SOCIAL media has disrupted the way people interact and even the way business is being done now and in future. We may argue over the pros and cons, but the fact remains that social media is here to stay.
Positive disruptors talk
Social media platforms have gradually found their way into various aspects of life, replacing traditional media as they gain increasing popularity among users. Social media is no longer just a place where businesses can communicate with customers, it also offers an avenue for these businesses to create stable and profitable relationships with customers by making various transactions possible.
The banking industry is aware of the power of social media. It gives the customers a voice and enables the banks to connect and reach out to far more customers than traditional channels but, currently, most banking activities on social media are limited to marketing products, engaging customers and providing support. Very few banks are keen on taking things a step further by offering transactional banking services on these platforms.
The future of banking is digital and social media will play an important role in shaping the banks of the future. While banks and customers might not be open to the idea yet due to concerns about data privacy and security risks, transactional banking on social media is already being put into practice by some banks like Steward Bank, the largest bank by customer base, allowing its customers to transact online, and open new accounts using WhatsApp. There are many benefits to both banks and its customers of going the social media way besides convenience.
Improved Know Your Customer (KYC)
Banking on social media will open up new possibilities in terms of personalising the customer experience. The bank will have greater insight into their customers’ persona, spending patterns, preferences and important life events. This will enable them to develop products and service offerings that are more likely to meet customer needs and add real value to their lives. For example:
If a customer gets married and shares this information on WhatsApp and other platforms, the banks can access this information and offer products that would be of interest to that customer, for instance, a house mortgage, family car financing, maternity savings and so on.
More coverage and customer base
Already, social media has allowed banks to reach a wider audience through social media marketing and advertising. Deepening the presence will allow banks offer financial services to customers anywhere in the world, eliminating geographical constraints. Imagine being able to transfer money from your bank account to any wallet in a secure and convenient manner and being able to make payments on websites, as well as receive funds from other sources using social media. That is indeed a game changer.
Younger customers (18-30 years old) do not look forward to going to a branch to speak to a rep about their finances or discuss investment options, they prefer being able to manage their money from any location.
This means their banks must be present at every communication touchpoint, be it telephone, social media, web or mobile apps.This generation of customers will get attracted to the convenience of carrying out banking activities via their social media accounts. Banks will be able to leverage on this by cross-selling products which will be relevant to a younger customer base, thereby deepening their relationship with the banks.
Improved customer support
Social media is already being used for customer support by most banks, but a deeper partnership with social media platforms will empower the banks to offer better support services. This will help in building stronger relationships with customers further improve response time.
Banking on social media
Customer data on the social platforms can be used for activities like user authentication and credit scoring, which empowers banks to provide better support to customers. The fact that some banks are already using social media credentials to verify identity reveals how much can be achieved in banking on social media.
Indeed there are many opportunities for banks as a result of social media. Banks should increase their presence on these platforms for greater customer experience.
Mhotseka is a business writer at Equity Axis