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Social media frenzy fuels bank busting panic

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Social media frenzy fuels bank busting panic

Copyright ANP/AFP Sem van der Wal

Juliette MICHEL

Fearful Twitter posts and anxious WhatsApp exchanges coupled with online banking ease are seen as helping power an internet-age run on a pair of now-collapsed American lending institutions.

Both Silicon Valley Bank and Signature Bank were hit with massive withdrawals by customers fearful of losing their money, but the speed was dizzying in an age when rumors spread like wildfire on social media and apps make moving funds with the click of a button simple.

Congressman Patrick McHenry, chairman of the US House Financial Services Committee, referred to the recent turmoil as “the first Twitter fueled bank run.”

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Some messages that caused cold sweats among financial customers proved to be misleading, prompting calls to focus on facts not speculation.

Gone is the time when a “run on the bank” meant mobs of customers banging on bolted doors and demanding deposits back.

Now, as rumors of dwindling bank reserves ricochets about social media, customers can make them real by tapping into online accounts to transfer money.

Federal authorities took over Silicon Valley Bank (SVB) last week less than 48 hours after it first announced bad news.

The forced closure of Signature Bank came just two days later.

In between, high-profile entrepreneurs sounded an alarm and fired off advice on Twitter.

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Investor Bill Ackman tweeted during the weekend that if federal regulators didn’t quickly step in and guarantee all deposits, runs on other banks would start Monday.

“You should be absolutely terrified right now,” investor Jason Calacanis tweeted, using all capital letters for emphasis.

“That is the proper reaction to a bank run and contagion.”

Meanwhile, startup founders shared bank trouble rumors in WhatsApp groups.

“The mix of technology and fast-moving rumors fueled a crisis of unprecedented speed,” researcher Jonathan Welburn of the Rand Corporation think tank told AFP.

Online banking was around during the 2008 financial crisis, but “the adoption of these technologies is definitely increasing,” he said.

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– Circuit breakers? –

Banking regulators need to put in place “circuit breakers” that could quickly suspend banking transactions in the event of cyber attacks, weather disasters, or customer panic, said Hilary Allen, a specialist in financial technologies at American University in Washington.

This is a “very political” undertaking, Allen said.

“Banking regulators need to think about what this kind of technological circuit breaker would look like, and in which circumstances they would be ready to deploy it.”

Markets have seen the power of online platforms trigger surges in the prices of “meme stocks” like video game retail chain Game Stop and AMC Theaters due to endorsements in chat forums at Reddit.

“The flip side is that social media can also exacerbate panic and loss of confidence,” Allen said.

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In the case of SVB, fears which spread on social media resonated loudly with the bank’s customers, who tended to be tech-savvy entrepreneurs keenly tuned in to online chatter.

The collapse of SVB was the second largest bank failure in the United States but played out in barely two days.

The largest bank failure in the country, that of Washington Mutual in 2008, took place over the course of eight months.

At that time, Twitter and iPhones were fledgling products; there were no WhatsApp groups, no Slack chat threads, Welburn noted.

“What happens when bankers are drowning their sorrows in the social media age?” Welburn wondered.

“Viral posts, retweets and shares could deprive regulators of precious time.”

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Snapchat Explores New Messaging Retention Feature: A Game-Changer or Risky Move?

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Snapchat Explores New Messaging Retention Feature: A Game-Changer or Risky Move?

In a recent announcement, Snapchat revealed a groundbreaking update that challenges its traditional design ethos. The platform is experimenting with an option that allows users to defy the 24-hour auto-delete rule, a feature synonymous with Snapchat’s ephemeral messaging model.

The proposed change aims to introduce a “Never delete” option in messaging retention settings, aligning Snapchat more closely with conventional messaging apps. While this move may blur Snapchat’s distinctive selling point, Snap appears convinced of its necessity.

According to Snap, the decision stems from user feedback and a commitment to innovation based on user needs. The company aims to provide greater flexibility and control over conversations, catering to the preferences of its community.

