On the FutureLab site, Ed Thompson shares some excellent ideas in an article titled 3 Ways Retail Banks Could Get More Benefit from Social Media. Read the entire article to see the details. In summary, Ed suggests that banks implement:
- Social banking. To do this, Ed recommends that banks “create a current or savings account with interest rates individually tailored based on a customer’s ability to recruit more members to the bank.”
- Social micro saving. Banks would do this by creating a savings account which encourages customers to micro-save via banks’ social platforms.
- Social budget planning. As Ed puts it, “Mobile or social apps that let people compete over their personal budgeting targets could drive more careful budget planning and financial prudence.”
My take: These are excellent ideas, but they highlight a terminology problem that pervades the industry — and marketing, in general, for that matter (which should not take away from the value of Ed’s ideas, however).
The terminology problem here is using the term “social media” as a synonym for “social.” This is wrong. Something can be social without it being deployed on social media. Unless, of course, EVERY website and app is an example of social media.
Banks and credit unions can do — and have already done — some of what Ed suggests without relying on social media. There are non-social media-based rewards programs that reward customers for referrals. Bank of America’s Keep The Change program was an example of micro-saving that didn’t involve social media.And I strongly believe that gamification will become a part of many of the PFM platforms that are popular within the industry today
There’s no reason for banks and credit unions to assume that a social media site, like Facebook or, um… okay. like Facebook, is the only place to implement a “social” tactic.
In fact, there are reasons why banks and credit unions should avoid social media to deploy social tactics:
1. PFM. Implementing social budget planning within a PFM platform should help drive use and engagement — which I would argue is a prerequisite to realizing ROI from PFM (and I would also argue that few banks or credit unions are truly achieving any meaningful from PFM today).
2. MFI. Over the next few years, merchant-funded incentives will become a more popular way for FIs to monetize the online channel, and to make more effective use of payments data. Driving traffic to their own sites, and to their mobile banking offerings, will become critical to the success of their efforts. Not to mention critical to the success of the FI’s own internal digital marketing efforts. If you push your customers to Facebook, Facebook decides which ads and messages they see (please let me know if I’m wrong on this assumption).
3. Apps. The impact of smartphones and tablets has yet to hit financial services. The prospect for FIs to deploy Ed’s suggestions through mobile apps is a greenfield opportunity.
Please don’t give me the “800 gazillion people use Facebook, so that’s where banks need to be” argument. People are very good at compartmentalizing, and people can be trained (ugh, that sounds terrible, doesn’t it?) to use certain sites for certain functions. Facebook doesn’t need to be the platform for everything.
Bottom line: Ed’s recommendations are all worth consideration. But don’t get caught in the social=social media trap.