This is a guest post by Lou Carlozo

When it comes to assessing your financial health, it’s tempting to think that the numbers - especially our credit scores - tell the whole story. But what if there was a better of measuring financial wellness, one that made sense for your life?

your doctor based on charts with all the numbers in order: low cholesterol, low blood pressure and blood sugars. But are you hiding something from your physician? Were you having a little too much fun at the local bar just 48 hours prior to your checkup?

Just as you can tell alot about a person’s health by what they do outside the doctor’s office, you can also tell much about a person’s finance via their social behavior. And that’s where social banking comes in.

Facebook vs. The Credit Score

There’s a fascinating blog post on econsultancy.com entitled “The Facebook Mortgage,” which speculates about how social data could play a role in determining a more accurate picture of our financial health than credit scores can give us.

Craig Le Grice gives the example of two friends: “John”, who has impeccable financial habits (he’s never had credit card debt, he doesn’t gamble, he saves every month) and “Jane”, who is a bit of a spendthrift, and has a mountain of credit card debt (which is more than her annual salary) and ‘zero savings’ due to her shopping habits.

Think you can guess which one has the bad credit rating?

If you guessed Jane, guess again. She may have a terrible record of saving, but she also knows something about how to game the credit report system. Even with high credit balances, she does just enough to keep her credit scores “very good,” Le Grice reports. Meanwhile, John has a “poor” score that kept him from buying a flat in 2012, likely due to a lack of credit history.

Huh?

There is no question - we are in a new age, and we need new ways to measure our financial health. Tools like a credit score can no longer keep up with the complicated daily realities of our lives. In terms of social banking, Le Grice raises the social data question. In theory, a bank could take a look at your social media activity, and come up with a more accurate picture of who you are financially.

But, before you complain about “big brother,” keep in mind your social media activity is 100 percent public, and you control what you post on Facebook, Twitter and your personal blog - you’re always in control.

What Does Your Data Say About You?

But if we dive a little deeper into the social banking revolution, we see that there is yet another side of the picture, and it revolves around self-awareness.

These days when it comes to personal finance, there’s hardly anything personal about it where the big banks are concerned. Banking has largely become an obstacle-course game of dodging exorbitant fees and penalties, usually done by keeping ultra-high balances. But how many of us are in a position to do keep $100,000 or more in our bank accounts? Talk about being treated like a number!

The future of financial wellness belongs to tools that can provide the kind of reporting most folks might get from a brick-and-mortar bank (via paper) only once a year. MoneyPulse, for example, tells a user with hard numbers whether their spending is “in the red” or otherwise healthy, giving up-to-the-minute breakdowns in categories such as dining out, entertainment, shopping, travel and more.

The Future of Banking Is Now

Real innovations in personal banking and finance—those that align with our social media habits and need for interactive banking—are coming from high-tech entrepreneurs and startups. The true revolution comes from harnessing the power of the social data that we create every day to educate us about our spending patterns, and help us create healthier habits.

My thought is that 50 years from now, a large majority of people will manage their finances this way, using the power of data to track and report back their day-to-day behavior as it fits into a larger picture.

Of course, trying to predict what any bank will do is risky at best. But we can always control our own behavior—and the bottom line is that most of us want to improve how we manage our money, if only we had the tools to do it.

And in 2013 a majority of us, this writer included, too often rely on paper, pencil, a calculator and a dim sense of whether we’re doing the right thing. The social banking e-revolution promises to move us into an era where our financial data tracks as fast as a Google Maps program.

And as we all know, you can’t get to your final destination, financial or otherwise, without a reliable roadmap.

Want to learn more about social banking? Sign up for a Moven invite here!

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About the Author: Based in Chicago, Lou Carlozo is a personal finance contributor for Reuters Money, MoneyUnder30, a columnist with DealNews.com, and a former managing editor at AOL’s WalletPop.com

Photo Source: HBL Online