SOCIAL BANKING

SOCIAL BANKING

Today social media is mainstream media. Social media provides banking through the social platforms. One of the key observations with regard to changing consumer behavior is that most of the people are spending considerable amount of time on social media platforms, so why should the banks not embrace this opportunity and offer banking product and services through these popular social media platforms? To start with social banking is connecting banks and social networks. The bank can share ongoing campaigns and offers on the social media. Customers can also check all the details. Other way to share specific campaigns to specific clients is the secure messages system.

Banks must look towards embracing the new social tools enabled by digital technology to realize the full potential of social media enabled capabilities. A Gallup Inc. poll conducted in US in 2013, found higher conversion rates when banks interact with potential customers using digital social media. When considering a new financial product, more than half of the customers did some research about it. Customers who did research are more likely to make purchases. But what is important here to note that conversion rate differed massively depending on their research through social networks were 18% more likely to make the purchase, compared with 9% of bank’s website, 8% over the phone and 6% at the branch.

This shows that bank customers would like more and more opportunities for peer to peer connectivity and exchange. More and more customers post review online and in some places including China and India, nearly 80% of online users go to social media before making purchase. Banks can no longer ignore the social aspect of their business.

For a digital bank defining its social strategy and vision can be challenging considering the breadth of possibilities presented by social media. Where one bank may focus on improving customer experience by providing financial advice forums, another may prefer to enhance product innovation by introducing customer reviews. Banks should begin with one key question - “How can the social media help us achieve our business objectives?”

It’s easy to fall into a trap of deploying overly broad social initiatives that attempt to address every possible need and usage scenario. To avoid this, stay focused on your strategy and vision while incrementally building social pilots, expanding your social ecosystem and augmenting traditional bank channels.

There can be common strategic themes supported by social banking viz;

• Enhance online brand presence and recognition

• Improve customer experience and service

• Segment customer base and gain customer insight

• Drive product innovation and ideation

• Increase revenue through marketing

• Reduce operating costs

• Support recruiting

The social media revolution has already happened, transforming not only customers’ daily behavior but their expectations from their financial partner or bank. In today’s social world, customers demand to be heard, understood and valued. If banks want to drive stronger, sustainable and mutually beneficial relationships in this new social reality, they must learn more about their customers – and listen when they speak, this is a must and banks should not compromise on this.