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Preparing Your Bank for the Next Generation Customer

Preparing Your Bank or Credit Union for the SOCIAL CUSTOMER Popularity Social media popularity continues to grow in all age groups and in all types of channels. Time spent on social media increased from: 88.4 BILLION MINUTES 86% 81% in 2011 to of US online of small businesses 121.1 BILLION MINUTES in 2012 adults engage now use social with social media media You Tube in YOU TUBE FACEBOOK TWITTER LINKEDIN GOOGLE+ 750 million unique monthly visitors 110 million unique monthly visitors 65 million unique monthly visitors Google +1 button is used 5 billion times per day 800 million unique monthly visitors 250 million unique monthly visitors Over 4 billion hours of video are watched each month on YouTube 74% of adults log into Facebook at least once 10 tweets per second mention Starbucks Linkedin gains 2 new members per second per week Social Networking Site Usage AGE GROUP 100 - 18-29 80 30-49 60 - 50-64 40 - 65+ 20 2005 2006 2008 2009 2010 2012 ТАКЕНОМЕ: Social media isn't just for teenagers. Consumers and small business owners are using social media and their use has increased dramatically in recent years. Social media has simply gotten too big to ignore. Touchpoints Branch touch points are on the decline: While 67% of customers say local branches are "very important", 45% of bank customers visit their branch fewer than five times per year 81% of consumers visit Teller transactions have decreased their local Fl monthly or even less often almost 42% since 1992 Social touch points are ramping up: 58% 78% 896% of social media users said that companies' social media posts impact their purchases Engagement with brands via likes, comments, and shares on Facebook surged to 896% over the previous year of social media users go to social networking sites to learn about or research products Over 40% of high-net-worth 31% year-over-year growth for number of financial customers visiting leading social networking sites individuals younger than 50, viewed social media as an important channel for communicating with their (Other industries average only 8%) in financial institutions. TAKEHOME: While the branch reigns as the primary cross-sell channel, financial institutions are losing more and more opportunities each year to touch customers through the branch experience. The market is ripe for new touchpoints for building relationships and cross-selling products and social media has emerged as a new way to interact with customers to gain their trust. Competition Your financial institution may choose to ignore social media but research shows your competition does not. HOW ARE BANKS USING SOCIAL MEDIA? 63% Building awareness with Social presence of the top 50 banks customers 55% Creating visibility with partners Facebook 90% 50% You Tube YouTube 92% Extended PR tool y Twitter 50% HR and recruiting 88% 48% Engage with journalists in LinkedIn 100% + Google+ 42% Sales and marketing actvities 74% 33% Internal communications 25% TAKEHOME: Resolve customer service issues Your competition is likely using social media and may be using it to lure away your customers. While the banking community has been slow to adopt social media, they cannot afford to ignore it any longer. 15% Don't use social media Risk Risk and regulatory issues should not be a reason to completely avoid social media. 52% of financial institutions cited regulatory issues as their greatest issue with social media 50% of FIs said they are aware of regulatory requirements on social media in banking, but 27% said they are not sure what it looks like and how it affects them engagement. FINRA (Financial Institutions) and SEC (Investments Advisors) provide regulations for everyone in the financial industry to maintain: • All companies must have a social media policy in place to lay out usage guidelines, supervision, training, etc. Social networking sites and blogs • Supervisory/tracking policies and procedures regarding raise new regulatory challenges, rates/marketing/advertising per FINRA/SEC requirements particularly in the areas of Not having a social media policy in place, even one prohibiting supervision, advertising, and social media, is the most common violation of FINRA industry books and records requirements. regulations. Failing to enforce existing social media policies was the second - FINRA Chairman and CEO Rick Ketchum most common violation I Product representation and UDAAP issues TAKEHOME: While regulations do provide more uncertainty, tracking, and risk, plenty of financial institutions have shown successful strategies while living within these limitations. You cannot ignore the impact of regulations on social media but you also cannot ignore social media because of regulations. Benefits Three sure-fire ways banks and credit unions can use social media: COMMUNITY BUILDING WEBSITE TRAFFIC CUSTOMER LOYALTY Tablet users touch their 74% of brand marketers saw Failure to respond via social channels can lead to up to a an increase in website traffic after investing just 6 hours per week on social media. financial institution 30 times per month 15% increase in churn rate for existing customers Social media is the perfect avenue to add more customer touchpoints by creating a Social media is as much about sharing Customers expect their banks to be online strong online community. While visits to content as it is about answering and social. One needs to create a strong branches are declining, your customers questions. By pointing people to a website social plan, adopt the necessary are are spending more and more time on (through links), you can generate a significant boost to web traffic. resources, execute, and then continually social channels, improve upon your plan to ensure it has a positive impact. ТАКЕНОМЕ: A great first step is looking internally to determine where social media could have the greatest impact. Then create a plan focused in that one area keeping in mind that the plan can grow as you see the impact it makes to your business. DELUXE, CORP Sources: Media Bistro: Gartner: FINRA: BakerDonelson: MHP Comm: My Private Banking: Com Score: NYTimes: Adobe: Forbes: Neilsen: Chadwick Martin Bailey: Pewlnterest: EBİZMBA: YouTube: Linkedin: Forrester: % OF INTERNET USERS

Preparing Your Bank for the Next Generation Customer

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