Social Media & The Banking Industry

Social media is causing shift in the way we communicate both personally and professionally. People are becoming accustomed to having online discussions with businesses they frequent and businesses are increasing online activity in order to provide better customer service, generate proactive dialogue, address customer needs and build better relationships. Financial institutions are also increasing their social presence to achieve various objectives – including engaging better with customers/prospects, providing quick and easy customer service solutions and to provide additional resources.

In addition, the demographics flocking to social networking sites are becoming more varied. The 35+ demographic on Facebook now represents more than 30% of the entire user base, and the 55+ audience grew over 900% in 2009. LinkedIn also has over 60 million members from over 200 countries and territories around the world.

E-commerce sites, real estate, the entertainment industry and others are all realizing the importance of representing themselves in social media and joining in the conversation with clients and consumers. The banking industry is no exception. Banks are now using social media for community building, customer service, product research, marketing and promotion, and to show transparency and authenticity. Community sites are becoming popular for relationship building and as hubs for innovative financial services and there are hundreds of sponsored and independent blogs on banking issues now being published on the Web.

However, will all of these new opportunities available for increased engagement with clients, prospects and influencers, there are many challenges; in particular with an industry-wide lack of ROI measurement. Entering the social media space as a financial institution has its advantages in the ability to be first to market, showcase cutting edge resources for consumers and help build brand loyalty – but it’s important to be careful to maintain an authentic voice and ensure security for users. Additionally, what are you using to track your success? Having an increase in the number of your Facebook fans and Twitter followers is not enough. But is there a good way to measure conversion of online leads to new accounts? Regardless of what industry you are in, it’s important establish your key performance indicators for success before you launch social initiatives.

As technology advances and we become more connected to one another online, we can expect that more aspects of our lives will be affected and enhanced through social media. Whether that is through online banking communities, sharing business interests with others or your personal family photos, we are putting our lives online in a much greater capacity. This will allow for increased sharing of global information across all demographics and a closer connection personally and professionally.

Are you launching social initiatives for your business? If so, what advantages and pitfalls are you finding? What metrics are you using to track success? Leave your thoughts in the comments below.

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