Social media paving way for innovation in banking

Sandeep Gupta, India Infoline News Service | Mumbai | September 10, 2014 14:05 IST

However today, apart from branch banking, internet banking, restricted transactions through ATMs and mobile banking are in place. But the world is increasingly on social media and the need of an hour is to leverage the power of social media.

Today, customer expectations, needs and wants are changing at the speed of a Facebook comment. Every company is endeavoring to provide a consistent and seamless experience to their customers, and is keen on becoming pioneers in setting world class benchmarks for customer service.
 
We all know that the traditional approach to banking involves brick & mortar where the customer has to visit the branch every time he needs to make a transaction. However today, apart from branch banking, internet banking, restricted transactions through ATMs and mobile banking are in place. But the world is increasingly on social media and the need of an hour is to leverage the power of social media. This is true not only for banks but all corporations that have customer service division\operations. E.g. Facebook has more than a billion users and Twitter has more than 500 million users. Apart from transactions, banks can get feedback on their products and can gauge the needs of the customers through social media, on basis of which banks can do targeted marketing and promotion.
 
In an increasingly competitive landscape, no bank can afford to be left behind in adopting effective means to perform operations. To reach out to large numbers of people, of which the majority is young, social media is the platform to tap. Modern banks are exploring ways to reach out to their existing customers to sell more products, and also acquire new customers. Anything associated with social media appeals to the younger generation to a great extent. The day is not far away when all the banking needs and transactions will occur through social media. Pockets from ICICI bank is one such example of social banking already underway.
 
In the future, these applications will be used not only by banks but also other industries such as Retail, Manufacturing, Auto, Consumer among others.
 
Emerging Trends in Social Media Banking
 
Social media data and marketing: A few banks have already made the shift from using social media simply as an engagement tool to actually marketing products and services through the channel
 
Consolidating social media efforts: Banks will begin to centralize their focus on one or two social media properties that they find are the most effective in customer engagement and marketing
 
Deepening small business customer relationships: Banks will start offering training to their small business clients on how to leverage and sell their products through social media
 
More regulatory guidelines: Banks will need to be prepared for more regulatory scrutiny in the future. They should have the support in place to handle customer service requests through Twitter and Facebook
 
Big data analytics to process customer data and generate insights will be extensively used
 
Enhanced safety and security of customer data will be a top priority
 
Transacting and account information through social media banking
 
Benefits to businesses
 
Helps grow business by identifying targeted cross sell opportunities
 
Boosts productivity of employees in organization by providing inputs for collaboration on product campaigns
 
Helps reduce cost of business by emitting early signals of potential fraud
 
Effectively aids strategic decision making for business expansion by providing insights on market and competition
 
Helps improve customer service by getting user perspective on bank’s products and services.
 
Benefits to the customer
 
Increased customer satisfaction due to early and prompt query resolution
 
Banks proactively contact customers on understanding the latter’s needs
 
Hassle free transactions through single login: The customer can perform all banking transactions through their social media login, without having to carry their banking credentials or visiting the branch.
 
The author is Head, Banking and Financial Services, Nihilent

 

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