Saturday, March 3, 2012

Banking and Social Media, The New Paradigm - the 4 Main Components of Social Media Strategy I/IV (Corporate Branding)

Predictions on banking industry

  • Assuming moderate and stable economic growth, we expect total household wealth to rise by more than 50% in the next 5 years from USD 231 trillion in 2011 to USD 345 trillion by 2016 (CS Global Wealth Report 2011)
  • Administration costs will increase, profit margins will decrease
  • Competition among banks has been increasing and will increase further

Banking will remain an interesting business to stay in, but a tough one. In order to prosper, Social Media is crucial

Components of Social Media Strategy

  • Corporate Branding
  • Personal Branding
  • Client Acquisition 
  • Client Retention

1) Corporate Branding

Twenty years ago, marketing and corporate branding for banks was a no go (at least in Switzerland). From the outside you could not even recognize that it was a bank. As we all know, this has changed and marketing and advertising has become very important for banks as well.

The next step is/is going to be corporate branding with Social Media. The current branding with Social Media reminds me a bid of the first car after the horse-drawn carriage. This car still looked pretty much like horse-drawn carriage. Same with Social Media. Banks keep on relying on what they know and so,  they apply the usual marketing approach and methods. 

Keep in mind, 20 years olds spend plenty of time online, on Facebook for example. They are there for having fun. Becoming a fan of a bank's Facebook page is not so much about fun. So banks give them fun on Social Media. Why not offering something similar to FarmVille  --> a social network game on Facebook. On the top FarmVille had 80 million users. 

Instead of letting them build there own farm:

  • Let them build their own bank. Let them compare with their friends. Show a ranking. Let them form teams to build the bank together. 
  • Give them a possibility participate in a social network stock trading game. Generate scenarios and provide them informations, on which they can try to predict future development of their stocks. Teach them like that, the basics about stock markets. 
  • Or instead of calculating based on their Facebook data, what animal they are or how many children the will have, give them the possibility to find out, what “investment personality" they are”.

 The list can be extended arbitrarily but in brief you just have to provide fun and value.

To be continued with...
2) Social Media Strategy "Personal Branding"
3) Social Media Strategy "Client Acquisition"
4) Social Media Strategy "Client Retention"


1 comment:

  1. Marc, so how are banks gonna create value for their clients in 5 years?