FINsights: The Rise of social media in Financial Services-Balancing Risk and Reward
Financial services firms consistently hold a narrow view of social media. These firms do not engage the customer beyond building and retaining their own closed communities. FINsights explores various views of adoption of social media from retail banking to capital markets. Our experts provide insights into the advantages of leveraging social media while exploring the myriad applications of social media-from crowd sourcing for product advice, to gleaning insights from communities, and to adopting customer service practices on the social media channel.
Harnessing the Power of social media in Financial Services
By Shanmugam Periasamy
The power of social media will have a significant impact on the way financial services conduct business; this can have a transformational impact in their corporate thinking and marketing capabilities. From connecting directly with end customers, or engaging with employees, to collaborating with partners, social media provides a significant value proposition that companies ignore at their peril. As stakeholders increasingly adopt social technologies, the potential of social media can help companies grow customer loyalty, increase growth, and unleash their potential. This paper provides insight into how social media technologies can be exploited effectively by financial services enterprises to build their brand, increase sales, and improve customer satisfaction.
The Facebook Phenomenon: How to use existing social media to Better Engage Consumers
By Kiran Kalmadi, Rajat Gurnani, Sukhna Dang
The financial services industry has undergone a radical change, as today’s customers are online, networked, well connected, and embracing Web 2.0 applications. This shift in customer behavior has forced banks to rethink their strategies, and slowly but steadily build their presence on social networks, in order to understand their customers better. The buzz around adoption of social media by the banking industry is on the rise and this trend is expected to continue. The industry focus has shifted from ‘customer service’ to ‘customer engagement’ and social media is the new way to engage customers. social media helps banks to build and maintain relationships with existing and prospective customers. Usage of social media not only opens another service channel for the bank but also helps in educating them. Banks should realize that social media is here to stay and leverage it to engage their customers better.
Designing New Financial Products for the Social Banking Age
By Balwant C. Surti, Yamini Aparna Kona
The growth of social networking offers several opportunities for banks—viral marketing, co-creation of products with consumers, providing self-help and co-operation through forums, and more. Social networking also offers opportunities for designing and offering new financial products, and services not previously possible or feasible. With banks not having much of a choice today but to join their customers as they go forward with social networking, let us look at the potential offered by social networking, and how banks must leverage the opportunities available to design new products and services around social networking. The idea is not merely to link financial products to social networking in some way, but to really understand the potential that social networking offers and use that potential to define new products, or variants of existing products with an entirely new flavor.
Improving Customer Advocacy: How Banks should use Blogs, Ratings and Reviews
By Phil Freegard
The use of user-generated ratings and reviews is a mature and mainstream concept for retailers and consumers-real testimonies provide insight and transparency. Financial services lag behind the retail industry with only a handful of companies providing ratings, and even fewer implementing them well. Banks are naturally conservative and fearful of open and public dialogue with clients; the trouble is that this traditional approach is failing. This paper explores best practice for retail and other industries. It also addresses organizational barriers and arguments that have prevented their introduction. It throws light on who is doing it well and who is successfully following. Finally, it discusses opportunities for introducing ratings in financial services organizations and shows where companies are delivering real return on investment.
Moving from Managing Customer Relationships to Increasing Customer Engagement
By Kiran Kalmadi, Yogesh Prakash Mishra
The financial services industry has undergone a radical change as today’s customers are online, networked, well-connected and embracing Web 2.0 applications. This shift in customer behavior has forced banks to rethink their strategies and slowly but steadily build their presence on social networks in order to understand their customers better. One of the biggest shifts that has taken place is banks’ limitation is managing customer relationships. Customer dialog which was controlled by banks, and was once the biggest driver of customer loyalty and satisfaction, has moved out of banks’ control because of social media. In this environment, banks have to shift focus from managing the customer relationship to fostering customer engagement within and outside the bank ecosystem. Some banks have looked at social media as a technology play or customer service play, and have responded by setting up Facebook and Twitter accounts, with a few service associates monitoring social media messages. We believe that this is going to prove inadequate, as a new customer engagement strategy requires transformation across the enterprise, and establishment of a new mindset which is focused on transparency, speed of response and communication processes spanning beyond banks’ immediate eco-systems. We believe that the right customer engagement strategy will differentiate the winners from the losers in a financial services business where, due to regulation, the customer will be forced to consolidate service providers and go for bundled products and services.
