Published on November 17, 2014
Written by The Servion Group
Technology has made it easier than ever for financial institutions to reach out to people. In a world where smartphones are the norm, everything from marketing to loan applications has been impacted.
However, expectations rise along with tech-savviness, and organizations that don't focus on the segment of the population that most utilizes digital technology run the risk of missing out on valuable business.
This was one trend explored by Accenture in its "Banking 2016: Accelerating growth and optimizing costs in distribution and marketing" report.
"The ['Social Engaging Bank'] model emphasizes engaging customers where they spend their time, with a specific focus on social media to increase customer intimacy," the report stated. "The intention is to create relationships based on personal interests, leverage influencers and facilitate co-creation (the bank and its customers)."
According to Accenture, there are three primary components to a "Socially Engaging Bank" model.
The first involves monitoring social media to identify different opportunities for engaging consumers, as well as to more quickly react to potential problems. The second is utilizing social media as a marketing tool that allows you to better appeal to individuals based on their interests and attributes. The third component is building on standard customer data with social media data, hopefully creating richer profiles of borrowers, investors and other types of consumers.
"Most banks today cluster customers through traditional drivers (such as average revenue, cross-selling rate) and engage them on a 'push' basis," the report continued. "In a 'Socially Engaging Bank,' interactions are much more personalized. The bank has tailored interactions with customers based on their interests and intentions communicated via their actions on social media (for instance, by 'liking' or sharing something)."
"Incorporating social media engagement into everyday operations is a natural fit for credit unions and community banks."
The hope is this type of model will better allow financial institutions to be viewed as partners in a consumer's life, playing a more active, relevant role, as opposed to representing a detached, isolated entity that only engages individuals during the final phase of banking business.
Credit unions and community banks already differentiate themselves from the competition by providing consumers with more personalized service, so incorporating social media engagement into everyday operations is a natural fit.
Data illustrates social's reach
While the Internet-age provides us with plenty of fads that come and go with lightning speed, the rise of social media is one trend experts agree is here to stay.
"There won't be any turning back on the growth on social media and there will be a slow gravitation toward services delivered in the channel," Michael Versace, global research director at IDC Financial Insights, told American Banker. "Social media will continue to force service industries like banking to find ways to engage with customers."
One look at the latest statistics regarding social media use support Versace's statement.
According to the Pew Research Center, as of January 2014, 74 percent of online adults used social networking sites. Credit unions and community banks that are not engaging this segment are doing both themselves and consumers a disservice.
Of course, determining the best way to engage without irritating or alienating consumers can be easier said than done.