Banking on Social Media Platforms

Social media

Today, social media has become a new and important skill for all, even for those who do not even know a bit about IT. In recent years, access to social media by billions of users around the world, has led modern society and lots of people to concentrate on these kinds of Medias and also makes a considerable popularity, especially among the younger generation significantly. Knowledge of these media makes users to use these tools more useful and effective.

Social Medias and their comprehensive development are Undeniable reality in the modern world. Statistics indicate growing use of social media. Today, more than 2 billion people in the world use social media. In January 2017, the use of social media has intensified in such a way that Facebook has 1.871 billion, WhatsApp a billion and Instagram 600 million active users. 

However, due to increasing Internet penetration and access of all communities to smart phones, tablets and mobile gadgets and also having a convenient access to programs and applications, the use of social media has grown rapidly. Overall estimates suggest that nearly two-thirds of active Internet users are active in social media activities too.

The use of social media is changing its old mainstream from entertainment to the opportunity to work and trade.

As a sample, 99% of Americans have cell phones, but they’re speaking less than ever before. Twenty-six minutes per day are spent texting while only six minutes occur on calls. When it comes to conversing with others, 25% of people socialize more online than in person, 32% would rather text than talk and 51% of teens would prefer to communicate digitally than in person.

In a study among 3,700 worldwide important marketers in 2015, 92% acknowledged that social media for their business is very important in this population, 66 percent have pointed out to plan to upgrade and expand their use of Twitter, YouTube and LinkedIn networks. 93% of them have used Facebook and 68 percent of them seek to know more of the social network.

Despite the growing of podcast network, it is now only used by 10 percent of marketers. In this study, when marketers were asked to select only one network, about 52% selected Facebook and 21 percent selected LinkedIn too. 91 percent of marketers were willing to access better tactics and effective methods through which they can link their audiences and customers with social networks.

According to the predictions, the growth of the number of these users will continue in the coming years and in 2020 it will be about three billion. 

Banking and Social Media

In the banking industry where customers' interaction is necessary, digital communication is becoming a strong communication channel between financial institutions and customers. Digital Medias are considered valuable tools for potential clients to connect to the bank.

Digital channels allow people to go through Facebook, Twitter, YouTube, Instagram and other social networks to gain the necessary education and information regarding the services, products and financial institutions.

However, many managers believe that all social media users are a group of new generation who were born during the explosion of digital technologies and have a precise understanding of these technologies but the truth is that the number of users over 50 years in social media is on the rise.

Welcoming the communication networks has attracted the attention of various businesses. Among the companies and groups who are using social medias, banks consider this field as an opportunity because their life depends on customers.

The world's leading banks are in an effort to further with creativity and innovation capacities to achieve this business opportunities, although it's threats and risks are found.

Banks can use social networks to inform their customers about their products and upgrade them according to customers' feedback.  Users of these services or other readers may leave a comment or Like.

On the other hand, there is the talk of turnover in social networks. Social networks can act like wallet.  It means that the purchases can be made through social networks. At the same time, turnover could happen on social networks or a combination of these, which is lending, the circulation of money and the flow of information.

Traditional banks used strategies such as advertising, direct mail or face to face in order to provide services to customers, but now banks and other financial institutions' approach have changed from providing customer service to interaction or partnership with customer.

To do this, banks should raise a better understanding of customers' interests, emotions and behavior, and this knowledge can be obtained through the analysis of social media.

Today, customers expect that they should be heard and answered and receive the services they need through social media.

They need to bring up their expectations of banks through Facebook, Twitter, Google Plus and other channels instead of direct meeting with officials or bank managers.

Monitoring centers, commenting and confirming on social Medias can give a general perspective of customer perception about services and products to banks in order to obtain an accurate understanding of customers. So customers' expectation and their passion for digital channels, enforce banks to have an effective presence in these channels.

In the meantime, Asia due to its high population and younger generation will have the highest growth rate in taking advantage of this potential in the field of banking. For this reason, banks of Asian countries, especially Southeast of Asia are trying to make virtual potential opportunities into actual business opportunities.

The analysis of Big Data is one of the requirements of banking success in the context of social media. Collecting and analyzing the data of the customers, is so necessary for the success of any business. This issue in social media in which data is generated in the moment is much more critical. Also according to the range of data sources such as Facebook, Twitter, YouTube, Instagram, etc., and the variety of data formats, you see data collection, filtering and analysis of this data is very complex.

While this data is to be combined with other data from other customers' touch points such as branches, call centers, websites, ATMs and EFTPOSs, banks should be more customer-oriented than in the past and have ways of integrating the data and learn how to gain insight from customers and convert this insight into the valuable products and services.

Social networks provide opportunities to the bank, customer services and marketing and also to the products and services. Imagine a future in which all deposits, payments, fund transferring and investments can be done and easily managed through social networks, in such a world, the importance of cash is reduced; this is in addition to reducing printing costs and maintenance bills, is also associated with more financial freedom. In this future, issues such as P2P lending, Crowd funding and Microfinance in the context of social media will be highlighted.       Your friends can help you achieve the financial goals and figure out some kind of financial freedom through online transfer funds or financial guarantees.

In this way, the gap that currently exists in this industry will decrease dramatically. Performance of the financial services industry as a result of the growing presence of social media has changed; the industry in terms of expanding the scope of financial services, reducing costs and serving customers better, has a bright future ahead.

Experts believe that the pathway to social media is through listening to the customers.

First of all it is necessary for banks to understand customers' needs and demands properly by analyzing their data in social networks.

 In the second step and after determining the target customers, banks should be more in the context of social media to engage with them and to carefully analyze their needs and desires. Based on information from the customer, as a third step banks can use, design and provide products and services which customers expect.

In the next step, by using the information and experiences, banks can expand their capabilities and resources in a way that meets the future needs of customers.

The fifth step is communication development in order to improve the brand perception and the reputation of the bank. In the last step bank should attract fans and increase the loyalty of existing customers by using customers' feedback and analyzing their interactions with each other.

Social Medias can greatly affect the reputation and the brand of the banks. Banks need a transparent understanding of the key elements in the development of social media and adopt a road map and a strategy with cultural plat in the field of social media.

However, almost all experts acknowledge that social Medias contain risks for both managers or directors and customers.

As social Medias are so pervasive and data transfer through them is non-refundable and cancellation, it may act as a double-edged sword if wrongdoing is found banks will face dangerous risks.

As a result, many banks are wary of social media to highlight and promote their products and services on it.

At the end of the argument the list of the top banks that have global popularity on social networks is offered.

In this regard, a special institution called "The Financial Brand" has created a ranking called "Power 100" to show the activist competitors banks in social networks. The name ranking of the Top 30 banks in terms of activity on social networks like Facebook, Twitter and YouTube are introduced at different time intervals as below:(table 1)

The top banks using social media ranked by their overall Power 100score for the fourth quarter of 2016