‘Banks’ Social Spend is Going to Increase 10x in the Next Five Years’
“Banks’ social spend is going to increase 10x in the next five years,” says Ragy Thomas, CEO of social management tool Sprinklr.
Ragy’s personal interests aside — he does, after all, sell a social media management tool — this should be a wake up call for bankers to look hard at how their customers are using social media and see if their bank’s social media efforts are sufficient. (The average spend of banks now is “miniscule,” and has “plateaued,” according to The Global Retail Banking Digital Marketing Report 2013.)
As much as 25% of the time spent on mobile devices is spent on Facebook, and as Facebook’s director of product management for platform monetization Deboarah Liu said to banks at Money2020, “Your customers are here — engage them here.”
That can be easier said than done. The “creep factor” of following a customer on social media can make some bankers queasy, and then there is the question of refining a bank’s message to the world to a single Facebook post or 140-character tweet.
Thomas spoke to this challenge, telling Bank Innovation, “Social media is both a channel and a disrupter for banks and other large corporations.”
As a channel, social media operates as a communication conduit that has the potential to strengthen the relationship between banks and customers in ways hearkening back to the glory days of relationship banking, when the local banker knew his customers by sight. “Social helps brands to be human,” Thomas said. “It helps large companies build human relationships at scale.”
But social media is also disrupting the way banks interact with customers. Data flows both ways in the social conversation, and this can work to the bank’s benefit or harm. “Social brings tremendous complexity for banks,” Thomas said. “I would say to companies considering entering social, it is going to make your world 500% more complex. Social is disrupting the way you functioned over the last 20 years. Customers are connected at an unprecedented scale, so they have more information about you and your products than maybe you do.” More specifically, customers may have more information than the agent speaking with them.
In terms of brand management, this presents a powerful challenge. Agents operating over social media represent the bank. “People feel they are talking not to a person, but to the bank,” Thomas said. “[They’ll say,] ‘I’m not upset with Sally, I’m upset with the bank.’”
Banks need to manage this social complexity in three ways, according to Thomas:
- Learn to have bidirectional conversations across every channel;
- Realize customers are Tivoing you, zeroing in on your messages. (And they trust others more than they trust you); and
- Collaborate across silos to speak with one voice.
Social media’s power as a communication channel is well-understood, even if strategies for managing it are still being formulated. But what about transactions? Thomas said, “What we see are transactions being bucketed into two types: those that require PII (personally identifiable information) and those that do not. For those that don’t require PII, we’re seeing those processed on the social channel. Those that do require PII, we don’t see a compelling reason to move over to social. There is no problem to solve.”
He qualified this when speaking of a move from public to private on social media. “We may see seamless applications, an app iframing a part of your [bank] site. It’s not something Facebook will do.”
Mobile and social are collaborating to transform the way consumers interact with the world. Thomas said, “What’s happened in the last two to three years is we are changing incrementally every day without realizing it. I don’t go to CNN.com any more — the content finds me. Soon, it will be the same with [financial] products. The products will find you like people find you now. How do you create an infrastructure for that day? It’s managing the concentric ripples of how a product gets out there. Fifty years of direct marketing must now adapt to this.”
Given young people’s supposed aversion to branches, will they even want to go to a bank’s website for transactions? Or will banks find them on Facebook or Twitter or Instagram or Pinterest and let them transact in a place they actually want to be? These are questions you should be able to answer — and soon.
