Banks are learning to like what social media has to offer.
Social media and banking – can it ever be a relationship that works? In June, texts and social media sites such as Facebook and YouTube were held up as allegedly being used to spread rumours of financial instability in Bulgaria that created a run on the banks, the first in the country for 17 years.
It raises the question – how can banks address negative information that spreads like wildfire across social networks – given that their presence on social media is so limited?
According to research from payments provider TSYS, only 5% of banking customers follow their banks’ social media pages/feeds. Even if a bank wants to counter misinformation through those channels – its reach is not wide enough and its brand is not strong enough.
In a smart move, Facebook has instead become a channel for banks to provide account information through, much like a mobile app. CaixaBank in Spain was the first European bank to offer customers the ability to check account balances, make micro-donations and personalize their cards with photos via their own Facebook pages. Turkey’s Denizbank was the first bank to have such an offering. RBC allows customers to access their accounts via Facebook, as do several banks in Asia.
If this practice takes off, as inevitably it will, then Facebook will have no need to be a bank – instead it will made itself a necessary channel for every bank in the world, much like PayPal has disintermediated the payments world and now has banking partners.
It can be a win-win and a relationship that does work. Facebook averts any challenges to becoming a bank but collects its fees, and the banks do not have to invest money into developing social media platforms without the expertise to do so.
And finally if those who are swayed by information disseminated via social networks are more engaged with their banks on social media because those banks happen to use Facebook as a banking channel rather than just a marketing channel, then there is a better chance for misinformation to be limited.