Banking Through Social Media – Is It Possible?

Banks try to woo customers in every possible way. Hence, it was not surprising to see them enter into the social media space.

But recently, Forrester came out with a report saying that 71% of people surveyed have little or no interest in accessing their bank accounts through social networking sites like facebook and myspace. Now, the main reason why this is so is because of one prime reason – fear. People are worried about hackers and privacy. Now this is a reasonable fear in today’s time as privacy is not one of the social networking sites’ forte. I had written about the privacy control of facebook here. Online banking, once thought to be not safe at all, is finding customers nowadays. People were skeptical about mobile banking too, though now, many have started using the service.

All this doesn’t mean that banks should not use social media. In fact, banks are indeed using social media to connect to their customers. A survey found out that 20% of U.S. consumers between the ages of 18 and 24 were influenced by online video when it came to choosing a bank. Also, over a third were influenced primarily by social media such as social networking sites, blogs and online reviews. Gen Y is most influenced by social media and banks try to make them loyal customers. One example is Well Fargo’s Stagecoach Island, a virtual world, which the financial giant is using to bond with customers, advertise and put up a friendly and caring face to the digital world.

Financial institutions have incorporated services meant for community building. Take for example ‘Open Forum‘ which is a social community sponsored by American Express that targets small business owners. When a bank launches a new product, social media networks are abuzz with the news. Customer feedback is incorporated and the product is bettered. Social media is also being used to increase the brand value of banks or to market a specific product or service that captures the spirit and trend of online media. The current financial crisis has led many people to distrust banks, which is why many banks are now turning to social media to increase transparency and to build trust. Banks also indulge in writing blogs to serve its customers.

As you can see, banks are coming up with innovative ideas to use social media. As Henry Ford once said,

“If I asked people what they wanted, they would have told me a faster horse.”

What do you think of this new trend of accessing bank accounts through social networking sites? Do you think people will start using this service?