Social media lend banks a helping hand

Social media lend banks a helping hand

Lenders around the world have been slow to embrace social media, mainly because this novel form of communication represents a whole new way of thinking about their business. But one of the biggest challenges that banking faces could become a huge opportunity for players that use it right, say experts.

Anda Sebesi

As social media use has become ubiquitous, industries have been hard at work determining how best to take advantage of popular social network communities. With Facebook having over 500 million active users, Twitter processing over 155 million tweets per day and LinkedIn posting details of over 100 million registered professionals, it is no wonder organizations are looking for ways to leverage what social networks bring: people. With the explosion of interest in social media and online networking, lenders have realized that they need to reassess their business models and dedicate some resources to this environment.
International specialists say that the advent of social media has created a tipping point in the industry as more and more bank customers migrate to popular networks. It is obvious that the impact on lenders is complex, from communicating with customers to how they deliver their products.

At the international level many banks and financial institutions have chosen to capitalize on the potential of social media. From Bank of America to Discover Financial, American Express to Wells Fargo, firms have dipped their toes into the ocean of social media.
According to international press reports, Bank of America, the biggest US bank, has engaged a top recruiter to hire three executives to run its online and mobile banking operations. The move comes as smart phones become more popular and customers abandon cash in favor of electronic payment systems. In other words, social media is a new world that no player can afford to ignore.
Lenders are using social media to tap into a growing demographic and to control the conversation about their brands, say international specialists. In practice, the appeal of social networking is that it offers instant communication with customers.
“For the banking system, social media is a took intended to educate and open a dialogue with those who no longer really trust banks. Besides, lenders can improve their image, open a new communication channel with their customers and promote their products on online platforms,” says Cristian Manafu, consultant at The Connector. “Social media is a long-term commitment – or at least it should be.”

According to Shuja Shaikh, managing director at Kubis Interactive, an online marketing agency, both banks and other financial institutions want to get rid of their impersonal image and try to promote a community, rather than appear monolithic and imposing. “With a focus on better customer service, banks are adopting a personality that brings the human factor into financial services. In addition, social networks are powerful research and development tools,” says Shaikh.
Because of the open communication found on social media, it is easier for companies to monitor their brand identity, share their brand values and build trust. In addition, younger people communicate a great deal through social networks and are increasingly ignoring traditional press, broadcasters and marketing. “This makes social media the best platforms to test and launch innovative services and get immediate feedback,” says the Kubis Interactive MD. He considers social media a great opportunity for brands to build a good reputation.
Although it is a general trend, Manafu says that local banks have sought their own place in the world of social media and have taken their own specific approach to this new channel based on their needs. “More than this, in many cases they have created real case studies for other countries,” he says.

Turning to the success that Romanian operations have enjoyed in social media, Shaikh says it that it is based on strategies adopted by sister-branches across the world, which local managers have tweaked to make them suit the behavior of local users of Romanian social platforms. “For Romanian-based banks it is a competitive learning process,” he says.
As for the benefits for lenders, Manafu adds that in the first place it is about making their presence felt in social media and proving to their customers that they can be found there. “An ideal situation would be to open a channel of customer service and communicate their products and services. For a strong bank it is important that its offline and online presence are strong and diversified in order to reach many people as possible,” he says.
The economic turmoil makes it even more important for businesses to reach out to customers any way they can. Sites like Facebook, Twitter, LinkedIn and Foursquare are contributing to how companies sell their branded products. “Banks are getting involved in social media because they need to be talked about. They have to be prepared to open up their system, become more transparent and get up to speed with everything,” argues Shaikh.

Lenders bank on social media
BCR, BRD-Groupe Societe Generale, Citibank, GarantiBank, Raiffeisen Bank, ING, Banca Transilvania are among the banks present on the Romanian market that have decided to jump on the social media bandwagon. By having a page on Facebook or Twitter or being present on LinkedIn, players are choosing to exploit the potential of this environment and use this opportunity to promote their image and products. For example, Biz magazine and Blogal Initiative rolled out a social media campaign for BCR from June 6-July 5, which promoted the bank’s refinancing loan. During this period the combination of terms “BCR refinancing” was mentioned in Romanian social media 483 times on blogs, Twitter, Facebook and the online press.
Overall, the estimated reach for all “BCR refinancing” hits in the blogosphere was 1.5 million unique visitors and 2.6 million impressions. “The results of the campaign were beyond our expectations. During this campaign, BCR’s visibility on blogs increased by 150 percent,” says Daniel Pana, marketing manager at BCR.

