Now that the economy has officially tanked, with much blame placed on the banking sector, banks are beginning to rebuild. They are doing so by rebuilding the relationships that were destroyed with the failure of the subprime mortgages. The loss of houses and real estate has put banks in a very bad position. So what are they going to do?
Banks are beginning to use the easiest and most effective tools to date to create interactive relationships with customers. Social Media!
Banks in the Asian Pacific have begun a three-step plan to entire more young people to use these new, forward-thinking banks, according to the article “APAC banks tap new tech for Gen Y” in ZD Net Asia. A study by IDC’s Financial Insights saw that there will be much more focus on online and mobile banking that will include aspects of social networking, blogs and podcasts.
ING Direct has created an entire social network for first time home buyers, which will presumably be used by the younger generation that actively participates in social networks. The site is set up around forums and advice columns. This is all reported in the article, “Banks target social networks like Facebook.“
Micheal Aranta, a senior manager at Financial Insights Asia-Pacific stated how the banking industry must think to gain the trust of the younger generations: “Ultimately, banks should realize that the battle for the Gen Y segment can be won, not by simply building on top of traditional strategies, but by using innovation to respond to preferences that make the Generation Y unique from older generations.”
Those preferences can be summed up in one word: interactivity.
I think the Asian Pacific banks are track when it comes to interactivity for the audience they are trying to reach. But do you think this will catch on in the United State? I guess we’ll have to wait and see. All audiences want choices, as stated in the article, but I’m not sure mobile banking and social networking, particularly, are a smart idea privacy wise. Of course this also has a lot to do with how the company implements the social media and how they use it. If it’s open two-way communication a user might leak something (subconsciously) of their own identity leading to identity theft.
This was a very thought provoking post and really got me thinking about my comfort level in regards to social media system focused around banking. To me, banking is a private matter. I don’t need to monitor my banking so desperately that I feel the need check it everyday on my mobile phone when ATMs are everywhere, and my participating bank is right around the corner. In fact, I used to have online banking but I just found it annoying and I can’t possibly fit another password in my head, so I switched to good old fashioned paper mail statements. Personal preference I guess. I just don’t trust the technology system quite yet with my banking. And who knows maybe having social media will help build that trust.
Comment by KarlynWilliams — 6 March 2009 @ 4:37 am
I can definitely see where Karlyn is coming from with her comment. I don’t know if banking is an area of business where social media is necessary. I think this push to use Web 2.0 technologies could go both ways. It definitely gives more opportunities for others to obtain personal information about you that they could possibly use against you, but it can also bring valuable information about the banks right to customers’ desktops. I use online banking with my bank, but that’s about as far as I’m willing to go at this point. I don’t think I would participate on a blog or social networking site. Like most uses of social media at this point, we will have to wait and see if it catches on in our society.
Comment by Thomas — 6 March 2009 @ 3:51 pm
Joey,
Very informative post! I was not aware that banks were reaching out to the Facebookers through banking applications. While I would not add a banking application at this point in time, I do think that the banking industry is going in the right direction by trying to adapt to social media. I can’t remember the last time that I actually stepped foot into my bank… I think it may have been when I graduated high school and needed traveler’s checks to go to Mexico. That was four years ago and I haven’t been back since. Online banking is more convenient and it makes the process a lot quicker, but banking on Facebook? I think that may be taking things a little too far.
Comment by LeiLani Ching — 7 March 2009 @ 6:06 pm
I agree with Karlyn but I do se what LeiLani is saying. Banks using social media seems like a great idea to reach out to younger generations, though this idea probably needs to be developed a little more before everyone in comfortable with the idea. As LeiLani mentioned, our generation learned how to bank online, therefore it only makes sense that banks are providing us with the tools to communicate about other issues, such as mortgages, online. I can see myself using the ING Direct site when it comes time for me to buy a house in the next five to ten years.
Comment by Kelsey Schum — 7 March 2009 @ 7:16 pm