Banks failing to fully exploit social media

Source: GFT

GFT's recent study, Impact of Social Media on the Financial Services Sector reveals that only a minority of financial service providers exploit the potential of web 2.0 tools, concentrating on one-way social marketing activities, instead of integrating social media elements into customer relationship processes.

The study found that Social CRM gives banks the opportunity to create tailor-made services through the gathering and analysis of big data. GFT, an international provider of innovative IT solutions and services, conducted the study together with researchers from the IESE Business School in Barcelona.

With more than 1.5 billion users of social networks worldwide[1], financial institutions can no longer ignore this revolutionary channel of communication. After avoiding it for years, banks are now beginning to accept and understand that social media is becoming key to achieving their goals and that any strategies undertaken in this area can have a direct influence on their business.

Christopher Ortiz, Managing Director of GFT UK explains, "The GFT study shows that, until now, most 2.0 initiatives in the finance industry have been focused on social marketing; in other words, they have served more as new channels of one-way communication, through which institutions have sent out messages, offers and information about their services or have collected data about their own customers".

He continues, "The moment has now come to go one step further and achieve true direct interaction through social media channels. This means proper two-way communication between customer and financial institution. Social media will not be a true opportunity for banks until they can share in the customer's experience, understand and anticipate the customer's needs and respond quickly and effectively to those needs. Combined with the impact of mobility on banking, social media is a potentially game-changing offering for financial institutions".

GFT's study indicates that it is vital to integrate the bank's social media strategy with its customer relationship management programmes (resulting in Social CRM). Social CRM focuses on commitment to the customer, as opposed to the traditional method of customer management. Therefore, it is absolutely essential to improvpprove the business processes and support technologies and help achieve the following goals: acquire, retain, understand, listen to and collaborate with customers.

New trends in the financial industry
A large number of new business models including elements based on the social web will emerge in the coming years and will expand the financial business. The GFT study claims that, thanks to social media, there are further new ideas that have been advanced for financial services. For example, peer-to-peer (P2P) loans or micropayments, or banking communities. Although some of these new models have not been adopted at a large scale in the global financial market, it is important to watch them to see how they evolve because they can become new lines of business for financial institutions in the not too distant future.

Another trend that the financial sector cannot ignore is the major challenge posed by Big Data. The huge volume of quality data that can be extracted on customers (relationships, trips, behaviour patterns, etc.) is a huge opportunity for banks to be able to design and implement tailor-made marketing with each of its customers, that is better suited to their needs.

In fact, taking advantage of the use of social media and its convergence with other factors, such as mobility via smartphones, is vital for banks to be able to accompany their customers at all times and, wherever they might be, to be able to offer services that are best suited to their needs or a fast response to any problem that may arise. 

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