Markets from Interactions: The Technology of Mass Personalization in Consumer Banking

Abstract

This paper explores the interactional foundations of markets as it examines a puzzle in banking technology. Customer Relationship Management was introduced at a Hungarian bank to personalize clerks’ interactions with clients. The software assembles customer profiles and calculates individualized sales offers, yet the outcome in face-to-face use is standardized. To explain this result the paper asks how the process of buyer-seller interaction accomplishes market exchange, complementing structural economic sociology, particularly its sampling bias and concept of social relationships as independent variables. Based on ethnographic methods - observation and interviews at a bank - the paper provides fine-grained analysis of the interaction process, finding that bank clerks try to smoothly interact simultaneously with the software-generated client profile and with the client in person, which limits their capacity to personalize. The paper contributes to the theory of markets in two ways. First, interaction dynamics structure market exchange. The specific spatial and temporal order of interacting enables and constrains how products can be offered and accepted. Exchange unfolds as actors negotiate and exploit the social and technical demands of interaction. Second, social relationships and fleeting impersonal transactions are not mutually exclusive ways of doing exchange. Interaction between buyer and seller completely blends anonymous calculative and familiar-trusting elements. Strategic market action may be oriented towards turning strangers into relationships and vice versa by reconfiguring how interactions are accomplished.