Banking And The Social Media Revolution

Social media are on your laptop, your smart phone and your tablet, they’re at home, at work and on the road, they’re used by private individuals, major corporations and ambitious start-ups. In short: They’re everywhere. One vertical, meanwhile, which has remained somewhat hesitant to embrace the social media revolution is banking. Not only were banks slow to start posting on Facebook, tweeting on twitter and setting up circles on google plus. They were also sceptical about offering products and services directly connected to the social media market. As this is now slowly starting to change, it is about time to have a look at what this means for banking in general and you in particular.

Banks are waking up to social media

One thing’s for sure: Banks are quickly trying to catch up with the rest of the world and regaining lost ground with regards to social media. Today, all but a few banks have accounts at all major social media platforms and are developing related products and applications. Making the transition hasn’t been easy, as some of them are finding it hard to develop the kind of direct and personal interaction that the entertainment industry excels in – while others are facing tough opposition by critics. Deutsche Bank, for example, is under constant attack on Facebook for its alleged involvement in rainforest logging.

But as banks are gaining experience in the field, they are slowly but surely learning to deal with these attacks and developping strategies to put social media to their advantage.

Social media banking: Start-up problems

That said, there are still plenty of reasons to be sceptical about social media banking. First of all, the terms is already highly problematic in itself:

Social media is all about publicity, while banking is all about privacy. Social media is about collectivity, while banking is restricted to individuals. Social media is about a lean-back approach to communication, while banking is and should be formal and serious.

Needless to say, too, the concept of social media is to remain logged in all the time and everywhere, while your banking activity should ideally remain restricted to a safe location, where you can be sure that no one is secretly spying on you. By conflating these fundamentally contrary tendencies, social media banking is creating various problems and contradictions, which still need to be sorted out.

But social media can be useful, too!

As much as there are still problems, social media banking also holds some great promises and potentials. For one, if banks are truly starting to use social media as platforms for one to one customer communication, then this may make them more customer-oriented in the long run and banking more human. Also, social media banking apps are not wrong per se. Since social media have created environments which are strikingly more easy to use than the average online banking interface, they may make the process of setting up standing orders, transferring money or simply checking your account status more convenient and intuitive.

One should also not forget that a site like Twitter has made it a lot easier to find banking information from all around the world and therefore improve customer expertise on fundamental banking topics. This way, consumers can engage in a much deeper and equal dialogue with banks.

How to take the first social media banking steps

With all of the above in mind, how can you take the first steps into the world of social media banking? One thing you should definitely do is take advantage of Twitter’s news facilities by creating an account specifically for banking and start following banks and financial news providers to stay in touch with the latest developments. Avoid jumping on Facebook apps for social media banking until they have proven their efficiency and security. Instead, get yourself a guaranteed account for online banking, which will allow you to take care of your finances quickly, safely, 24/7 and from wherever you are.

As social media banking is becoming more popular, new and exciting services are sure to follow. The exact effects are impossible to predict, but one thing’s for sure: Banking will never be the same again and that need not be a bad thing.

 

This article was written by William Masters in association with eccount money, a leading service provider for online banking and bad credit bank accounts. William Masters is a finance editor based in London, England.

Image Credit: Freedigitalphotos

2 Responses

  1. Arjun says:

    William, great post there, mate. Identifying these elements and articulating them is a tough job and you have aced that. With the same intent in mind, we at Windchimes Communications are conducting a workshop to enable BFSI sector individuals to realise the power of social media and how they could custom use it for maximum impact. Do drop by at the link mentioned below and share your views on the same.

    http://windchimes.co.in/blog/2012/07/when-money-matters-grow-social/

  2. Hi William, loved to read your blog. We, the Team of FIDOR Bank fully agree to the summarizing statement of your blog: “Banking will never be the same again and that need not be a bad thing.”

    When we founded FIDOR Bank, social media and web 2.0 was a common thing withing almost all industries working in the internet. Not to banks! So we thought, that combining social media DNA and banking could create a new service. Little later, we tunred out to be in the beginnung of the credit crunch crisis. We watched traditional banks acting and reacting in such a scenario and we thought: Now it is a must to create new banking. The result is munich based FIDOR Bank. We want to integrate the users in our development and we interact strongly via all kind of social media. Further more, we combine the DNA of web 2.0 with the DNA of banking products. In our accounts, peer-to-peer lending is as much integrated as crowd funding, or peer to peer options via stockbattle. And we leave it up to the users, how high the interestrate on that account is, cause this is driven by the amount of Likes we recieve on our facebook profile. This we call “LIKE Zins” (which means Like-Interestrate). I could go on for hours. To you it is more efficient to have a look maybe to http://www.bai.org/BANKINGSTRATEGIES/distribution-channels/online-banking/-fidor-bank-most-innovative-bank-concept or the latest article of UK´s Chris Skinner: http://thefinanser.co.uk/fsclub/2012/06/fidor-bank-from-one-extreme-to-another.html

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