I wrote in an earlier blog post about the challenges and opportunities of multi-channel banking. However, there is one channel that deserves particular attention. It is a channel many banks have yet to wake up to fully, even though a huge number of their customers use it every day.
Specific social networks may rise and fall, but social networking is here to stay.
Social banking starts with customers discussing their banking services and experiences online. Sentiment analysis employs automated systems to determine not just when a brand is being talked about, but whether the opinions being expressed are favourable or unfavourable.
But what happens when customers do not just talk about their bank using social media, but want to use Facebook or Twitter – or the next world-conquering social network – to interact directly with their bank?
Would you “like”, “friend” or “follow” your bank?
Social networks are already enabling financial transactions such as in-app purchases. Facebook recently passed a billion users per month. With robust verification and security, opportunities to communicate with these vast user bases increase enormously.
Most obviously, and traditionally, this is a marketing channel. The value of marketing increases in relation to how well the bank knows the customer, and how tailored marketing offers can become. Social networking opens new doors for targeted campaigns to “the market of one”.
Social networks can also facilitate immediate communication either with specific audiences or the entire customer base, in emergencies such as ATM outages or as an integrated part of customer service.
We are only beginning to see the impact of social networking on banking services. But we have already seen some adventurous moves by early adopters.
One bank has set up a “virtual branch” inside a social network, allowing customers to “drop in” and chat with advisers. Another, a “start-up bank” in Germany, is using Facebook to log customers into its online banking services.
The same bank is also experimenting with services such as peer-to-peer lending – not just banking through social channels, but making banking social.
As banks become more comfortable with leveraging the power of social networks, we may see changes not just to how they reach out to customers, but also to the services they offer, and the expectations they need to meet.