Banks and the fear of social media

Banks generally, in Oman too, are not open to social media, that’s a fact. There seem to be the same initial fears that ATMs, internet and mobile banking created: security, reputation and control.
Everybody is on social media especially generations Y and Z (born in the mid-1980's and later). Generations Y and Z have strong preference for communicating electronically and do much of their banking online, rather than walking into a branch. Knowing that the majority of the population is very young shouldn’t local banks be on social media too? Shouldn’t they find a secure way to interact, provide a higher level of customer service and be able to improve their reputation?

Facebook, blogs, forums and the likes should be banks’ preferred communication channels as the youth seeks more in-depth financial advice, due to higher amounts of debt and unemployment, and guidance on mortgages and investments.
So are banks missing a great opportunity by not being there? Yes. I can think of several reasons, except the obvious ones such as promoting a new product/service, job opportunities, etc, why banks should be on social media and bring new meaning to customer centricity.
Forging new connections: banks can use a social platform wisely to generate immediate and impactful results on social customers, many of whom use social media as an "operating system" for their work and social lives. For instance, wouldn’t it be useful to have a live chat, in a secure way, with your personal banker while you’re comfortably sitting on your couch? I’d love that. 
Social business is a pivotal outlet for building communities: selling banking products and services can be understandably complex. However, building communities around products and services opens up a new way for consumers to inquire, engage and share material. Wouldn’t it be great if a bank had an online forum totally dedicated to banking where everyone shared ideas, opinion, and experiences and learn the latest trends, products and services from the bank but mainly from each other? 
Product research and education: Whether you're crowd-sourcing to find out what customers think of your services, or using social media to encourage customers to develop new products, social networks provide a channel to solicit ideas and input. In fact, social customers expect to be able to input ideas, rate experiences and debate ideas. How about having a blog completely dedicated to educating, motivating and empowering students to make the best of the money they earn and do more with the money they spend? Helping them learn the differences between needs, wants, and wishes? Or simply how to buy smart.
I could go on; the point though is that I can see big potential for banks in establishing relationships that can result in long-term customer loyalty, by satisfying these groups’ needs through education and targeted services while, at the same time, reinforcing the brand’s objectives. 
Generations Y and Z don’t want their bank neither to be a Facebook friend nor to be ‘cool’; all they want is to be there for them. 
Why do you think banks are not embracing social media? Is it because of regulations/legalities? Is it because they don’t know how? Is it because they would need to have a proper customer service department? Or is it because they don’t act in a transparent way?


5 comments:

  1. Banks fear negative comments/feedback in a market where they are used to calling the shots. That is stopping them from venturing into social media.

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  2. I agree with Kishor. And it's not just banks here, many big companies see Facebook as a potential hazard...but don't they see that if people want to complain about their service, they will do it anyway? Better to have them do so on your page where you can at least respond and fix the problem!

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  3. they are not into social media simply as they pay no real attention to their customers who would be the key element in the 'social' bit. Imagine, companies cannot have ATM cards which work on both cash withdrawals / in shops. The applies to Oman headquartered banks, major international bank and banks in Oman from neighbouring countries. Today we were advised that as a company if we need cash - it has to be after queuing in the bank or by cheque (cheque!) rather than ATM, want you staff to get petrol with a ATM card , no way - go to the bank for cash or pay by cheque....lol.
    Step into that bastion of banking Bank Muscat and the waiting time will soon be measured in days, venture in to the bank that is so up to date that it uses ancient Egyptian themes for the ATM decoration (Oman International ! Bank ) and it seems as if they havnt redecorated since they were established.
    Far easier to ensure there is no real delivery system for complains and then - like magic - there cant be any problem because we havnt had a single complaint.
    Probably Japanese tourists will be coming here soon to see the last remaining country in the world that dosnt use pay by mobile phone which came about because the banks feel that having integrated their cheque clearing system that have gone the extra mile in upgrading customer service that its now the acme of banking excellence.

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  4. Every word banks utter in the media or publish is screened by teams of lawyers as they daily toe a very fine line in the type of business they are in. Ever noticed that you have no say in the way your credit/debit card works, in the loan papers you sign, in the agreement that regulates your bank account. They make all the rules, and they have to be very careful in how they word things so as not to get in trouble with the law, and keep customers in line. The last thing banks want to do is dealing with the aftermath of putting a big foot in their mouth on Facebook. Maybe they are thinking on how to do it, but it is a diplomatic feat. We are talking about money, a very big taboo.

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  5. Maybe they're afraid that, when / if one of their staff makes a mistake, the whole world will see it...the angry customer might tell them off on their site instead of sorting it out person-to-person.

    But then again, if a customer is unhappy with his / her bank, she can write about it on his / her personal facebook site or blog...banks should think about it.

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