Social Media

Top 5 reasons for traditional banks to be present on Social Networks

Written by Patrick NAVARRO

Today, social networks give many new opportunities to companies and traditionnal banks can not ignore them and have to adapt their strategies. So we are going to see the 5 main reasons why banks have to be present on social networks :

  1. Because social networks spending is increasingly important

As shown in the table on the righth1and side, the social network ad spending worlwide represents more than $35,98 billions and since 2013, the average annual growth is 37%. That means that companies are increasing their social media spend, and in 2017, it is going to represent 16% of digital ad spending.

As the market is evolving, banks have to adapt their strategy and invest in this new media too.

 

 

 

  1. Because there is strong competition

Indeed, this market is located on a very competitive market. According to Digimind[1] « 2014 has been marked as a start of a banking revolution ». This market is also very attractive : in 2014, it represented more than €109,3 billions in France[2]. By the attractiveness of the market and by the arriving of many innovations upsetting the sector’s habits, the competition is becoming more and more important with the rise of Fintechs, online banks and other new incoming. Today, taditional banks find themselves increasingly disintermediated by many competitors which are specialized in a particular service. Furthermore, the integration of social networks is part of 47.7%[3] of the reasons why a customer might join the services of a fintech. That’s why it is essential for traditionnal banks to be present on social networks. [4]

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  1. Because customer behaviour has changed :

Indeed, nowadays, customers use social networks during all the course purchase. According to Harris Interactive[5], 62% of respondents reported seeking information on a product or service on social networks before buying. They also use social networks during the act of purchase by sharing the product with friends or familiy. Finally, more than 42% assert that they want to have an assistance through social networks after the act of purchase.

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In banking, according to Capgemini[6], in 2016, 11% of customers worldwide use social networks to contact their bank. And more than 80% of consumers inform themselves about a financial product or service before subscribing. So, it is really important for traditonnal banks to be present on social neworks in order to adapt to the new customer behaviour and also to offer a new customer relationship…

 

  1. Because social is key in customer relationship management

Today, social networks have really shook the traditional customer relationship banking sector. Indeed, given that users are increasingly on networks social they become accustomed to communicating with their brands on social networks. The online sales sector have quickly been affected by this phenomenon and for some years the banking sector has had to adapt too. Consumers want to get in touch quickly and easily with their bank on social networks. This is the reason why we have seen many pages dedicated to the support and customer service. Some banks such as Société Générale undertake even to respond to their client in less than 30 minutes on Twitter.

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Today, we are increasingly speaking about SRM (Social Relationship Management) instead of CRM (Customer Realtionship Management). The SRM is a philosophy and a business strategy that is present in all stages of the customer relationship:

Indeed, it is positioned upstream listening to its customers on these networks, making the eve of what people think and say about the brand. There is also the notion of feedback which is essential. Indeed, today the customer has the opportunity to share his experience with the world on these networks, including giving advice, or other critical information to their brands. It is then the role of the Community Manager to provide feedback to the appropriate services in order to improve the customer experience. Inevitably, and as discussed previsously, it is the customer service function that is most represented in these networks. Typically, banks use special accounts or sites to respond directly to users’ comments and questions.

 

  1. Because social networks is an important communication tool

Banks have a lot of different customers and many different products and services. Social networks allow banks to communicate to a particular target. They can do hyper segmentation. So this is really usefull for them. Then, social networks allow them to be present in the everyday life of their clients by giving them some advices, information etc…

 

[1] Offre Média. « La publicité sur les réseaux sociaux dans le monde devrait plus que doubler en 3 ans pour atteindre 36 milliard de dollars en 2017 » (16 Avril 2015). [ONLINE]. http://www.offremedia.com/la-publicite-sur-les-reseaux-sociaux-dans-le-monde-devraitplus-que-doubler-en-3-ans-pour-atteindre-36-milliards-de-dollars-en-2017 (Page consulted 10.29.2016)

[1] Digimind, « Les Banques sur les réseaux sociaux : quel services pour quels enjeux », Etude Digitale, p1, 2016

[2] APRC, Banque de France, « Les chiffres du marché français de la banque et de l’assurance », 2014

[3] Capgemini, Efma, « World Retail Banking Report 2016», 2016

[4] http://www.lecourrierfinancier.fr/asset-management/opinion/fintech-banques-duo-gagnant-vers-nouveau-modele-financier-2112

[5] Harris interactive. “Social Life – Harris interactive edition 2016” (15 Mars 2016). [En ligne].http://fr.slideshare.net/HIFrance/prsentation-social-life-2016 (Page consulted 10.29.2016)

[6] apgemini, Efma, « World Retail Banking Report 2016», 2016

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Patrick NAVARRO

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