Social Media in Banking: Hyper Yes, Hype No
"Facebook me", says a character succinctly in the film "The Social Network".
Is there greater proof than social-media-sites-turned-verbs of the size of this phenomenon? Still, I'll throw in a few facts:
• 1 out of 8 online minutes is spent on Facebook
• People spend an average 1.8 hours a week shopping; 2.3 hours browsing; 4.4 hours on email; and a whopping 4.6 hours doing social stuff.
• And social networking has caught on faster than any other technology in the history of mankind.
And yet there are people who think this is hype! I ask what could be more real.
In fact, 'social' has even made inroads into the conservative financial services space. There are at least 1,430 banks from 70 countries using Twitter to prove it. And they're putting their money where their mouth is - a survey of 166 executives working in financial services says that by 2015, not a single firm will be without a social media marketing budget, however small.
The fact is that these firms have little or no choice, but to go the social way. Already, banks and financial advisors are ceding their influence over customers to social communities. The online behavior of uber-connected Gen Y is driving many banks to consider placing a virtual entity within social networks which can connect consumers directly to the bank from a social site. This means that someday in future, banking transactions will not only occur in traditional channels but also through ubiquitous exchanges, of which social sites will be a major part.
Banks are also discovering that social media can work as a catalyst for innovation and co-create products. So, they're spreading financial literacy in virtual worlds like Wells Fargo's Stagecoach Island; or like DBS Bank, announcing contests to crowdsource design ideas for a Gen Y branch; or improving their processes by benchmarking against social media.
Those that have taken the lead in this manner have managed to acquire customers, strengthen service and relationship, and differentiate themselves in a crowded marketplace.
Did someone just say 'hype'?
