocean of freely available information added value, especially for research into public companies, it has yet to fully replace the specificity and depth of established credit bureaus and curated databases.

Despite the social Web's popularity in other areas of business, like marketing and sales--IDC has reported that 57% of U.S. workers use social media for business purposes at least once a week--adoption among credit professionals has largely been for purely personal pursuits.

Credit, like many other professions, has yet to find its "killer" application in social media.

From Message Boards to Social Networks to Groups

What is now commonly called Web 1.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Commercial Credit in the Era of Social Business: Revolution, Evolution or "Same Old-Same Old"?
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.