Social networking has become so common and broad based in its use that there are now more than 500 million Twitter users and more than 1 billion Facebook users with banks have no choice but to incorporate social networking into their marketing efforts. There won't be any turning back on the growth on social media and there will be a slow gravitation toward services delivered in the channel. Social media will continue to force service industries like banking to find ways to engage with customers.
Build a community and glean product ideas from it. Many banks, engage with customers via Twitter and Facebook. Sentiment analysis, content tracking and crowd sourcing can turn these interactions into actionable science. This can create ideas for innovation. A lot of people say social media is just Facebook and Twitter. But social media is a new way for consumers, employees and even vendors to communicate, interact, and share.
Kotak Mahindra Bank’s JIFI service, for example, is a non-interest bearing account, which does not have any minimum balance requirements, and pays high interest on balances over Rs. 25000 by automatically creating term deposits with your spare cash. Among the recent ideas the customers can know or request their account balance, transaction history, cheque book request and many more activities through Twitter.
Kotak JIFI customers also benefit via by referring their friends, colleagues or family members. Another carrot in the community is Loyalty Cards. Just by comments and likes on Facebook, points are earned for positive behaviour, such as paying bills online. The platform is scalable and allows reaching out to folks to develop new products in new ways.
Mobile apps allow you to manage your accounts, pay your bills, transfer money as also get updates of latest discounts and much more.
By using social networking to bring people into the creative process, the institution is working to improve the way people feel about their financial institution. In India consumer confidence in banking services is at an all-time low and by using the social media, it can change the situation for new generation users.
The banks can also monitor customers' posts to learn about product needs and preferences. Changes in traditional web search analysis are making social networking sites an increasingly important way in which the bank gathers life stage and other personalized information about its customers.
With Facebook, for example, the bank will be able to see demographics and interests of favourite shows, movies, relationship status, alumni associations etc. Basically, anything that a person adds to their profile is information that advertisers can use to target. They would be able to see where the users followers are in their lives. Are they just graduating? Are they newly engaged and saving for a wedding?"
The bank can use that information to make its content more relevant to current and potential customers (folks who "like" the bank on Facebook but aren't customers yet). Customers are using social networks much more now than they used to. When people use social networking sites, they reveal information about themselves what they like, what they dislike, their hopes and aspirations that can be used for marketing.
Much like observing behaviour during an in-person visit to a bank branch, social networking offers an opportunity to spot behaviour that can inform a broad picture of credit risk. While it's rare for people to discuss why they need a loan or how they're having a tough time paying bills, there are still tendencies that can be gleaned by viewing other activities on social networking sites.
Social networking aids traditional underwriting, rather than replacing it, says the use of social media in credit decision making is reliant on an analysis of how people are using social networks. Not many people talk about paying bills online, but they do tweet about a car breaking down. That can be an opportunity to reach out to a customer for a loan, or to be aware that they may have a need.
One simple creditworthiness check is finding out if a borrower actually has a social media footprint. Facebook and Twitter have become so ubiquitous that it can set off a red flag if a person doesn't have an account. It's better to have an online ID. Not having one is like walking into a brick and mortar store without a driver's license.
Banks are looking ways to increase use of social networking, by allowing customers to connect with each other via social networking sites used by the banks and is a great idea especially for younger users, and is a different way to increase the reach and get to customers.