Banca Transilvania (BT) chose to be present on social media – on Facebook, Twitter, YouTube and LinkedIn – because the bank considers it an environment that generates awareness of its brand and it intends to be present in all the environments where it is talked about. According to BT representatives, online social networks give the lender a new way to interact with its audience.
As for Twitter, this is a channel that the lender intends to develop in the future. At present, the bank uses the online message service to put out news about its activity, exchange rates and the quotations of the investment funds of BT Asset Management SAI. BT decided to tap into social media a few years ago when it first contributed to YouTube. In addition, since 2009 it has had its own profile on Facebook. Now the lender has a social media community of about 4,000 people. The most recent campaign rolled out exclusively on social media was the “Agenda BT Art” contest. Its goal was to promote one of the bank’s innovative projects – the BT Agenda – and its Facebook profile. As a result, the number of downloads of the BT Agenda increased by 100 percent while the promotion of the contest through Facebook generated over 5,500 entries.

Similarly, Andreea Catuneanu, PR and advertising manager at Garanti Bank Romania, says that social media can no longer be ignored. “We take an integrated approach to communication with our customers where communication channels complete one another and help us to be permanently in touch with our target,” she says.
The bank started to communicate actively and strategically on its Facebook page in April. “The main benefit is that we are always connected with our customers, receive feedback more easily and can act quickly in order to improve our services,” says Catuneanu. She adds that a formal approach is no longer enough. “There is a need for interactive ways to transmit the benefits of our products and services.” At present, the bank is running a campaign on Facebook intended to encourage bill payments through alternative channels – internet banking, ATMs, direct debit – and at the bank’s counter.

According to Bianca Dordea, brand and communication director at BRD-Groupe Societe Generale, the lender started to think about social media at the beginning of last year, with its profiles on social networks going live in the second half of 2010. “Our Facebook profile gathered over 3,000 fans in less than a year,” says Dordea. She adds that the bank’s decision to have a presence on social media came naturally as the number of users is constantly growing. In addition, many of them are interested in the financial-banking system.
“Facebook is an ideal tool not only for increasing brand awareness, but also to obtain valuable insight directly from the consumers of banking services,” adds Dordea. According to her, the bank has tried to animate its profile on social media using original ways of interacting with its users.
“For example, they had the chance to post messages to encourage the ARCA team of scientists, supporting their experiment to send the first Romanian rocket into space. They could also participate in contests to win meetings with Ilie Nastase and Nadia Comaneci,” says the director. The bank was also the first to host an online chat on Facebook with potential buyers interested in accessing credit through the First House Program. And the results were promising, she says.
“The contests generated a 10 percent increase in the number of fans of our page in 10 days, while the online chat organized on Facebook about the First House program meant that we reached our available allocation for this type of loan in less than two weeks,” says Dordea.

Last but not least, Raiffeisen Bank launched Raiffeisen Community, an online platform for debate and a source of information about its community, at the end of May. The Raiffeisen Community also has a Facebook profile.
“It is a blog for our community, employees, partners, customers and friends where we talk about urban ecology, sport as part of a healthy lifestyle, education, art and culture,” says Corina Vasile, senior director of the communication and PR department at Raiffeisen Bank.
“We sell solutions for the most diversified financial needs that a person can have. That’s why we are interested in what people think, do and the ideas they have. You can find out more quickly and directly what people think and what problems their communities face, and thus we can react more rapidly,” says Vasile.
Under the same name of Raiffeisen Community the lender has started a contest for projects to improve the quality of life in local communities. “The contest is being held exclusively online, in the social media style. The projects that win the grant will be the ones that gain the most votes on the www.raiffeisencomunitati.ro blog,” adds Vasile.   

anda.sebesi@business-review.ro

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