Home / Uncategorized / Banks just starting to get social media

Banks just starting to get social media

I just received a copy of a new Aite Group report by good friend of all, Ron Shevlin, a guy with an 11-year old Volvo that has a tape deck in it, not even CD ready! (strange things you pick up on Twitter)

The report surveyed 166 financial services executives in the United States and Europe during August through October 2010, and was conducted by Aite in partnership with EFMA.

Key headlines include:

  • Four out of ten institutions believe they are intermediate or advanced users of social media, whilst six out of ten consider themselves to be either novices or beginners;
  • 30% of firms have no dedicated budget or specific funding for their social media initiatives, although 90% expect to have dedicated budget by 2012;
  • By 2012, 40% of financial firms expect to invest between 2% and 10% of their overall marketing budget on social media;
  • Engaging customers, building brand awareness, and building brand affinity top the list of business objectives driving the use of social media in financial firms;
  • Facebook is rated the most effective social media tool for marketing purposes, followed by customer review sites and blogs;
  • Over half of the firms surveyed have a Facebook presence today, with two‐thirds of planning to use the site;
  • Twitter is used at 44% of firms, followed by YouTube in use at 38% of FIs; and
  • Few firms rank themselves highly when asked to compare their performance against their peers along a range of social media performance measures.

The chart that intrigued me the most in this report, is this one:

AITE

This is because the reasons for using social media in a bank appears to vary widely between the European and American view, as can be seen.

In Europe, it is all about brand, customer engagement and talking through the crises, whilst the Americans is all about customer and brand.

This intrigued me for three reasons.

First, the wide differential between the US and European views, with Americans far more positive about social media usage than the European response rates.

Second, the fact that the European view outweighed the American view only once on the chart – managing crises – shows just how much Europe is in crises.

Third, that the focus of the questions appears to be that social media is all about brand and marketing; what about service? After years of social media development, surely it is time to just think about using these capabilities to talk to customers.

It’s more than customer engagement, it’s customer advice and service.

There is some of this in the report, but surely we have an issue when:

(a) the majority of banks ignore social media for even marketing;

(b) the few who get it, use social media purely for marketing; and

(c) nearly all banks miss a key opportunity to get a dialogue with customers for advice and support to build trust and loyalty, in these times when rebuilding trust is meant to be their #1 priority.

After all, social media’s time has come (doubleclick image to see larger version).

SocialMediaTL_05

Chart from the Big Picture.

Oh yes, and just in case you’re a bank thinking that this is all irrelevant, another white paper appeared yesterday from Fiserv.

During August, Fiserv surveyed 3,000 American consumers about their attitudes to social media and banking. The survey showed that 11% of online consumers are currently connected with their bank or credit union through a social site, and more than one-third (36%) of those not connected are interested in doing so. Interest is highest among Gen Y consumers, at 45%.

Here are the key headlines:

  • Financial Institutions Have a Significant Opportunity to Connect with Customers: 84% of online consumers actively participate in social media, but only 11% have connected with a financial institution
  • Consumers Lack Awareness: 71% of respondents who want to connect with their bank or credit union via social channels did not know they could
  • Consumers Don’t Understand the Value of Connecting with Financial Institutions: Consumers are not entirely clear about why they should connect with their bank or credit union via social channels
  • Consumers Have Privacy and Security Concerns: Consumers of all generations are concerned about mixing their social and financial lives

Some other key notes include:

  • 94% of Gen Y engage in social media
  • 90% of Gen X engage in social media
  • 78% of Boomers engage in social media
  • 65% of Seniors engage in social media

You can download a free copy of their report here, and a copy of our free report is also still available for those interested.

 

 

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

Check Also

Financial services of the future will be open sourced and real-time

I recently  presented in Miami and BBVA were kind enough to summarise what I said …

  • I am constantly amazed by how small businesses regard the usefulness of social media. I have been trying to get some of my business friends interested in using social media a bit more. The success (of them using it) varies but suffice to say, most of them still spend hundreds of pounds advertising in traditional ways. Like beating my head againsts a brick wall. I am nearing the completion of a book on the subject – I feel like showering my contacts with a free copy simply out of frustration!
    http://www.markclayson.co.uk

  • Frank

    SEB’s http://www.thebenche.com is one good example

  • Great stats and interesting observations. Banks engaging with customers……? That would never do!
    I really must go and get my cynicism seen to.

  • RE “Financial Institutions Have a Significant Opportunity to Connect with Customers: 84 percent of online consumers actively participate in social media, but only 11 percent have connected with a financial institution”
    I wrestle with this and whether we are even asking the right question.
    I was singing the song that banks must engage in social media beyond merely following comments on their institution. I saw the results of customer engagement during crises such as storms in Washington State and Credit Unions keeping customers up to date with branch closures and there was a broad consensus that a shift was occurring where social media would almost become a new and better CRM.
    Fast forward from those halycon days and where are we reality today. There is still little evidence that customers want to personally engage with banks through social media in a meaningful way that supports loyalty.
    The flip side of that argument is that banks now use social media as a marketing medium to sell stuff.
    Social media by definition and practice is personal and non commercial. I say we are further form the answer today than we were in 2005.