It didn’t take much to send hundreds of worried people racing to three banks in Kazakhstan in an effort to withdraw their savings on February 18.
Just a few words on social media were enough, along with the public’s already jittery mood over Kazakhstan’s 20 percent devaluation of its currency, the tenge, on February 11.
An anonymous message circulating early on the morning of February 18 on WhatsApp warned that three of the country’s private banks — Kaspiy Bank, Alians Bank, and Centrcredit Bank — were on the verge of bankruptcy.
Within hours, large crowds had gathered at the Almaty and Astana offices of the banks to reclaim the money in their hard-currency accounts. When the surprised banks refused, fears that the banks were on the verge of collapse spread further.
The panic only subsided after one of the banks put out its own social-media message denying the rumors and offering about $ 500,000 for any information about the perpetrator.
The incident passed quickly but it isn’t likely to be forgotten in banking circles soon. One reason is it showed again what soft targets financial institutions are for rumors and tips on social media.
“Human beings are getting used to the idea that they are able to influence the world through social media and, of course, we are all being influenced because people are on social media trying to pick up information, trying to get ahead of the curve,” says Charlie Beckett, who tracks social media as a professor of journalism at the London School of Economics. “And financial and banking services are particularly vulnerable to very short-term shocks when there is gossip or a rumor.”
The run on the three Kazakh banks is the latest in a string of such incidents that most famously includes a run on Sweden’s Swedbank in Latvia in 2011. There, 10,000 panicked savers withdrew the equivalent of 14 million euros from ATMs in a single day following rumors on Twitter that the bank was facing liquidity and legal problems in Estonia and Sweden.
Similarly, a message posted on the U.S.-based Craigslist website sent frightened savers scurrying to a California bank in 2009 and a message on a social-media site in Burma caused the mobbing of banks in Yangon in 2012.
The motives for such attacks vary. In some cases rumors have been started by dismissed bank employees seeking revenge. In others, the suspects may be commercial competitors. But in all cases, the rumormongers count on the public’s inability to filter fact from fiction in the constant swirl of abbreviated messages shared by social media users.
According to Beckett, social-media users are still on a learning curve. The fact that messages are often forwarded between friends causes many people to be less critical about checking sources than they might be with more established media like newspapers and television.
“Generally speaking, the advice has to be: don’t make decisions based on small messages — for example, on Twitter or Facebook,” he says. “Always think about what the sources are, whether you have trusted them in the past, and always check. You wouldn’t make a big decision based on an overheard conversation in a bar, so why make a big financial decision based on a short social-media message?”
Another Headache For Astana
Further details about the source of the rumors in Kazakhstan, and whether there is any substance to them, will have to wait until more is learned about the case.
But the incident is almost certain to add to the Kazakh government’s worries about the expanding presence of social media in the country and its ability to bring people onto the street with almost no forewarning.
Until now, the government has mostly been concerned about the use of social media for calling protests, including one on February 15 against the recent devaluation of the tenge. The unsanctioned rally brought some 100 people to the Almaty city hall, where police detained several dozen.
But the run on the three banks appears to have touched a still more sensitive nerve in the Kazakh ruling establishment than that rally.
“When people were calling people to protest…in advance of the Saturday [February 15] protest, they also used WhatsApp,” says RFE/RL’s Kazakh Service correspondent Dina Baidildayeva in Almaty. “But no one was trying to find those people who were calling for the unsanctioned protest. [However] in this case, the banks say they have filed a complaint to the prosecutor’s office to find the people who spread the information about them going bankrupt.”
Both political and financial power in Kazakhstan are tightly concentrated in the hands of loyalists of President Nursultan Nazarbaev. The chairman of Kazakhstan’s Central Bank, Qairat Kelimbetov, held a press conference on February 18 in Astana to reassure the public that all three of the private banks are stable.
Radio Free Europe / Radio Liberty