Banking shows off its ‘social’ credentials

The race among lenders to get noticed and make a lasting impression in the public’s psyche is only heating up. Traditional marketing tools like billboards and television advertising may retain their charm as THE preferred medium.

But in a gradual but perceptible shift, social media is emerging as the new destination for bankers to reach out to a wide array of customers.

The reason is not too far to seek. The big driver is the cost of setting up a social media platform is minimal for banks, and on top of it, the reach is overwhelming by all accounts.

Kotak Mahindra Bank, one of the more active banks in the arena of social media, spends about 5% of its total advertising budget for this new form of marketing, says Karthi Marshan, head-group marketing.

“Compared to mainline marketing, social media would be extremely cost competitive. At budgets less than Rs2 crore a year, banks could do a good job of managing an active social media presence,” adds Sanjay Mehta, joint chief executive officer, Social Wavelength, a social media marketing firm that also manages Kotak Mahindra Bank’s visibility in this space.

Just how useful the networking mechanism is can be derived from the fact that a whopping 90% of customers accessing banking services on social media platforms are men, and close to 75% of the total users are in the age group of 18-34 years, say experts. “While the penetration is across the board, the youth and young professionals are more adoptive of social media,” says Anindya Datta, president & chief marketing officer, Yes Bank.

What is stoking the trend is major private sector banks have all come out with internet applications — popularly called apps — which not only help connect with an existing customer, but also attract prospective ones. While some of these apps are purely marketing devices to promote new offers and discounts, some are plain utility services as well.

HDFC Bank, often ranked as a topper when it comes to utilising the social media space, runs the Money Matters section on its Facebook page. Through this, the bank engages visitors by putting up interesting news articles, small puzzles and games to educate users about various banking tools and even posting latest offers on cards and loans at the bank.

Axis Bank, too, is not behind, which boasts of an active presence with its interactive apps and offers that allow the bank to communicate with its target audience. “The brand campaign apps like Meri Zindagi ka Safar and Meri Zindagi ki Picture both have seen more than 20,000 monthly active users,” said Manisha Lath Gupta, chief marketing officer.

Similatrly, ICICI Bank has come out with a special Facebook application for its customers to enable them to access their accounts through the networking site. The ‘Your Bank Account’ application allows the customer to check account details, upgrade credit cards, get account statements and request for new cheque books.

“In our in-house research what we had noticed is that, till about 18 months ago social media was the last resort for customers to complain about the brand. But nowadays, customers prefer to go to a social media site first,” says Marshan.

What’s more, HDFC Bank even lets its customers voice their grievances on the bank’s Facebook page. “We have consciously allowed users to post their complaints on the wall and not redirect them elsewhere, thereby answering them within a 24-hour framework and allowing others to read the reply,” says Nimesh Shah, head maven, Windchimes Communications, which is powering the bank’s new-age networking.

Experts see the trend very similar to what happens in banks globally. Security and regulatory issues around banking have made banks tread a cautious line before going the whole hog in embracing the newest way of connecting with people. However, “Globally, innovative engagements have been deployed by banks, to encourage new account openings, use of net banking as against branch banking, acquisition of new customers and the like,” says Mehta.

There may be a definite ease with which customers get their problems solved through social media. But what is coming in the way of customers and banks alike is online security that is proving to be a major concern for them.

“We’re trying our level best in reaching out to customers and educating them through our Twitter handle (@SBIConnex), that they should not share their account details online, under any circumstances unless they are confident about the security,” says A Krishna Kumar, managing director and group executive (national banking), State Bank of India.

SBI has deputed a team at its global information technology centre in Belapur, Navi Mumbai, to work on the bank’s social media presence, Kumar said.