Fresh Shift in Banking on Social Media - 6 Essential Drivers

A recent study on banking in social media, revealed that there is hardly any difference in the way banks design their social strategy for different geos. Innovation in social features is soon to become mainstream amongst all North American banks with considerable increase in investments on technology and infrastructure. At the same time, banks in other regions are also luring customers with ‘hard to stay away’ sticky features. Financial institutions are rolling their sleeves to shed the hitherto conservative image and adopt a fresh look that appeals to ever changing consumer preferences.

Governance

Banks have formulated governance and updated group policies on social usage to meet their objectives like communicating with the customers, straight through processing, personal information, customer privacy, marketing, and sales. RBS has a social media governance policy that helps the RBS staff including the RMs and the marketing teams from different divisions’ promote social media usage on Facebook, Twitter, and LinkedIn in accordance with the bank’s guidelines.

Regulations

Banks are looking at regulatory bodies for guidance on usage of social media. This is essential as platforms become mature and upgrading infrastructure later would be costly and cumbersome. Most banks are following the current best practices in handling customer privacy, data processing and information sharing.

Culture shifts

Social media is no longer an optional capability for banks. But to drive enterprise buy-in, the foremost requirement is being open to the idea. Social impact is a reality unlike virtual currencies which takes time for mainstream adoption. Banks must understand that their customers have moved from passively to actively tweeting/blogging on their products and services. The reach of the internet and messages broadcasted through the medium is something I leave to your guess. It drills down to being proactive and establishing a roadmap from the social media strategy rather than being reactive.

Innovation is ‘bare minimal’ for differentiation

Consistent innovation is essential to keep your social media strategy abreast with changing times (Refer to the Maturity Model in attached link). One fundamental fact that banks should notice is that; in a technology driven business, anything is new until the next breakthrough is out. And it happens at unimaginable speed. A constant and vigilant eye on the social pulse is necessary.

The human factor

“Media is an extension of human”, said Marshall McLuhan. Social media surge can be attributed to the most intrinsic needs of human beings – “to be heard”. A quicker turnaround time in query resolution, crowd sourcing of ideas for new products, loyalty programs and other factors can work wonders in customers pledging loyalty to banks. Recently, banks started rewarding customer loyalty at the branch level but this should be blanket online and specifically social media.

Internet of Things

Social banking has unleashed the genie from the bottle. Gartner predicts that more than 26 billion devices will be connected by Internet of Things by 2020. Bank infrastructure will need to be spruced up to match the burgeoning number of connected devices. This also calls out numerous opportunities that manufacturing and retail industries are tapping. A bank’s Relationship Manager can address a request for dispatch of new cheque book or educate the customer on remote cheque deposit feature on the mobile app. We envisage that by the time Internet of Things takes center stage along with WEB 3.0, we might see the rechristening of banks as “financial service providers”.  

I see unlimited possibilities and opportunities that are to follow from banks providing the above capabilities, be it - customer engagement or insight generation from volumnous data that will be available.