As the banks contemplate social media

Earlier this month Sharlene Goff wrote in the Financial Times that Banks are searching out fresh ways to engage with customers on social networking sites.

It made me think about what is involved. The level of commitment for the successful companies is almost painful to see but it really works for these companies. The banks are a case in point but much of what they have to do applies to other sectors too.

Some banks are beginning to get there. Citibank, which has a retail arm in the US, is taking to Twitter to respond to those snarky comments made by customers unhappy with the service they have received with the help of the man, Frank Eliason, who was behind @Comcastcares.

Bump is a fascinating integration of the online and offline worlds. Originally just for sharing contact information, Bump can now be used to share photos, music, calendar events and more. You can even send money between Bump users, via the company’s PayPal integration.

The banks are not alone and face the same issues others are grappling with. The Boston Consulting Group (BCG) said that despite high levels of growth in social, mobile and online media, 55 per cent of marketing executives struggle to integrate such channels into the mix.

Research shows that not only are budgets for social media marketing rising, but an increasing number of brands are prioritising this spend over other media.

The imperative to get involved is very significant. The sheer growth in online ecommerce is huge. Adapting to online growth, some being new business and some being a switch from traditional consumerism of the high street to online interaction is dramatic and growing very fast.

It is very easy to underestimate the impact of the online space. Advertising predictions  of online take up is an example. The actual versus predicted growth was 100% awry in the last 12 months. Last year, the New Media Age study predicted a 9% expansion for search and a 6% rise for display. The actual growth in the NMA’s 2009 poll showed these increases stood at 17% and 10% respectively.

The pressures to compete for a place in ecommerce are significant and must, by now, be compelling for banks.

  • 44% of Britain’s online adult population upped their online spending this Christmas compared to 2009, pushing the total amount spent online to £2.8bn.
  • 45% of those who shopped online encountered website problems while doing their Christmas shopping, and 32% abandoned purchases as a result.
  • 86% of UK consumers logged onto the internet over Christmas Day and Boxing Day this year, an increase of over 10% when compared with figures from 2009.
  • 22% of online users accessed the internet on their phones, confirming the importance of mobile commerce for retailers.
  • 30% of online consumers used the internet to shop online on Boxing Day, while 62% of online consumers shopped for sale items and discounted products across the two days.

Indeed, there are pretty good predictions that not being involved will be difficult.

However, there is a long way to go and it goes to the heart of online relationships.

Part of the evolution will need to start internally. It makes a big difference.

Then, there is the big world outside.

“Communication between consumers is viral and immediate,” says Jill Puleri, worldwide retail industry leader for IBM Global Business Services. “They discuss your brands, products and services and boy, does everybody look at it. Some are good. Some are not so good. Millions of people around the world are reading them and being influenced by what they say.”

However, the need to move forward is compelling in the new world order.

Kevin Ertell, vice-president of retail strategy at ForeSee Results, is reported saying: “It looks like nearly two-thirds of all shoppers in the UK will soon be using their mobile phones for retail purposes, if they aren’t already.

“Any retailer not actively working to develop, measure, and refine its mobile experience is leaving money on the table for competitors.”

The cultural shift is going to be the biggest hurdle for banks.

With its current reputation in shreds, the banking industry has a big hill to clim to be trusted online. It is a sector that has to learn some hard lessons. Sometimes you make a mistake in the digital realm and you need to fix it. But once something is out on the Web and in social networks, you cannot erase it. Instead, you must apologize and move on.


In the open and transparent world of social media the whole culture of the social media is something that is going to be tough for the banks.


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