social media in banking
DESCRIPTION
Presentation to a workshop organized by Institute for Development and Research in Banking Technology, Hyderabad, India (May 2012)TRANSCRIPT
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Social Media: Opportunities and Challenges for Banking
Ishwar K Sethi
Oakland University, and Integrated Knowledge Solutions
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Outline
• Introduction
• How Can Social Media Help Banks?
• Social Media Analytics
• Social Media Adoption Challenges
• Summary
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INTRODUCTION
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What is Social Media?
“media for social interaction, using highly accessible and scalable communication techniques. Social media is the use of web-based and mobile technologies to turn communication into interactive dialogue.” Wikipedia
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Social Media is About Conversations
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What Makes Social Media Attractive?
Traditional media is one to many while social media is many to many
Instant low cost communication
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What Makes Social Media Attractive?
• No distinction between media producers & consumers
• User generated content • Free borrowing and sharing of content • Rich user interaction
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Social Media Characteristics
• Great variation in quality • Immediate consumption • Long tail characteristic
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Why Social Media?
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Why Social Media?
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Why Social Media?
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SOCIAL MEDIA & BANKS
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How Can Social Media Help Banks?
• Monitor their brand identity
• Test new products and get feedback
• Develop conversations and build trust
• Find good quality employees
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Social Media Usage Examples: Virtual Branch on Facebook
Auckland Savings Bank offers a virtual branch on facebook. With just one click you can start chatting with one of the bank’s agent.
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Young & Free credit union of Alberta created a community of its target audience and gave them a platform to connect and discuss not only finances but other issues of interest as well. Result: Over 2000 new customers and over US$ 4M new deposits
Social Media Usage Examples: Community Building
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Social Media Usage Examples: Marketing via Blogging
blog.wellsfargo.com/ StudentLoanDown
Wells Fargo has six other blogs or microblogs. These are working well to build their customer base and brand loyalty.
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Social Media Usage Examples: Customer Service via Twitter
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Social Media Usage Examples
• Product Research: 1st Mariner Bank (in Maryland) created a new type of checking account using customer feedback through social networking
• New social services:
– Peer to Peer Lending
– Personal Finance Management
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Social Media Use at Indian Banks
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Social Media Use at Indian Banks
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SOCIAL MEDIA ANALYTICS
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Social Media Analytics
• The goal of social media analytics is to provide meaningful insights to an enterprise from social media conversations. It involves for example, measuring and tracking customer sentiments, identifying “influential authors” etc. to gauge ROI.
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Analytics Example
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Analyzing Tweets
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Analyzing Tweets
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Sentiment Analysis
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Sentiment Analysis
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Sentiment Analysis: Another Example
Week 1
Estimated Approval Gallup Approval Estimated Disapproval Gallup Disapproval
43.10% 43% 43.50% 48%
Week 2
Estimated Approval Gallup Approval Estimated Disapproval Gallup Disapproval
45.3 43% 43.2 49%
Results of a class project on using Twitter to estimate President Obama’s approval 34
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http://monitor.wildfireapp.com/
Tracking Likes on Facebook
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http://tweet.grader.com/
Locating Influencers
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A Framework for Social Media Measurements
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Aligning Social Media Measurements with Business Goal
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SOCIAL MEDIA ADOPTION CHALLENGES
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Social Media Adoption Challenges
• Factors inhibiting effective social media adoption
– Strategic
• Many banks view social media as another channel for corporate communication and not as a collaborative medium. Thus limiting social media’s effectiveness
– Financial
• Not enough funds
• Not convinced about ROI
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Social Media Adoption Challenges
• Factors inhibiting effective social media adoption
– Regulatory
• Many of the regulatory, compliance and legal issues are new, causing banks to move slow
– Organizational
• Effective social media use transcends traditional organizational boundaries calling for organizational changes that are difficult to implement
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Social Media Adoption Challenges
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Social Media Adoption Challenges
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Approach to Social Media Adoption
• Must be customer centric – Understanding how customers use social media and their preferences is crucial
• Clear goals and metrics – Social media initiatives’ objectives must align with the bank’s business objectives
• Strategy – Must be guided by an enterprise vision and must encompass objectives, market analysis,
governance, performance metrics etc.
• Technology – Social media platforms must be integrated with bank’s analytics, CRM, marketing, and
security applications
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SUMMARY
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Take Home Message
• Social media growth is unstoppable; the platforms might change
• Banks can ignore social media only at their own peril
• Employing social media with well defined business objectives has shown to yield success
• Although social media deployment can be outsourced, initial implementation should be in-house to better understand social media’s usage and organizational issues that might crop up
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