Banks: To Tweet or Not to Tweet?
By Rituparn Prem Dixit
Financial institutions around the globe largely grow as their customer base grows. In this sense, traditionally, banks have been very close to their customers but their interactions have been limited to few channels such as branches, call centers or traditional media. With the advent of social media, this is about to change and we are already witnessing the ways banks can utilize social media tools such as Twitter to connect with their customers, thereby creating a greater impact than traditional media, and with far lesser cost than one could imagine. This article analyzes the usage of Twitter as a tool of choice by both banking and non-banking institutions; how banks have leveraged Twitter to their advantage; and where Twitter can help banks in the future.
Overcome the Social Barriers in Retail banks
By Anjani Kumar, Somil Mittal
The reach of social media is extraordinary. Increasingly, younger generations use social networks and make choices based upon online recommendations. In addition, with consumers’ trust in banks touching an all-time low in recent years, negative comments by disgruntled customers act as another dose of negative reinforcement. In such scenarios, retail banks cannot ignore the power of social media. However, failure rates of social media adoption by banks are high. Banks face many challenges that hinder their effective adoption of social media. Banks can however overcome the challenges and leverage the full potential of social media by following a structured and optimal approach to adoption.
Corporate Banking and social media - a Paradox?
By Jayakumar Venkataraman, Swetha Bais
Retail Banks and businesses around the world are working on ways and means to leverage the power of social media to reach out and connect to their customers. Lately B2B companies have also adopted social media and the attendant technologies to varying degrees that enable them to drive their business forward. In many ways social media technologies are the biggest technological developments since the advent of internet showed individuals, businesses and everyone in general the potential and opportunities in a truly connected world.
Emerging Opportunities in Capital Markets
By Rajesh Menon, Shashidhar Bhat
Financial services firms serving individuals scramble to get their act together when it comes to social media. Everyone seems to be rushing headlong with Facebook pages and Twitter handles. From the surface it appears that capital markets and corporate/institutional segments focused on banking are not going to feel any impact of this revolution. But few would have predicted that Yves Saint Laurent would have an online channel (www.ysl.com). Sheer demographics show that generation X and Y are coming of age and wealth; they expect a different client experience. So it would be premature to conclude that capital markets will not experience any impact. So we analyzed each aspect of the front, middle and back office to identify the value social media can deliver. Our conclusion: social media can change the rules of the game, but innovators have to overcome a few hairy challenges.
Supporting the Enterprise: social media can make the difference
By Muthukumar Krishnan, Debodeb Datta
Business is all about people and nothing enforces this idea more than the concept of social media. social media is a medium through which people interact, inform, and express their ideas, and are both the generators and consumers of information. This is a means to support an enterprise’s business strategy, which can focus on many aspects-a marketing strategy, a knowledge management strategy, a growth strategy, etc. social media has been used either in informal settings like Facebook, Orkut, MySpace, etc., or in a formal setting for an enterprise’s external clients or customers. social media is an equally powerful approach to develop a robust and efficient enterprise when used internally. This article highlights the approach to use social media within an enterprise to support its strategy.
Developing Insights from Social Listening and Social Analysis
By Venugopal Subbarao, Yogesh Bhatt
Growing penetration of social media and social networks has a direct influence on enterprise CRM process. However, in the current social media wave, social conversations will have more direct impact on enterprise products and services being offered. There’s a growing need for organizations to tap into this social listening model first, gather insights and take a holistic view of feedbacks, complaints, customer networking and risk potentials before strategizing actions to drive better profitability.