INDUSTRY: FINANCIAL SERVICES
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Wendy Arnott of TD Bank Group asks the question “Is there such a thing as a social bank, can we have a social business?” What about social banking? Whether you answer this question with a resounding “yes” or an emphatic “no”, there’s no denying the widespread use of social media. This is particularly true within the Financial Services industry, where both employees and customers are demanding social media strategies to support their needs. The core issue behind the banking sector is RISK, where the actions of both customer and employee can pose reputational issues. Banking of course is highly regulated and as such need to take the time and effort to clearly define the use of social media. There are the early adopters who want to embed social media into every sector of the organization. On the other hand, there are those that take a more measured response with a “wait and see” or “let’s fine tune it after we see what others have learned”, type of approach. Both responses may be accurate based on the psychology of their business culture.
Bankers across the world need to address some fundamental questions that require insightful response.
In the April 2012 publication THE SOCIAL BANKER: Social Media Lessons from Banking Insiders, KPMG purports that bank executives around the world need to review and determine the following:
- How will I get my board to support a social media strategy?
- How will I mitigate the risks of engaging with customers on an uncontrolled forum?
- How will regulation influence my social media strategy?
- What will the impact of social media be on my existing technology environment?
- What culture changes will need to take place to prepare our organization for social media?
- How can social media enhance our existing customer relationships and drive competitive advantage for the future?
- Will customers really want to be friends with their bankers?
The one thing we know about business is that change is inevitable and best adopted early. Bankers are considering other definitions of currency. Fransisco Uria of KMPG – SPAIN is quoted on page 17 of the report as saying; “DATA is rapidly becoming the new currency of business, which may offer banks a new form of revenue by selling their data collection to partners and outside industries”
In the YOUTUBE video THE FUTURE OF BANKING, AVANADE UK details what they believe the future of banking may look like. They state that by 2017 every consumer will be using mobile banking. Consider the following services as early applications:
- Talk Transfer – voice authenticated funds transfer
- Intelligent Personal Budgeting (IPB) with predictive personal financial advice based on their analysis of your buying patterns
- Frictionless Banking using “near-field communications technology” with a preloaded account based on tailored services. All obtained by cell phone docking at a frictionless station
- Self-Pay – simple purchases through the scanning of a QR code, funds are debited from account. Self-service payment in the palm of your hand.
- Augmented Reality Customer Service – on demand mobile manager with direct access to your own personal financial manager.
“Too far-fetched”, you say, in some cases it’s already here. The Royal Bank of Canada has already facilitated peer to peer payment via Facebook. World Retail Banking Report: RBC – P2P Payment via Facebook (2:48).
The next time you walk into your local bank, stop for a moment and ask the teller “how is social media changing the way in which the bank approaches me, how is social media changing your job, what new social media innovations can I look forward to from this local bank? You’ll be surprised when you do.
- Social media is coming to a bank near you
- Social media used within the banking sector will have federal regulators overseeing it
- Social media is at the very forefront of banking products and services development
- Social media for bankers is about advancing market share, client satisfaction, revenue generation (profits for shareholders) and employee support
SUBMITTED BY: Jaye Torley
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