Businesses today cannot survive without social media as it has grown in functionality and reach over the past decade. Social media is a tool that helps enterprises work in well-connected environments. Facebook, Twitter, Instagram and other social platforms have changed the way banks and other companies maintain relationships with their customers, as well as how they provide first-class customer service. Futuristic companies are learning to leverage the power of social media more often to engage with customers by adding social media pages as bonafide communication channels.
According to one report by Accenture and The Partnership Fund, global investment in fintech companies has tripled from $1 billion in 2008 to nearly $3 billion in 2013. Most of these companies are using social media more than the traditional business models. Responding quickly and in real time on Facebook or Twitter to solve a customer’s problem can actually build trust, foster loyalty, and boost the company’s reputation.
The impact of social media is vast and can be seen in five important business areas:
It is imperative to include social media as part of a company’s marketing strategy. Companies can implement a data-driven approach with a test-and-learn mindset that helps to prepare the company for a dynamic social environment. Marketing on social media is much more than sending out a tweet about a product; it involves listening to customers and presenting the company’s products or services in a way that will meet the customer’s needs.
- Customer service
Most customers expect a fast turnaround from service providers. If they end up loving the product or service but hate that it didn’t come in a reasonable time or in the time that was promised, some will vent their frustrations on social media. Companies must implement social media channels so they can track such feedback and take steps to resolve problems.
- Development of new products/services
Social media isn’t limited to delivering new products or services, but also can be used to design and develop them. DenizBank in Turkey changed the way they provide banking by allowing customers to access their accounts through Facebook. It also allows them to conduct wire transfers and manage daily expenses while surfing their newsfeeds.
- Cost reduction and efficiency enhancement
Banks have started to use social media channels like Facebook as an efficient means of processing job applications. In October 2013, ICICI Bank—a multinational bank in India—launched a mobile app called Pockets, which grants users access to their online banking accounts with Facebook credentials. The app allows users to perform simple tasks like refilling a prepaid phone card, paying utility bills, and buying movie tickets.
- Create new business models
Social media platforms in China have taken the initiative to create new business models for banking and financial services. For example, an individual can pay rent using Alipay, the bank using WeChat’s WeBank functionality, and purchase mutual funds from Baidu.
Lenders are using social media platforms to provide credit scores to applicants, and banks are leveraging this to generate more customers through references. Traditional banks have implemented social media devices in a confined and limited environment, but there is room for banks to innovate. Social media isn’t just for customer service; it can also be used for new product or service releases. Maybe one day soon, all core banking functions as we know it—deposits, payments, remittance, and investments—are handled through social networks.