Silicon Insider: How Facebook Took Down a Giant

Sept. 6, 2007 — -- One of the most important phenomena of the 21st century is that technological breakthroughs will increasingly come from the most unlikely places.

And I think I just saw one happen here, in London, if you can believe it.

Here's the background: HSBC, which used to be called the Hong Kong and Shanghai Banking Corporation, is the most ubiquitous bank in England. Go to any small town in the U.K. and somewhere on the main street you'll see the familiar hexagon logo and ATM.

In London, HSBC branches are everywhere, as is the corporate headquarters building, a big gray slab on Canary Wharf.

Being the "World's Local Bank," with 100 million depositors, HSBC goes to great lengths to be a good community citizen -- especially in its home country. One of the most celebrated of these programs, part of HSBC's initiative on education, was one that allowed recent college graduates to pay off their "overdraft" debts without having to also pay any interest charges.

Now I'm not a big supporter of teaching new grads and graduate students to be even more irresponsible than they already are. Frankly, one of the biggest problems with the U.K. (and the United States) is that our brightest young minds are too long insulated from the realities of supply and demand, savings and debt, and fiscal responsibility in general. So, as benevolent (and shrewdly self-promoting) as the HSBC initiative was, it was also pretty damn stupid.

But that's neither here nor there. What's interesting about this story is what happened when HSBC finally got in its right mind and decided to quietly kill the program.

That was in June. By early August, HSBC formally began applying a 9.9 percent interest to the debts of nearly 250,000 British students. Here in the land of genteel socialism, the response was predictable: fury.

But students are always angry about something. But that is counterbalanced by the fact that they are also usually powerless. The result is typically a whole lot of sound and fury, signifying nothing.

But this time, something changed. And that change may prove to be very significant. What happened was that 4,000 of those angry students went on to the online community site Facebook, which is especially popular with college students, and joined a group dedicated to getting HSBC to reverse its decision.

The group, created by Wes Streeting, vice president of the National Union of Students (NUS), was entitled "Stop the Great HSBC Graduate Rip-Off" (a classic example of hubris: only postadolescents would characterize the end of a charity as a "rip-off.")