Can Banks Benefit from Social Networks?

When was the last day you spent without checking your social network accounts? Having gained their popularity in 2002-2003, social media have engaged around 2.46 billions users worldwide. We enjoy Facebook, Twitter, Instagram, etc., for various reasons. There is so much we can do there: watching videos, reading news, communicating with friends, finding interesting events, sharing photos and thoughts — this list can go on and on. We can hardly imagine our lives without public networks. They have become a phenomenon of modern society.

Social platforms are also known as strong tools for marketing research. People willingly provide personal information about themselves in their accounts. They easily make valuable personal data available for everybody. This is a chest of wonders for targeting advertising. Thanks to such users’ generosity, advertisers identify individuals that might get engaged by their advertisement and send them a message, depending on their profile information such as age, location, job or hobbies. Many users don’t even realize how important and valuable their personal profile is for marketing specialists.

Advantages of social networks for banks

Engaging community and building client relationships

Citizens Bank of Edmond showed a good example of engaging people in the neighborhood by the means of social media. They started a street festival called “Heard on Hurd” every third Saturday from March through October. The bank used its Instagram account to inform the local community about the occasion. The festival attracts attendants with live music, street food, three dozen pop-up shops that show the bank’s support for small business and how the bank can help build the community. The festival has grown into an incredible event over time. There were only 300 to 500 attendees at their first block party. Later, they got 3,000. In the summer of 2016, each event drew 20,000 to 30,000 participants.

Recruiting

Social media is a goldmine of prospective talents. SN is proved to be reliable networks for finding qualified job candidates on the one hand and good companies to work for on the other. For example, Avidia bank shows its corporate culture by covering behind the scenes of the bank in social networks. This tactic attracts young professionals. Carrie Anne Cormier, the vice president for retail operations, claims that many people who want to work in the bank reach out to them because of what these people had seen online.

Finding new customers

Social media is starting to be a business generator for banks. The statistics which First Bank Financial Centre has got prove that. They have attracted about 3,400 visitors linking to their website from social media. They also managed to humanize the image of their bank by launching “Where’s Mark Wednesday” feature on Facebook. This feature made CEO Mark Wednesday a famous person and revealed him as an approachable guy with a good sense of humor.

Customer service improvement

If a customer is complaining about the service, it’s not a good sign. But there are banks that use negative commentaries in social networks for their success. If complainers get a quick answer from a specialist, their view about the bank is getting much better even if the reply doesn’t actually solve the problem. According to a report by NM Insight, 33% of respondents say they’d recommend a brand that offers a quick but ineffective response. And in case if angry customers get a personal contact from the bank’s CEO, they are fascinated and are likely to become the bank’s clients and recommend it to their friends.

How can banks utilize the full potential of social media?

A social network is a ready-made solution for recruiting, marketing and getting feedback from the bank clients. It already has all the necessary tools embedded for targeting, communication, advertising etc. It doesn’t matter what the purpose is — attracting new customers, searching for employees or building a bridge of communication with current clients. Appropriate instruments for meeting a plethora of business challenges can be easily found in SN. Social networks also provide free access to API for in-house solutions integration. Besides, they give an opportunity for creating applications that might be very helpful for business promotion, e.g. Facebook apps.

Nowadays there are companies that have real experience with custom software solutions and can assist banks in conquering social media platforms. It’s better to choose a vendor that knows what’s what in social networks and API though.

Do banks currently take advantage of social media?

American bankers association asked 800 banks about how they are managing social media programs. The research showed that overall, banks’ use of social media is still in its start-up phase. Only 24 % of respondents said their banks had been using social media for five years and more. 33% had been using social media for three to four years, 18% for one to two years and 12% had recently got acquainted with social media.

Unfortunately, more than one-quarter of respondents haven’t recognized the power of social networks yet and said that their banks had no plans to use social media for monitoring customer complaints, providing customer service or recruiting.

Conclusion

Despite the fact that social platforms are becoming expensive and prioritize family posts over advertising ones, banks are likely to continue investing in this kind of media. And it’s not a surprise, considering all the advantages that social media can provide: engaging community, finding new clients and personnel, improving service and bank’s image — all at minimal cost.

However, the significant number of financial institutions still consider social networks unnecessary for their marketing strategies and refuse to embrace the opportunities that SN can provide. Will the success of competitors utilizing SN make conservative banks change their minds? We’ll eventually find it out.