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Customers Want to Friend Their Banks In Social Media

High income customers seek to read other customers' reviews and receive information about financial services on social media sites.

Social media presents a wide open opportunity for banks to connect with customers, according to a new consumer survey: while only one in 10 Americans with checking accounts currently connects with their bank or credit union via social media, 36% say they would like to. These consumers say that if they did link up with their bank on a social media site, they would read alerts about promotions or offers (56%), read reviews from other customers (46%), contact customer service (45%), receive rewards for recommending the brand to others (41%), or connect with a financial institution's profile page (35%).

American consumers' usage of social media sites such as Facebook, myspace, Twitter and LinkedIn is very high, according to this survey of 3,000 online American adults, conducted by Fiserv and The Marketing Workshop (to participate, respondents had to have a checking account and some responsibility for paying bills). The survey found that 94% of Gen Y (21-30 years old), 90% of Gen X (31 to 45), 78% of Baby Boomers (46-64) and 65% of seniors (aged 65 and up) all use some social media sites. Facebook is surprisingly popular across the board: 88% of Gen Y use it, 81% of Gen X, 65% of Baby Boomers and 55% of seniors, according to this survey, which was conducted in August. Next, YouTube is watched by 58% of Gen Y, 46% and 31% of Gen X and Boomers respectively, and 13% of seniors. Myspace is still used by 44% of Gen Y, down to 7% of seniors. Twitter is used by 31% of Gen Y, 26% of Gen X, 16% of Boomers and 7% of seniors.

However, only one in 10 of these American consumers have connected to their bank or credit union via social media. Those that have, say they done so to receive information about financial services (66%), receive information about offers or promotions (32%), review other consumers' opinions or advice or post reviews (31%), post complaints or questions (31%) or conduct customer service related activities (30%). These bank-connected customers are active users of financial services: they have an average of 5.7 banking services, versus of 4.19 for those who are not interested in social media.

Fiserv's white paper on this survey notes that high income users ($100K+) are more likely to use social media networks to receive information about financial services and to review other customers' opinions. "Based on these findings, financial institutions should include financial research and advice in social media communications to target high-income consumers," the report concludes.

Among Americans who don't connect to their bank through social media, nearly half (46%) said they would rather go through the bank's website, 45% cited privacy concerns, and almost a third (31%) cited lack of awareness as a main reason (45% of Gen Y consumers indicated they didn't know they could). So banks that want to seize this opportunity to court their customers on social media sites will need to educate them about how the bank engages in social media, the benefits of social media versus the website, and how to not share private information.

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