Social media has by now started to intrude the banking industry as it did in many other sectors. With the impact of social media, the world is witnessing a steady increase in the number of people using social media as part of their daily routine. More and more social media users expect their banks to offer services via these timely distribution platforms. If banks are to connect with their customers and deliver a twenty-first century banking experience, it has become indispensable that they leverage this fast-emerging alternative banking channel. But are the banks in our country ready for the Generation Y?
Though almost all foreign banks working in Bangladesh have official presence (at least head/main office) in social media platforms, no government banks have this type of arrangement at all. Among thirty-nine private commercial banks, only fourteen have official Facebook accounts so far. Out of those banks, only one is from first generation private commercial banks and the rest belong to second, third, and fourth generation banks of our country. Some banks have leveraged social media in a fairly broader way though. DenizBank in Turkey opened a Facebook branch, letting customers access their accounts, transfer money, apply for credit, etc. Commonwealth Bank of Australia extended the Kaching product app to Facebook, enabling payments, access to account information and transferring money between accounts. Royal Bank of Canada has P2P payment service facility between Facebook friends. Even in India, ICICI Bank launched an app that lets users pay friends and track group expenses via Facebook. The bank also supports the uploading of funds to prepaid accounts and buying movie tickets online.
Actually, banks can avail the social media opportunities in a number of ways more efficiently and effectively as well. One of them is creating customer awareness. Say, a customer regularly visits a local restaurant. Based on this information, banks can run focus marketing campaigns on the social media more efficiently offering meal-related deals like discounts, cash back offers, and loyalty points.
Some customers may post information about their upcoming foreign visits. The bank can apply this information to put forward foreign-exchange-related products like cash dollar endorsement, prepaid card, and international credit card etc. Based on customer activities on social media, such as posts and likes, banks can utilise analytics to generate leads from this data, which can be used to carry out further analysis and undertake appropriate actions.
Customers use social media to update friends and family about the recent birth of their children. The bank can make use of this information as a pointer toward possible changes in their life stage needs, and recommend suitable products. Thus, banks can easily obtain customer insights by leveraging this data on social media, of course complying with data privacy regulations.
Banks can leverage social media to collect feedback from customers about improving quality of products and services. For example, a customer posts on social media about the cumbersome nature of the bank's account opening system. The bank notices that many customers agree with that and some are proposing alternative solutions as well. Banks can use this input for modifying the account opening system to augment customer experience. In fact, banks can avail the social media engagement for enjoying the crowd sourcing of banking ideas. In this way, banks can dig up innovative banking ideas creating new categories in the market for catering to the customised and varying demands of the customers.
A customer may have difficulty using debit card and complains about it on Twitter. The bank can take action proactively by reaching out and resolving the issue effectively turning a negative thing into positive. As social media allows real-time interaction, it enhances a bank's ability to reply to customers in a timely, intuitive, and personalised manner thus enhancing the overall customers' wow experience.
A customer may like a bank's campaign message on Facebook or re-tweet a bank message on Twitter. This will lend a hand to promote the brand image of the bank. Because social media is broad-reaching and region-natural, banks can leverage this platform to spread out the reach of their branding efforts.
Suppose, your bank has come to know a trend of negative sentiment about any product, service, or activity you are offering. The bank can proactively take remedial measures by engaging with customers to tone down the would-be reputation damage. As social media is inherently open and dynamic in nature, this medium can intimidate a bank's reputation, if there is too much negative chatter on social media. By proactively leveraging these media, and hiring and training social media savvy bankers, banks can deal with negativity in a timely manner to a larger audience. On the other hand, banks can make use of positive messaging, such as highlighting bank-related social and community activities, to enhance their image.
Social media offers a platform to boost customer loyalty by engaging with customers via interactive campaigns, positive messaging, and simply being quick to respond to customers' troubles. This can also help increase positive words of verbal communications leading to increased customer advocacy. If a customer feels his queries are addressed regularly in a timely manner s/he will raise his affinity towards the bank brand leading to greater customer loyalty. The customer could become a brand promoter for the bank on social networks.
Yes, the other side of the coin is that the open and unmoderated environment of social media poses some risks, including data, security, privacy, reputation, and legal risks in some cases. Keeping those points in mind, banks need to develop an optimal social media strategy by taking a careful approach toward mining, governing, and mitigating risk emanating from using social media data.
What people say about your bank matters much more than what the bank says about itself. Gone are days of self drum-beating through paid advertisements. Ironically, the brand executives are losing their control to the people in this age of access to information and freedom of speech. The connected consumer voice can either leave a big bank powerless if not treated as it should be, or engender new business avenues if treated properly. Banks failing to suitably deal with the social media conversations and to notice the opportunity to build longer lasting relationships with customers will likely lose out to competitors who do. So, banks should strongly consider becoming more socially aware, responsive, and professional to increase ROI, customer acquisition & retention, sales opportunities, and to reinforce the brand image.
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