Social media continues to grow rapidly across a variety of industries, could the finance sector be next to jump on board?
In the past few years banks have recognised the need to change how they interact with consumers and have embraced a multi-channel approach by offering both mobile and online communication options. One method of communication financial services have increasingly understood as becoming more important is social media. Gabriel Hopkins, senior director product management at FICO, an analytics and decision-making services firm, agrees that banks are shifting how they engage with consumers and predicts a lot more organisations will start providing social media channels for customer service.
“Consumers are now looking to work with banks and other financial organisations that are able to support the channels that they want to communicate on,” he says. “I see a lot of organisations opening up the social media channel.”
Recent research by Virgin Media Business revealed that the speed of customer service among banks has risen as more turn to social media to address inquiries. The study found that nearly two thirds of UK high-street banks using Twitter are now responding to customer complaints and questions within an hour. The survey comes after it was reported that all of the UK’s leading banks now use Twitter as a way of communicating with customers.
NatWest was found to have the fastest Twitter response time for queries with an average of four minutes.
“Social media helpdesks are becoming common in industries where businesses interact daily with customers,” says Phil Stewart, director of customer services, Virgin Media Business. “They’re becoming like virtual stores. It’s really encouraging to see the banking industry taking a lead on this. “Social networking sites are a great way to engage with customers in realtime, but simply having a presence is not enough,” he adds. “Organisations need to make sure they’re interacting with individual customers and responding to queries within an appropriate time from when they first get in touch. Great customer service on any platform should be the rule, not the exception.”
The Virgin Media Business study comes after a Gartner report last year predicted that social media will shape the future of the banking industry.
Gartner said digital mega-firms will alter the way the industry develops by making consumers better informed along with eventually providing niche financial services themselves. The firm’s vice-president, David Furlonger, says banking institutions need to understand the importance of moving away from traditional models and adapt. “Traditional models no longer apply to many of their customers or markets. They [the banks] have a series of questions to address: do they simply copy the new opposition, do they try and exert influence over the broader market, do they look for help and partners, do they need to fundamentally restructure?” says Furlonger. “For many existing financial services institutions, mapping out the path to the future is proving extremely difficult and challenging.” Power to the people Social media has increasingly given consumers power when it comes to their financial needs.
“Through social people are getting wiser to the fact that the moment something happens now you have the power to crowd – whether that’s on Twitter or with friends on other social networks,” says Helen Clulow, head of product and design at digital banking provider, Intelligent Environments.
“People are also becoming aware that there are alternatives to conventional banks out there,” adds Clulow. “It’s interesting to see how the power is going to the customers rather than to the bank itself. I think we’re going to see this trend continuing.” Clulow says financial services looking to implement social media should start small and take incremental steps.
“It’s the same as mobile banking is now. People are gradually getting used to the fact they can actually make payments through it. I think the easiest way for banks to embed social media is to start with the basics and then increment quite rapidly forward. You will get traction with your customer base, provided you market to them.”
Stock market Research by information delivery platform Colt Technology has revealed that public sentiment on social media channels is believed to have often influenced the prices of individual stocks. The study interviewed more than 350 UK financial professionals and found that 60% believe that public opinion played a role.