Boston, MA -- (SBWIRE) -- 02/10/2014 -- Social media presents a valuable opportunity for retail banks. As internet access and smartphone adoption increase, a growing number of internet users are becoming involved with social networking. Companies are changing their business models and product offerings to be able to cater to the ballooning market of social media users. Banks and other financial institutions are engaging customers with social media, which is shaping up as a strong channel to promote new schemes, identify customer needs and receive feedback. Although the use of social media remains risky territory for many banks, some have started to explore opportunities in this channel and have set out many best practices examples that can act as guiding principles for other banks and financial institutions.
A primary question plaguing the banking industry on the use of social media concerns return on investment (ROI). There are doubts over the credibility of social media as a key component of business models due to a lack of tools to measure quantifiable results. The potential benefits are more of qualitative in nature. Despite initial skepticism by retail banks, social media is expected to emerge as a complimentary channel, rather than replacing existing channels such as television and newspapers. Financial services companies use various channels to market products and services, and consumer opinion is now measured as an aggregation of experiences across these channels. Over the next five years, banks are expected to focus more on synergies that can be generated by social media and other key channels, rather than calculating ROI in the social landscape.
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- Social media marketing has gained increased focus, and retail banks are changing their business models and product offerings to cater to the ballooning market of social media users. Social media interactions provide companies with a platform to reach out to customers and deal with issues in real time, increasing both the quality of their service and levels of consumer trust.
- The increasing prevalence of the internet and widespread adoption of smartphones have fuelled social media expansion, with more than half the internet population now engaged in social networking. While Facebook, Twitter and LinkedIn have established themselves across the world, local social networks such as Vkontakte and Sina Weibo are more widely used in Russia and China.
- Although the use of social media remains risky territory for many banks, some have started to explore opportunities in this channel and have set out many best-practice examples that can act as guiding principles for other banks and financial institutions. There is increased focus on the use of analytical tools, capitalizing on expertise of third-party professionals, and use of social platforms to engage customers in real time to improve brand image.
Companies Mentioned in this Report: Facebook, Twitter, Linkedin, Citibank, Lloyds, Capital One, American Express, Orkut, Tumblr, Banco do Brasil, Itau Unibanco, Bradesco, YouTube, Promsvyazbank, Vkontakte, Stroycredit, Bank24.ru, Odnoklassniki, Sberbank, VTB Bank, Alfa Bank, Bank of Moscow, HDFC Bank, ICICI Bank, Axis Bank, Sina Weibo, Qzone, Tencent Weibo, Pengyou, Renren, Bank of America, Chase, Wells Fargo, Barclays, NatWest, HSBC, Halifax, Nationwide, Tesco Bank, Commerzbank, Deutsche Bank, ING DiBa, Targobank, Volksbank, National Australia Bank, Commonwealth Bank of Australia, Westpac Banking Corporation, Australia and New Zealand Banking Group Ltd, Suncorp Bank, SunTrust Bank, Cookerly Public Relations, SapientNitro, Hootsuite, Guaranty Trust Bank, Banco Bilbao Vizcaya Argentaria (BBVA), ING Direct Canada
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