For centuries, banks have built their business models on the foundation of customer confidentiality. Secrecy and security are by-words in the world of banking. How can they be expected to embrace social media, a platform where things appear to be "open" and "public"? There is much for banks and financial institutions to worry about when it comes to social media given that compliance and regulation cannot be compromised. But it is a different kind of worry now: leverage social media or risk losing their customers. Many of them know they cannot ignore the fact that social media puts them in direct touch with their customers and develops a stronger relationship. How much longer can they ignore the fact that social media may contain clues to their customer behavior and sentiment that can help improve customer experience?
Change in the air
With the growing use of smartphones and tablets, social media is becoming part of not just everyday life but part of every moment of life. Some banks and financial institutions have recognized this. They have ventured into using social media to create new services, enhance old ones, and find ways to address young customers. Innovators have begun with simple but powerful initiatives like providing information to customers about products, generating leads and disseminating information about corporate initiatives in a bid to attract better quality of talent. Wells Fargo, historically the first bank to embrace the Internet, has begun to test social media (blogs and video) for its retirement planning products . It uses social media as a two-way channel to talk about its environmental stewardship and about loans for students. And it has several Twitter accounts that promote its sponsorship of sporting, entertainment, philanthropic events and community involvement . Its Facebook page is used to respond to queries from customers .
The good news is that social media interaction can be analyzed by banks to understand the kind of products customers need, how customer segments respond to stimulus and what they feel about the brand. Increasingly, social media channels are being used to service customer complaints.
The key issues before financial institutions
The problem with social media is that there are no set processes or best practices. Social media continues to evolve. Finding how to leverage it best is a matter of continuous experimentation—something that is not part of the DNA of financial institutions. In addition, it requires a cohesive strategy across social channels to cross-leverage strengths, build ROI and provide a seamless experience to customers. Finally, it requires resources and a governance model that can be an overhead in already resource-stretched organizations.
Moving to social mobile integration
Unlike most businesses that allow users to access their services using their Facebook or Twitter authentication, banks are naturally cautious. You can't use your Facebook login to access your bank account. That may still be a mildly distant reality. But there is a reality that banks must face sooner rather than later: that their customers are on social media channels and that is where they should be available to their customers. It is the same as banks having their offices in the heart of the business district of a city. Australia's Common Wealth Bank has understood this and created an app that allows banking within Facebook . Using the application, account holders can make peer-to-peer payments to friends on Facebook by using their mobile numbers or email IDs. Users can make payments for Facebook events or request payments from friends. In addition, the application allows customers to check their account balance and transaction history and transfer money between accounts from within Facebook.
While social media integration helps financial institutions listen to their customers, attend to their needs, track trends and improve the customer experience, it must also move towards mobile enablement. Social and mobile are increasingly becoming two sides of the same coin—inseparable.
The intersection of mobility
Customers of financial institutions find it easier and more convenient to work with their smartphones and tablets. These devices are not only becoming smarter, but with falling device and data access cost, it is the preferred mode of 24X7 contact, especially for younger customers. Service providers who are available on their mobile devices will be favored over those who are not. Is it any surprise that every successful social media platform has a mobile channel? Apps for social channels are available for every conceivable mobile OS in a bid to ensure that no customer is isolated from the mobile-social revolution.
Banks must begin to think of innovative ways to leverage the two emerging technologies—mobile and social media. They must ask themselves simple questions: Which is the largest segment of customers who want services that are social and mobile? What are the mobile and social services would they benefit from the most? Which of those services can be monetized? Which services will give the highest ROI? Once a business case is built, the financial institution will begin to understand the value that can be created and help them evolve into the organization of the future.
Is your organization's social media & mobility strategy future ready?
About the Author: Ben Trowbridge is an accomplished Outsourcing Consultant with extensive experience in outsourcing and managed services. As a former EY Partner and CEO of Alsbridge, he built successful practices in Transformational Outsourcing, BPO, IT Outsourcing, and Cybersecurity Managed Services. Throughout his career, Ben has advised a broad range of clients on outsourcing and global business services strategy and transactions. As the current CEO of the Outsourcing Center, he provides valuable insights and guidance to buyers and managed services executives. Contact him at [email protected].