Currently undergoing trials in select markets, the new feature empowers users to adjust retention settings on a conversation-by-conversation basis. Flexibility remains paramount, with participants able to modify settings within chats and receive in-chat notifications to ensure transparency.

Snapchat underscores that the default auto-delete feature will persist, reinforcing its design philosophy centered on ephemerality. However, with the app gaining traction as a primary messaging platform, the option offers users a means to preserve longer chat histories.

The update marks a pivotal moment for Snapchat, renowned for its disappearing message premise, especially popular among younger demographics. Retaining this focus has been pivotal to Snapchat’s identity, but the shift suggests a broader strategy aimed at diversifying its user base.

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This strategy may appeal particularly to older demographics, potentially extending Snapchat’s relevance as users age. By emulating features of conventional messaging platforms, Snapchat seeks to enhance its appeal and broaden its reach.

Yet, the introduction of message retention poses questions about Snapchat’s uniqueness. While addressing user demands, the risk of diluting Snapchat’s distinctiveness looms large.

As Snapchat ventures into uncharted territory, the outcome of this experiment remains uncertain. Will message retention propel Snapchat to new heights, or will it compromise the platform’s uniqueness?

Only time will tell.

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Catering to specific audience boosts your business, says accountant turned coach

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Catering to specific audience boosts your business, says accountant turned coach

While it is tempting to try to appeal to a broad audience, the founder of alcohol-free coaching service Just the Tonic, Sandra Parker, believes the best thing you can do for your business is focus on your niche. Here’s how she did just that.

When running a business, reaching out to as many clients as possible can be tempting. But it also risks making your marketing “too generic,” warns Sandra Parker, the founder of Just The Tonic Coaching.

“From the very start of my business, I knew exactly who I could help and who I couldn’t,” Parker told My Biggest Lessons.

Parker struggled with alcohol dependence as a young professional. Today, her business targets high-achieving individuals who face challenges similar to those she had early in her career.

“I understand their frustrations, I understand their fears, and I understand their coping mechanisms and the stories they’re telling themselves,” Parker said. “Because of that, I’m able to market very effectively, to speak in a language that they understand, and am able to reach them.” 

“I believe that it’s really important that you know exactly who your customer or your client is, and you target them, and you resist the temptation to make your marketing too generic to try and reach everyone,” she explained.

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“If you speak specifically to your target clients, you will reach them, and I believe that’s the way that you’re going to be more successful.

Watch the video for more of Sandra Parker’s biggest lessons.

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Instagram Tests Live-Stream Games to Enhance Engagement

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Instagram Tests Live-Stream Games to Enhance Engagement

Instagram’s testing out some new options to help spice up your live-streams in the app, with some live broadcasters now able to select a game that they can play with viewers in-stream.

As you can see in these example screens, posted by Ahmed Ghanem, some creators now have the option to play either “This or That”, a question and answer prompt that you can share with your viewers, or “Trivia”, to generate more engagement within your IG live-streams.

That could be a simple way to spark more conversation and interaction, which could then lead into further engagement opportunities from your live audience.

Meta’s been exploring more ways to make live-streaming a bigger consideration for IG creators, with a view to live-streams potentially catching on with more users.

That includes the gradual expansion of its “Stars” live-stream donation program, giving more creators in more regions a means to accept donations from live-stream viewers, while back in December, Instagram also added some new options to make it easier to go live using third-party tools via desktop PCs.

Live streaming has been a major shift in China, where shopping live-streams, in particular, have led to massive opportunities for streaming platforms. They haven’t caught on in the same way in Western regions, but as TikTok and YouTube look to push live-stream adoption, there is still a chance that they will become a much bigger element in future.

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Which is why IG is also trying to stay in touch, and add more ways for its creators to engage via streams. Live-stream games is another element within this, which could make this a better community-building, and potentially sales-driving option.

We’ve asked Instagram for more information on this test, and we’ll update this post if/when we hear back.

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