Social media is transforming banking relationships in very significant ways, from improving customer service to allowing users to send money to others via online platforms. New financial technology companies are using social media data to help people get access to credit or even simply open a bank account. Social media can even impact your ability to get a loan. Integration is happing so quickly, it is possible to argue that social media platforms may be the banks of the future.
Social media platforms can no longer be considered places where people simply connect and communicate in real-time with the click of a button. Platforms, such as WeChat and Viber in Asia as well as the global powerhouse that is Facebook, are increasingly providing a broad range of services to their users either directly or through partners, making them central to people’s lives.
Such high levels of penetration, use and engagement have meant that financial institutions are starting to recognize the opportunities social media can bring to their businesses. They are looking to gain a competitive advantage over other institutions while also trying to mitigate the threats posed by social media, such as when people share highly sensitive information publicly.
Ongoing innovation seen in Banking offers opportunities – and challenges – for today’s financial institutions. This innovation can range from new technologies and processes, to embracing mobility and social media. In the meantime, FIs must balance their desire to embrace these newer technologies while being aware of customer sensitivity toward data protection and data sharing. Banks and other financial institutions must keep these needs in mind when evaluating when – and how – to best leverage the use of social media and other solutions when engaging banking customers.
Overview by Ed O’Brien, Director, Banking Channels Advisory Service at Mercator Advisory Group
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