Time for Banks to Play on Social Providers’ Turf

A major component of customer acquisition, customer retention and overall sales growth is being where your customers are. Prior to the introduction of smart technology, that meant large branch networks that allowed customers to conduct their daily banking activities without a far trek from their office or home.

Banks are now in the process of making the same products and services available in web and mobile channels. But it shouldn’t end there. Banks should become comfortable operating away from their proprietary digital channels, to channels owned by third parties – most notably, social media providers.

If this tactic seems odd, re-read the opening line of this post and then navigate to the battery option within your smartphone’s settings, which includes a display of the top apps that have exhausted your phone’s battery. There, you are likely to find at least one or two of the most prominent social media apps, such as Facebook, Instagram, Snapchat or Twitter. I’d also be willing to bet that your bank’s app is not in that list.

Consumers spend significant amounts of time on social media apps, connecting with friends and sharing information. And fortunately, most large retail banks already have a longstanding presence on these social media apps. But rather than just being on these platforms and running the occasional promotion or contest, banks must truly use the channels as extensions of their own digital distribution networks. How exactly should this be done?

 

Facebook

Facebook has been the social media app most utilized by bank brands to-date, due to its decade-long existence and the ease of setup for business/organizational pages. This year, however, banks have become serious about leveraging Facebook’s Messenger app as a customer service channel, by virtue of chat bots.

Though Messenger cannot replace call centers and their representatives entirely, the app can help augment some of the more administrative customer service tasks while relieving customers of long waits over the phone. Banks should consider using both chat bots and live representatives through this channel, which can create efficiencies as live reps handle multiple inquiries at once.

Twitter

One Singaporean bank made news earlier this summer by allowing its customers to replace usernames with Twitter handles (as well as Facebook usernames). The end goal was to reduce friction in authenticating customers as well as to integrate certain transactional services – like P2P payments – with Twitter and Facebook.

Anything transactional in nature has a potential use case on Twitter, whose primary value is facilitating information share in real-time. Banks have experimented with linking twitter accounts to credit cards, which could mean real-time fraud alerts and more importantly, post-purchase insights for the consumer.

A bank can send a tweet to its customer immediately after a transaction is made that shows points earned on the purchase or deals at that specific merchant. Additionally, a post-purchase tweet allows the user to provide direct feedback to both the merchant and bank after a good or bad experience.

Snapchat

Snapchat offers its users one of the richest digital experiences available on a mobile app today, with the added benefit of geofilters and lenses that add context and creativity to snaps. In a nutshell, Snapchat allows brands to quickly and effectively communicate a message to customers. A number of banks have already engaged with customers in this fashion, such as Bank of America’s goat head lens this summer.

As banks enhance mobile apps to accommodate an increasing number of banking activities formerly performed in physical channels, they must consider the learning curve that some customers will encounter when trying to perform these tasks on an app for the first time. A short clip on how to execute a P2P payment (or recently-released feature XYZ) can be made available as a 10-second Snapchat story.

Other Social Media Apps

In addition to Facebook, Twitter and Snapchat, banks can offer their services on other prominent social media apps, like Instagram, LinkedIn, Foursquare, Pinterest. The potential for geolocation-enabled commerce on these apps is strong and can be productionalized with the help of banks, which serve as a gateway to the customer’s wallet.

 

The Rub

Banks should not underestimate the role that the growing social ecosystem could play in the industry’s distribution channels. The key for executives is to get creative with how their brands can be put in the faces of their customers and help them quickly accomplish a banking task that might otherwise seem painful or time-consuming.

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