Social Media which is based on open communication is a necessary tool in the banking and financial services sector to build and maintain relationship with individuals and groups. Through social media, not only are they able to understand specific needs of the customers, they are also able to create products and services meeting the exact needs of the customers, ensuring customer satisfaction and establish long term relationship, enhance their brand equity, mitigate risks and create competitive advantage in a competitive market.
Banking and financial services firms have leveraged social media to open new communication channel enabling them to share information as well as engage with customers and prospects. Strategic and tactical use of social media has also helped them become transparent and predictable thus building trust with the customers.
Retail banking has embraced social media wholeheartedly however; Institutional banking has shown a more cautious approach primarily to do with the nature of business and customer preferences. Institutional bankers perceive that social media is not yet the route to reach to customers.
From a high level (without distinguishing retail and institutional banking and financial services) let us see how social media in banking and financial services is evolving.
Use of social media
Sales: Sales team use social media to identify qualify and connect with prospective customers. LinkedIn is the most widely used by sales and business development teams for this purpose. LinkedIn is highly useful in private banking and wealth management. Similarly Asset Managers, Investment bankers, Hedge funds, Commercial Banks, PE & VC and Brokerages also leverage LinkedIn as a prospecting and communication tool.
Customer Service:Proactive customer service using twitter can provide huge value to bankers. Twitter and Facebook is useful to listen to customers and address their problems. This ensures other customers who might have similar complaints are also able to hear you and resolve their complaints. Understanding customer behavior and preferences is also easier through social media. To maximize the benefit of customer service through social media, it is advisable to create customer communities and converse through the same.
For instance, Bank of America’s twitter channel @BofA Help is dedicated to answer customer questions. The tag line “We are official Bank of America Twitter reps, here to help, listen & learn from our customers” and with over 160 K tweets indicates how BofA uses twitter to listen, help and engage with its customers.
Marketing and Promotion:Banks and financial service company have got enormous benefits by using social media in marketing and promoting their products / services and get the word out. Tying social media to marketing communications and campaigns and brand building also yields great results. Other social media tools such as YouTube and blogs etc. are also extremely useful platform to connect, engage and retain customers. For instance, Citi is currently celebrating its 9th year on Facebook.
Communication:To become transparent and build trust, banks and financial servicecompanies areincreasingly turning to social media. Many use blogs to share important company updates, manage critical communications during crises, reputation management and bad press. Similarly, twitter, Facebook is also used to communicate with customers and communities. BNP Paribas and Société Générale corporate website is exemplary the way twitter feeds and YouTube videos are showcased.
HR, Internal Communication and Employee Relations: In this age of open communication, it will be unsafe to ignore the importance of social media for internal needs of the company. Social media is important for HR and communication needs. Social media tools are used profusely for communications related to recruitment, training etc.
Jobs are posted on social media sites such as LinkedIn and Facebook, all queries related to recruitment process are also answered through social media to the benefit of the entire prospective employee community.
Corporate Social Responsibility (CSR): Global banks use social media to share their CSR initiatives with the community and stakeholders. CSR initiatives help a great deal in employee and customer engagement, long term thinking and sustainability of the company and of course brand building.
BNP Paribas for instance runs a dedicated blog called Committed for a changing world for employees, partners and others to contribute. This blog is about culture, diversity, education, environment, health and many other goodwill actions that BNP Paribas supports. This blog contains articles, reports, pictures and videos which are quite engaging; further this blog is well connected through various social media platforms such as Twitter, YouTube and Flickr thus making it available to an even larger socially conneted audience.
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