Banks can reap rewards from social media
The banking sector in India is undergoing massive transformation as far as digitization is concerned. With most banks in the country already reaping the benefits of core banking system, they now feel the need to take their banking operations to the next level. While market competition is prompting them to promote their products and activities through different channels, they see customer engagement as the key differentiator. Toward this end, many banks in India are using social media to increase customer engagement and satisfaction.
A recent report by Unmetric, a social media benchmarking company reveals over the past one year, banks in India are increasingly using social media such as Facebook, Twitter and YouTube to connect with the consumers, while at the same time, making them aware of their promotional offers and other activities.
The social scenario
The report notes that in Q1 2013, there are a total of 6 million Facebook fans, 50,000 Twitter followers and 9000 YouTube subscribers for Indian banks. At the same time, for every 1,000 Facebook fans, there are just 8 Followers on Twitter and 1.5 Subscribers on YouTube. Of these only three banks have crossed the one million Facebook fan threshold including HDFC bank with 1.5 million users, ICICI Bank with 2 million and Axis Bank with 1 million respectively.
As expected, the PSBs are slow in adopting social media even though many of them are planning to consider this tool over the next 2-3 years. Of the 26 PSBs, only IDBI Bank has its presence on Twitter and YouTube, apart from Facebook. On Twitter, HDFC Bank is the leading bank with a score of 110 followed by ICICI Bank with a score of 108 and Axis Bank with a score of 93, according to the report.
During January and march 2013, Standard Chartered Bank leads with 2,780 per cent fan growth, as the account was created only recently in Dec 2012 followed by HDFC Bank with a growth of 120 per cent. IndusInd Bank with 90.6 per cent growth also nearly doubled their fans.
However, experts opine that by merely increasing likes and fans may not indicate profitability through social networks. Social media analyst Rakesh Bhatt believes that unless banks use social media analytic tools to understand customer needs and preferences and use those data to build new products and services, social engagement may not offer them tangible benefit.
The report also used algorithm based on the number of likes, comments, shares and estimated impressions was used to produce a standardized score to rate fan engagement. In this area, IndusInd leads with a score of 390 as high percentage of fans interacted with the posts followed by DCB bank at 358 and ICICI bank at 104 respectively.
Lakshmanan Narayan, CEO and Co-founder of Unmetric Inc states that brand news, polls and posts about Corporate social responsibility have the highest levels of engagement. Ad Campaigns also saw high engagement, despite being one of the least posted items by Indian banks, he says.
Of the other social media usage, banks are yet to leverage the potential of Twitter. The Unmetric report finds that less than 60 per cent of banks have shown their presence on Twitter. Kotak Mahindra Bank comes out on top with 17,409 followers followed by IDBI at 12,484 and ICICI Bank at 7,483. A few banks in India have YouTube account, even though with the advent of video, this is considered to be a powerful way to connect with customers. Unmetric finds Axis bank to be the most popular on video followed by HDFC.
“There is a clear and obvious division between the social media efforts of private sector banks and that of the public sector banks,” says Narayan while adding that private sector banks have made huge progress in the last few months, but public banks are yet to catch up.
“However, banks have to use social media carefully, keeping in mind customer segmentation. For example, a 60 year old customer in India may not like to use social to reach his banker. Private banks are looking to reach the younger generation and tap in to the socially savvy middle class that already does most of its banking online and uses social media to keep in touch with friends and family around the world,” says Shrawan kumar, IT Head, Allahabad Bank.But this does not stop banks from innovating with the social platforms, believes Bhatt. To capture the youth population, this could be ideal as the young generation rarely visit the bank and more banks - both PSBs and private - will continue to harness social media and analytics to enhance customer engagement in the coming months.
Cooperative banks not far behind
Not only bigger banks, small corporate banks across the country are also seeing much gain in engaging customers through social platforms. According to Crijos Baretto, CEO, Bassein Catholic Bank, a Mumbai-based cooperative bank, social media can be an ideal for smaller cooperative banks that cannot afford to spend a great deal on product promotion and marketing. He explains that before using social media platforms, very few young generation customers visited the bank. “We have started to expand our presence in the social space and acquired a flurry of customers between ages 20 and 30 years, who are active on social media sites,” he says.
Bhatt mentions banks can engage with people is through creation of blocks and tracking them using various metrics and techniques. It is also important for banks to feature their online address besides physical addresses in different advertising mediums and channels, apart from their own websites, he says.Narayan believes that the best way As the Unmetric study shows that social media when harnessed properly, can tremendously impact the revenues of banks.
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