Social Media and Banking

Although financial institutions have been relatively slow in adopting social media, there are some clear cut winners that show us possible pathways to adopt social media and benefit from it. One of the success stories that I like success is the Young & Free credit union of Alberta. It used social media to create a community of its target audience and gave them a platform to connect and discuss not only finances but other issues of interest as well. Result: Over 2000 new customers and over US$ 4M new deposits. Wells Fargo is another institution that has found success via blogging to market to young generation of students the various student loans it offers. Wells Fargo is also fully utilizing twitter to provide timely customer service. Social media was a big part of formulating a new and popular type of checking account at 1st Mariner Bank. The company’s marketing department used social media tools to take a look at their customer’s needs and used that to build new products and services. The bank was able to use social communications tools and online surveys to develop a financial life cycle for their customers and identify that many people today establish a long lasting relationship with a bank in their late teens. They also found that parents are a major influence in the decision of which bank people ultimately decide to use. At the time, they didn’t have an attractive account to market to both parents and 18-25 year olds. With more research using social tools, they identified which features and benefits were important and which combination would give them a competitive edge.

A while ago, I had an opportunity to talk about how social media can be used by banks to provide better customer service, increase the number of customers and deposits. The talk was meant for Indian banks but the issues and potential usage of social media are universal. I thought I will share the presentation with the readers of this blog. The presentation covers the growth of social media, how it can help banks with some success stories, the social media analytics, and social media adoption challenges.