WHY BANKS SHOULD EMBRACE SOCIAL MEDIA - PART TWO

By Kelvin Mkwawa, Seasoned Banker.

Last week, I urged that in the current banking environment, strategic social communication has become an integral component of how banks build relationships with their customers and communities. Hence, banks need to move towards providing faster and more efficient communication solutions for their existing clients and engage with prospective clients. One way to do that is through social media platforms. The bank needs an effective, comprehensive, profitable social marketing strategy that integrates with the rest of its marketing activities. It’s not just about which social media platforms to use, but how to use them, and when. Therefore, the bank needs to define a social media strategy that suits its business.

Also, I pointed out that many banks in Tanzania are lagging behind in their comprehensive adoption of social media as they do not understand how to strategically use social media. For a bank to have a competitive advantage, it needs to embrace social media platforms. 

I shared two reasons why banks should embrace social media: it reduces costs and improves efficiency and improves customer experience. I urged that for those banks that do not use social media platforms yet, wake up as social media is here to stay and will continue to be a major player in the bankingindustry. So it is imperative for a bank to plan how it will utilize the social media platforms. So how can social media help banks? This week I will share two more reasons why banks should embrace social media:

• Finding potential customers - According to the Tanzania Communication Regulatory Authority (TCRA), the number of internet users in Tanzania is 23 million with most of them browsing while on the go via mobile devices. It is safe to assume all internet users have access to social media since mobile users just love to flock to social networking sites and platforms. Through social media, banks can monitor online conversations to understand the behaviours and needs of prospective customers, which will enable the banks to design new, or modify existing, products based on those needs.

• Communicate effectively – In the banking industry where customer’s interaction is necessary, it can be challenging for a bank to communicate important messages to a wide audience via normal channels. Being in the industry of trust, it is very important for banks to find a way to become more transparent to customers. Social media platforms can make that happen by enabling banks to respond quickly to customers’ inquiries and engage with them anytime, anywhere. We have seen the impact social media can have on banks by reducing costs and improving efficiency, improving customer experience, finding potential customers and help the banks to communicate effectively. So banks shouldn’t ask themselves whether they should invest in social media or not but, rather how they can use social media to improve their bottom line. Banks must embrace social media to create competitive advantages as competition comes from everywhere and having a competitive edge over the competitors is important as ever before. To truly realize the power of social media, banks must move beyond the deployments of social media platforms. Instead, they must adopt a culture that solicits and take action on customer feedback and continue to foster the culture that embraces the voice of the customer throughout the bank. This will enable a bank to develop and sustain customer relationships that extend beyond single transactions. Lastly, to the banks which do not use social media, you are missing the biggest opportunity to connect with your customers directly.

Written by Kelvin Mkwawa, MBA
Seasoned Banker
Email address: Kelvin.e.mkwawa@gmail.com