Five Trends for Social Media

Print
Email
Reprints
Comment (1)
Twitter
LinkedIn
Facebook
Google+

The top result of the web search seemed strange at first, almost like a mistake: Tim Lincecum's abnormally high earned run average in September. Since the search was for "Bank Twitter Usage in 2012," the result felt irrelevant.

But in reality, the high-priced yet struggling San Francisco Giants pitcher showing up in such a search is a perfect illustration of how web search techniques, social networking and bank branding are all changing rapidly, in a way that will force alterations in the strategy for all three functions. The Tim Lincecum factoid turned out to be a Bank of the West-sponsored "Tweet of the Day" from September 2012, posted by an ABC News affiliate in Sacramento. The Nascar-style branding of content from a third party partner is a sign of the times. Social networking has become so common and broad-based in its use - there are now more than 500 million Twitter users and more than 1 billion Facebook users - that banks have no choice but to incorporate social networking into their marketing efforts.

"There won't be any turning back on the growth on social media...not just for describing where you are or what your behavior is, but there will be a slow gravitation toward services delivered in the channel," says Michael Versace, global research director, IDC Financial Insights.

While social networking is growing in use, the capabilities of the networks are also changing, giving banks the opportunity to manage customers at a level of granularity not thought possible even a decade ago.

But there are also IT and business strategy challenges as the definition and use of social networks changes quickly. The FFIEC is setting rules around what banks can do in social media. And there's fierce competitive pressure, creating attrition risk.

Some banks outside the U.S. - like Commonwealth Bank of Australia, ASB Bank of New Zealand, and FNB Bank of South Africa - are already letting customers access banking services and digital commercce through their Facebook pages. Inside the U.S., large banks such as Citigroup have hired experts from outside banking to forge social media strategies, forcing other banks to follow suit.

"Social media will continue to force service industries like banking to find ways to engage with customers," Versace says. This month, Bank Technology News spoke with social media experts from the banking, technology and analyst community, who revealed five major trends that will change both social networking and how it can be used by banks.

 

THE COMMUNITY'S NOW A METROPOLIS

"Forum" is one of the oldest words associated with social networking, and it's still at the heart of how companies can use social networks to engage consumers - either by participating in Twitter and Facebook or by operating their own networks. What's changing is the use of sentiment analysis, content tracking and crowdsourcing techniques to turn a customer service and relationship building exercise into actionable science. Banks are still using social networks for customer service and as a way for consumers to discuss banking and other financial issues with each other, but the use of the content includes study of conversations and content shared on social networks to inform what goes into new products.

Harvey Sipel, who represents the social business practice at Cap Gemini, says the aggregation of the content of social network activity fits in well with crowdsourcing. "It can create ideas for innovation...a lot of people say social media is just Facebook and Twitter. But social is a new way for consumers, employees and even vendors to communicate, interact, and share. It's very similar to email when it first came out."

Barclaycard Ring, the card company's "community-built credit card," for example, includes an internally run online community in which cardholders can pitch new ideas. Among the recent ideas is a reward for cardholders who don't repeatedly call the company for service. The company has also posted information on how reduced customer phone calls to customer service helps it perform more efficiently.

The idea is to encourage fiscal health for both consumers and the card issuer. Barclaycard Ring makes stats available to consumers on how they are using their cards, and how that impacts the card's monthly performance. That performance is important to the card members, who benefit financially via rewards if the business unit that issues the cards performs well. Another carrot in the community is "badges." Similar to retweets and "likes" on Facebook, badges are earned for positive behavior, such as signing up for paperless statements. The user's online avatar in the community earns a ring for each badge. "The platform is scalable and allows us to reach out to folks to develop new products in new ways," says Jared Young, senior director of consumer markets at Barclaycard US.

Young says that by using social networking to bring people into the creative process, the institution is working to improve the way people feel about their financial institution. "U.S. consumer confidence in banks is at an all-time low...and by using the community, we're reaching out to them," Young says.

JOIN THE DISCUSSION

(1) Comment

SEE MORE IN

'The Law Penalizes the Consumers It Set Out to Protect': Comments of the Week

American Banker readers share their views on the most pressing banking topics of the week. As excerpted from the Comments sections of AmericanBanker.com articles.

(Image: Fotolia)

Comments (1)
Social media is also having a dramatic effect on the number of communication channels the finance industry needs to be active on. Customer service departments are being pushed into social care by their savvy customers who are already asking questions on a variety of social networks and expecting a response. The magnitude of conversations can seem overwhelming, but in reality, not all social conversations require a response. A key to efficiency is filtering and prioritizing relevant social conversations from inappropriate or extraneous chatter. We have tips on handling the magnitude of support conversations in our white paper on the metrics & ROI for social care: http://telusinternational.com/social_care_metrics
Posted by Jennifer Bach, TELUS International | Tuesday, February 05 2013 at 12:08PM ET
Add Your Comments:
Not Registered?
You must be registered to post a comment. Click here to register.
Already registered? Log in here
Please note you must now log in with your email address and password.

The FinTech 100

FIS and Tata once again top the annual FinTech 100 list of vendors, ranked by revenue; IBM and Hewlett-Packard lead the pack of tech companies serving multiple industries; and Bionym and Silver Tail are among the 10 Tech Companies to Watch.
DAILY ENEWSLETTER UPDATE

A Newsletter featuring Bank Technology News' top stories plus special reports and data

This feature displays payments industry news and analysis from American Banker sibling brand PaymentsSource. Registration is required; for more information contact customer service.

TWITTER
FACEBOOK
LINKEDIN
Already a subscriber? Log in here
Please note you must now log in with your email address and password.