Over the last few years, there has been a huge technological development that has brought about trends like social media which apparently has come to stay. Social media’s goal is to connect people together and foster socialization between families, companies, and communities.
The banking and Insurance sector is not left out of this advancement as the effects of social media on it are quite overwhelming.
Most of the customers of the banking and insurance sector are on social media and it would be quite unreasonable for this sector or its participants to overlook the enormous benefits that abound in social media. Here are just a few impacts that social media has on the banking and Insurance sectors.
1. Engagement through Online community
Prior to the advent of social media, customers could only get their queries only by walking into the bank or insurance companies, this was frustrating as some customers could not find a very convenient time to seek redress for whatever issues they may be having with respect to the money in the bank or premium they have paid to the insurance companies.
Social media hence has given the leverage to banks and other financial institutions to spread their tentacles by building an online community of their customers.
Through social media, the conventional dull banking hall is now greatly reduced and the banks can use social media platforms to communicate with their customers, thereby reducing the influx of people into the halls seeking redress or information regarding the financial institution’s products, offers or services in regards to their finance.
This has now become easier with the advent of social media serving as a driving force, the banks and insurance companies can now form structural bonds with customers which constitute the provision of essential services such as internet banking, integrated customer databases, innovative channels of redress, etc. to their customers and other partners.
This structural bond helps the consumer to retain loyalty to the financial institution, especially in the ever-strong market competition that exists in the industry. Because of the switching cost involved when there is a structural bond, customers will have to pay a certain fee.
It forms financial bonds and this essentially has a connection monetarily. These are the outcome of some businesses in which the parties involved make economic gains, for instance when a customer feels that he or she is profiting financially from the connection with a financial institution.
When financial customers are given a kind of reward for their commitment to the institution then they have in one way or another other entered into a financial bond with the financial institution.
Lastly, social media helps financial institutions to build relational bonds with their customers, helps the institutions to get to know those they are dealing with, and how to serve them better.
These days, financial institutions get people on standby to attend to the peculiar needs of the customer rather than the random frequently asked questions active on their websites. Customers can now get to trust the institutions more and transact more with them.
The bane of any successful relationship is communication and this is what social media has helped the financial institution to achieve.
With social media, the channel for communication is expanded and the right information is disseminated accordingly ranging from the promo, new products, offers, alerts, or updates on vital information regarding the operation of the institution with social media, the avenue of feedback is guaranteed.
4. Creating a brand identity for the Institutions
Social media can be used to replicate the personalities of financial institutions through their presence and conversation.
How consistent their messages and post often bring about a deep awareness in the minds of the customers and potential customers.
Personality often refers to who the institution is and it often aid to increase the productivity of the brand and the possibility of the brand registering in the heart of the customers especially when thinking of making a financial decision or a plan for retirement.
With the huge cost of traditional marketing expenses, banks were usually unable to meet a large client base no matter how much they had to spend but the advent of social media has helped financial institutions to push their products and services to the face of the clients without having to spend so much like was being spent on traditional marketing in the past.
Knowing the right person to sell to at times will help to better sell effectively. This is what social media has done. The institutions can filter the market and sell to those they want to sell their services to without having to sell to everybody yet, not make a huge impact on their returns on investment.
When the market is properly segmentized, resources will be targeted properly to the right set of audiences that would receive it and likely make purchases or subscribe to their offer.
7. Idea generation
With social media, ideas are easily gotten through the comment, sharing, and interaction of customers, financial institutions can easily get ideas that would help them make their services better or offer better products which would make the financial or insurance needs of the customers better when compared with that of their competitors.
Social media has really planted a lot of impact on the bank and insurance industry in so many ways. It has helped the customers track their finances and given the financial institutions a great face for transparency which furthermore build trust and the insurers or bank understand the customers’ needs and better attend to them. This is a huge advantage both to the customer and the institution.