I launched the Visible Banking Blog back in February 2007, almost three years ago… Time really flies. Since my first post, I have always aimed to share with you my passion, my views, and some unique insights on social media in the Finance industry: not only Banking, but also Financial Services, Credit Cards, Asset Management, Investment Banking, Private Banking, Insurance…
In October 2009, I started to contact some of the passionate, and highly knowledgeable, people I met (online and/or offline) all over the world, during my speaking engagements, my business trips, on linkedin, on twitter or via my blog. I invited them to contribute on VB. I was delighted with the extremely positive and warm responses. Thank you all.
My key goal is to provide you with some second-to-none insights of social media and financial services all over the world, and to give this experts another plateform to share their knowledge and their views.
I have also started to schedule another type of contribution focused on specific topics such as reputation management or “anger management” (detractors involved): loads of highly exciting topics, stay tuned!
I am delighted to introduce the fourth guest blogger on Visible Banking:Jesus Perez, CEO at Financial Red.
Financial Red is one the leading European blog networks focused on Finance and probably the most active blog network in the industry in Spanish. In the last six months, Jesus and his team started to enjoy some great traction in South America too.
Jesus has also successfully organized two BarCampBank events in Madrid. I was delighted to contribute to the second BarCamp Bank Madrid on 30 November 2009.
Guest Post #4 – Overview of Social Media and Banking in Spain
In Spain, part of the banks are strongly committed with this type of initiatives and in some cases Spain is one of the leaders of these initiatives. While this happens, some important entities are still missing. Recession has prevented investment in some of these initiatives, but we note that the investment is picking up in the last months.
The fact that Spain is the country with the highest number of bank branches per inhabitant in Europe is the key to understand which has been the most important strategy to win clients for our financial sector. Nevertheless, the specialization one might expect from each one of these branches is probably lower than the European average, since on the contrary Spain is the country with fewest employees per branch in Europe.
Therefore, the main worry of Spain’s banks is to meet the needs of its greatest clients-winning channel: the offices, which make up the environment on which the relationship with the clients is based. For this reason, any growth strategy has always entailed a greater number of offices. Offices that were bought as bank assets and which have pushed banks to own an important real estate portfolio, part of which they have sold during this economic crisis.
Most banks in Spain understand that the Internet channel is a way to make the relationship with the client more effective, and to decrease the office burden. Nevertheless, they don’t see the Internet as a channel to communicate with the client. Only a few banks have started taking a few steps in this direction. But the incentives structure of the network makes this channel to be understood in many occasions as the competitor of the branches network, and therefore it normally does not have real power at commercial level. This fact determines that the Internet strategy depends on the branches interests. Only some banks which have decided to clearly separate their online business from their offline business to avoid this problem are able to draw up purely Internet strategies (also with a much more aggressive financial offer). But this separation discriminates online users in the commercial network, since many of them do not even have the right to any offline service.
Therefore the dilemma is to choose between a purely Internet bank or a bank with branches and use the web as a channel to perform operations. New generations avoid offices and use the Internet. People under 35 years old carry out almost all operations through the Internet.
But the main problem about using this channel for the bank is that its financial prescription power is even more lost in the web since communication with the client is non-existent. The prescription is looked for through search engines or more specifically through financial comparators, where users get the information they need to make their financial decisions. If on top of that we consider the increasing trend of making the branch a purely commercial place where the bank becomes very demanding with its employees to get certain products sold, we can understand the prescription loss which the branch-based strategy starts to suffer.
For this reason, the opinion in the web is increasingly relevant, even if the banks are not participating in this conversation yet.
In this general context, the strength of the financial sector in Spain and the innovative nature of some banks have allowed some to go for the Internet channel and the relationship with the client. This measure has enabled some Spanish initiatives to become a reference in the whole world.
We could classify these initiatives in the following groups:
* Presence in Social Networks and Marketing 2.0 (All the Banks)
* Creation of communities around banks (Banca Civica, Actibva)
* Relationship with the client: (Banco Sabadell)
* Management of knowledge, HHRR: (BBVA Open Talent, Bankinter Labs)
* New 2.0 tools (Mi Cuenta)
* New 2.0 products
Presence in social networks, marketing and communication
Most banks have started positioning themselves in social networks such as Facebook and Twitter. Currently, this positioning does not go beyond having a news channel where certain information is published, lacking of publishing criteria in most cases, and with nobody in charge of starting conversations with clients. Almost all Spanish banks have opened a twitter or facebook account.
IBanesto started to go for presence in traditional social networks with unconventional contests and advertising such as LowCostFilm, which explored the viral aspect of these new environments. Their strategy started with the decision to use the Internet as the main Marketing channel and it was successful at winning clients for products such as current accounts and mortgages. This is one case study for the ROI of an advertising investment, nevertheless it is a unidirectional strategy towards social networks; a 1.0 strategy for a 2.0 environment.
In this sense, some of the initiatives that some entities are carrying out are merely communication strategies, like www.inversiseventos.com, which try to create new communication channels with social networks users giving them the option to leave comments. Nevertheless, their approach is mainly information based and its aim is only to provide relevant financial information to users.
This phenomenon bears an important risk for the specialized press, since these entities are taking the intermediary role of the media in fields where the press can not compete on knowledge. This phenomenon puts the press in a complicated position, unable to compete in the amount of social media content of users, nor in quality compared with financial entities.