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.
Integration of social networks into online banking might bring many advantages to both customers and a bank. Fully agree to the point that social networks help banks know their customers and use these channels for the marketing purposes, and moreover via these networks banks might reach potential customer base – these are the considerable possible advantages for a bank.
The advantage for the customers: firstly, the integration meet customers expectation and give them satisfaction (because almost everybody uses social networks nowadays) and secondly, according to this Bankfutura’s post (http://www.bankfutura.com/2012/07/would-you-share-your-savings-goal-on-facebook/) and its recent research findings (http://www.bankfutura.com/knowledge-base/creating-outstanding-personal-finance-management-services/), customers – 30% of the Germans – are willing to share their savings goals via social networks, and when they share it they most likely stick to their goals and maybe would be able to ask help from their friends and families to reach their goals. So, the integration might bring benefits to both parties
The ability to communicate with customers via Social Media effectively, understand their needs, sentiment and respond to inquiries promptly becomes every day more important to banks. If integrated into banking products or as a standalone communication channels it allows customers to share information, possibly influence new products/service offerings and indeed helps both the customer and financial institution.
All banks understand the importance of adopting a more customer centric approach. A crucial part of this is to gain a deeper understanding of existing customer needs, to become aware of the channels they prefer to use, and to reach out through these channels. In addition, addressing new customers/prospects in particular those in younger age groups will be imperative for future sustained growth in banking. These younger generations above all use the likes of Facebook and Twitter to stay in touch. Thus, engaging with customers via Social Media provides indeed a unique opportunity for banks and customers alike.