SOCIAL MEDIA & THE RETAIL BANKING SECTOR

Banks Need To Act Now and

Get on the Social Media

Bandwagon

Retail banks and businesses around the world

are working on ways and means to leverage

the power of social media to reach out and

connect with their customers.

Today’s financial services customers demand

an ever widening array of service and

communications choices from their banks.

Indeed, the days of visiting a local branch to

conduct most transactions are long gone. And

with the growing amount of time consumers

spend online, and with social networks and

social site features, banks are regaining an

opportunity to make up for the lost personal

interactions traditionally conducted in the

branch.

Outside of financial services, consumers already are connecting with many of their preferred brands via social media, and recent Forrester research shows that a sizable portion (42 percent of online adults on social networking sites) are interested in engaging with their financial providers as well. In fact, when asked the top three ways consumers would like to interact with their financial services firms via social media, they listed the following • Alert me about upcoming promotions and specials • Offer customer service • Let me read reviews from other customers • Offer financial advice • Present relevant financial offers to me • Reward me for recommending the brand • Post educational information about personal finance • Let me post reviews, complaints, and questions • Access applications to improve my financial situation

• Create a profile page so I can become a fan Banks need to adopt social media in some

form or other in order to stay competitive in

the marketplace and remain relevant to their

customers.

However, banks need to take a measured yet

active approach to social media. Right from

the start, banks should cut away the hype of

social media and look at the real

opportunities, risks and resources that would

be required to not just participate in social

networking, but to get it right.

Taking a measured approach also allows

banks to identify all of the key

interdependencies and then carefully plan

and prepare for the changes that will be

needed to enable their strategy.

Culture, processes, controls, technology and

governance of banks will all be affected by

social networking and each takes careful

planning to convert.

Benefits of Social Media in the

Retail Banking Sector

Social Budget Planning: Social gaming has

proved to be remarkably addictive among

gamers. Mobile or social apps that let people

compete over their personal budgeting

targets could drive more careful budget

planning & financial prudence.

If a group of friends decide to collectively

budget towards a savings target, they could

agree to share how well they were performing

against self-imposed goals. Personal financial

data would always remain private, but

benchmarking against targets for weekend

spending, for example, could earn gamers

reward points & bonuses.

Social gaming is a great example of how

innovative, social financial products can be

used to engage retail banking customers.

Enhancing the Brand: Social media can play

an important role in differentiating brands

and making them more relevant to

consumers.

Banks can use open forums on social

networking sites like LinkedIn to create new

touch points that will drive brand attraction

and give the bank a chance be involved in

important conversations among its

customers.

Marketing & Promotion: Banks that are using

social media to brand themselves or to

market a specific product or service have

found success by integrating social tools into

their existing campaigns or creating new ones

that capitalize on the spirit of the community.

There are so many cost effective ways of using

social media to market a bank, for example,

bright ideas that are mentioned in meetings

could be shared with customers using social

media channels, and it would be a way to

create value for customers that requires only

a small marketing investment. Banks can

share ideas and information through blogs

and short videos distributed on video sharing

sites like YouTube.

Reducing Costs: Social media can be a major

contributor to banks’ ongoing cost reduction

process in areas like marketing, sales and

customer service. Banks can use social media

as a low-cost communication channel to

distribute messages, host conversations,

provide customer service and discover

unhappy customers.

Track Market Trends: Traditional, product

design and positioning is often developed and

implemented from the bank’s perspective of

what customers want. Social media, however,

enables the bank to capture customer

demands and suggestions which the bank can

then analyze to develop customer-centric

products and services. Social media also

allows customers to be involved in the

product development process through

suggestions and feedback.

Conclusion

If I could predict the future, I will say, there

will be a full transformation of the retail

banking sector into a more socially integrated

system.

Although the bank branch network will

probably not be erased, there is every signal

that the rise of social media will dramatically

alter their value. Everyday transactions will be

conducted through social media applications

that will enable the bank to validate

identification and serve up balance

information and payment functionality using

the social network’s authentication system.

Complex bank transactions such as mortgages

and loans will move onto social networks as

bank representatives engage with clients over

video or chat applications like Skype rather

than the traditional face-to-face service.

To conclude, social media should be seen as a

new channel to communicate with clients and

strengthen relationships. While it may not be

possible to address all banking needs of retail

customers through social media, it is

definitely not impossible.

The implementation of a social media strategy

requires involvement from all lines of business

and departments within a bank. Social media

strategy cannot be effectively implemented in

isolation by the social media department

without the active participation from all the

other departments in a bank.

To be successful in social media strategy

implementation, banks should regard all

channels as integrated, relationship-focused

entities; working together to improve the

client experience.

About The Author

Michael Chinwuba is a consultant at

SpreadBox Ltd. Michael has extensive

experience in mainstream television

broadcast production and communications

technology having worked for prestigious

broadcast media giants BSKYB and Virgin

Media.

Michael has also worked as a consultant for

technology consulting firm BAE Systems

Detica where he managed major projects

involving strategic marketing and creative

social media implementation and delivery for

leading commercial companies.

Michael has a passion for providing clients

with strategic advice on how best to utilize

video and social media marketing applications

to boost their online presence and increase

revenue.

Michael has attained a Bsc in Computer

Communications from the University of

Westminster and an Msc in Business

Management from Imperial College London.

About SpreadBox

SpreadBox is a social media marketing

consultancy which specializes in producing

high definition online videos and custom built

social network profile pages to enable

businesses to effectively promote their

services and identity across social media

networks. We use high quality video recording

equipment to capture the best shots possible

for your web video.

We assist organizations in developing a

strategy on how to reach out to new

customers and to communicate with their

existing customer base through social media.

We also design and implement simple,

engaging and social media friendly websites.

Website: www.spreadbox.co.uk