Social media is particularly a powerful channel of communication and therefore is of significant value to firms. Social media allows firms to contact their customers and vice versa, both pre- and post-sale. There are now more ways than ever to receive promotions, deals and points from financial services companies. Financial institutions are using the social web to facilitate payments, provide deals and gain customer’s trust. Social media has become a standard channel of communications for customers. Digital devices are growing on an exponential level. Globally, 46% of consumers have access to social media with digital devices to make informed purchases. The top three social networks used by business to business marketers include LinkedIn (62%), Twitter (50%), and Facebook (30%). Social media facilitates two-way communications and enables banks to ‘talk’ with customers and members.
Possessing fun and friendly qualities, social media affords a distinct opportunity to sensationalize bankingsolutions with creative campaigns and positioning. Social media affords the control, flexibility and precision required to obtain quality results within any budget, proving to be a compelling supplement or alternative to various forms of traditional advertising. This approach to advertising better enables financial institutions of any size to compete in the same space, offering value to banks that may not have the same resources as some of their national competitors.
Social media is transforming banking relationships in significant ways, from improving customer service to allowing users to send money to others via online platforms. New financial technology companies are using social media data to help people get access to credit or even simply open a bank account. Socialmedia can even impact your ability to geta loan. Integration is happening so quickly, it is possible to argue that socialmedia platforms may be the banks of the future.
By providing the ability to share valuable information with the community, social media offers the means to demonstrate that the institution understands consumer needs and positions the bank as a leader in financial services. To be recognized as a reputable banking resource, financial marketers should share relevant content in the form of personal finance tips, industry updates, investment advice and more. Such insight also illustrates the supportive nature of the institution, increasing consumer confidence in the bank’s dedication to consumers’ financial well-being. High levels of penetration, use and engagement have meant that financial institutions are starting to recognize the opportunities social media can bring to their businesses. They are looking to gain a competitive advantage over other institutions while also trying to mitigate the threats posed by social media, such as when people share highly sensitive information publicly.
There are five key areas where social media is changing financial services around the world:
- Customer Service
- New product/service development
- Reducing costs and improving efficiencies
- New business models
Pakistan is also part of this international social media network and it has become a new avenue or means not only used by companies and individuals to promote businesses in the country, but also to generate opinions regarding social and political issues. Social media has been gaining vast popularity among the masses in Pakistan mainly due to Facebook, Twitter, Skype, Instagram etc. The introduction of mobile broadbandcoupled with the influx of affordable smartphones had a catalytic effect on the use of social media in Pakistan. People turn towards social media to voice their opinions, experiences, suggestions and feedback on any topic or constituent of the society.
In addition, regulative complexity and atraditional cultural mindset has meant that until recently, the financial services sector has lagged behind some othersectors in their comprehensive adoptionof social media and technology. Low internet penetration, lack of local content and language barriers are some of the general problems that also affect the social media adoption in Pakistan.
Many of the new players in the financial services sector are still trying to find long-term profitable business models that will stand the test of time. Generally, adoption has been slow and most traditional banks today have only implemented limited programs, which are often run in isolation from the core business and not as an integrated solution. The opportunities social media provides do not concern only customer service and marketing, but more fundamentally affect the products and services themselves. New business models are changing the entire industry. Large, complex and highly regulated entities are being forced to learn how to innovate and roll out new ideas in agile ways to test and reiterate quickly.
The friction that exists across the industry today would be dramatically reduced when all deposits, payments, remittance and investment can be handled within social networks in easy and intuitive ways. Social media is changing the way the financial services industry operates; the future is bright for increased financial inclusion, lower costs and better customer service. With the progression of technology and developments in telecommunications, new media is reshaping in the market in which financial service provider companies are operating. This is an irreversible process of change and industry convergence that started in the nineties during the internet boom and whose outcome is yet to be explored.