The Bankwatch

Tracking the consumer evolution of financial services

Posts Tagged ‘Social Media

“Gartner Says Banks Need to Be Ready to Take Advantage of the New Age of Social Banking” | Gartner

Interesting new report noted by Gartner.  I haven’t seen the report (hint hint) but the press release is appealing and fits with the general theme bankers need to get beyond their current problems, and look up for new directions and strategies.

Gartner make the point that fundamental shifts are occurring online, and while not specific to banking, except in pockets, the directions at play are too fundamental to ignore as being permanent.  Sounds like an interesting report.

Gartner Says Banks Need to Be Ready to Take Advantage of the New Age of Social Banking | Gartner

“Currently many traditional bankers tend to reject the concept of social banking as a fad while others refuse to recognize or accept any degree of threat posed by such new phenomena,” said Alistair Newton, research vice president at Gartner. “Although bankers may see current low usage by consumers as a permanent source of safety, this disregard for changing consumer behavior with social networking generally may mean that they miss the possibility of fast, viral uptake of social banking.”

Consumer interest in social networks and social banking does not mean that consumers expect or want their banks to be social networks like Facebook or MySpace. In a January 2009 survey of 3,988 consumers who use online banking (1,970 in the U.S. and 2,018 in the U.K.), the results showed only a small percentage of respondents (7 percent in the U.S. and 8 percent in the U.K.) said that they were interested in using an online social network on their bank’s Web site to talk to other customers. Out of this small percentage, most were interested in using social-network information about how their banks compare with others and to find information to simplify their financial and personal lives. Although these consumers are few currently, they provide clues about the desires for social banking and are likely to be the first adopters and therefore online trailblazers for social banking.

“What has become clear from the growth of social networking as a phenomenon has been both its speed of growth and the viral impact of such communities,” said Ms. Cohen. “Ideas are picked up, established and disseminated within short time scales, much too short to allow late entrants to the market to take advantage of the opportunities that will arise. Banks need to be positioned to take advantage of this shift to a new age of social banking.”

Written by Colin Henderson

May 6, 2009 at 22:32

Will Banks do social media?

One of the nice things about blogging is that you get to pick on friends as an example, so here goes with James. This is the comment I left on his post which rightly questions the validity of social media for banks as a marketing tactic.

I wanted to make some additional comments, and they follow, and I REALLY look forward to Ron’s views.

Why Banks won’t do social media | Bankervision

James – couldn’t disagree more – message here from the echo chamber.

This is social media.

Here is why banks (that survive) will do social media. I picked Lloyds Bank at random, and this link is a google search for this string “I love lloyds bank”

Social media is not banner ads in FaceBook. That closed walled garden is all to often picked as the definition of social media but not so. Social media is probably the wrong word anyway – at issue is being where your customers are and having conversations with them.

How do we pick branch locations? We pick them because there are office buildings, residential density, new growth areas etc. Branch managers join the chamber of commerce, and other local associations to meet people and chat with them. This is classic banking 101 and build confidence and trust.

Social media is understanding this new location called internet that is not just essential, but fundamental to Gen X/Y as well as a few older fogies.

Back to the Google search. This simple example exemplifies the conversations about Lloyds Bank whether the employees choose to participate or not.

Relevance to Bankwatch:

I think the real point here is that peoples behaviors are shifting. That shift is not the shift from using one media to another. This is not (imho) on the same linear shift as from radio to TV to ….. Instead internet brings a new dimension and with it enormous social (small s) change and accompanying new behaviors. The addition of mobile applications beyond texting will only enhance and supplement this shift.

One outcome is a desire for greater personalisation in the sense of talking to and hearing from real people. Again web 2.0 tools supplement that. Cluetrain said in 1999 that “markets are conversations”.

– join the conversation

– join the conversation online

To me, social media means understanding consumer behaviour and adapting to that behaviour.

This implies a shift in focus for banks, away from traditional marketing, and towards conversations.

Written by Colin Henderson

November 30, 2008 at 19:25

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