India’s leading banks came together in Mint’s IT in Banking Conclave to discuss the effects of internet, particularly social media, to banking in India.
Panellists said, even though of the security issues posed by the use of social media, it is here to stay.
The use of new media and the internet can significantly make banking transactions easier, cheaper and ultimately create new opportunities in tapping saturated markets.
Social media can be used to the advantage of banks also customers can use it to discredit a bank. A lot of people now use the internet for banking and a large number of people who come to their local branches are also users of social media. The only time they go inside the bank is when they need a personalized solution that is difficult to offer over the internet.
Social media is just an addition to the existing service models of banks for the customers. There are many areas of social media that is not as effective but the question is how to use it to the benefit of the customers and the banks.
- Indian banks get about 30,000-40,000 mentions on social media every day
- Last year 50% of those mentions occur during work hours, now only 15% occur during work hours
- 1.2 billion people, 40% unbanked, 91% consumer purchases made with cash
Abonty Banerjee, head, digital channels, ICICI Bank Ltd: “The customer profile is changing. He has more information, more access and is becoming more demanding. The customer is also much more engaged with us. He is willing to interact more and it is up to the banks to use this. The banks should wake up and solve their service issues or create a lot of interaction with them. The social media is the best way to do that.”
Amit Sethi, senior president and chief information officer, Yes Bank Ltd: “Banking is the art of being where the customer is. So if my customer is on social media, Internet, mobile, the bank will have to be there. How do we use these forums to reach out to the customers is something every organization has to decide on its own. There are people who will be extremely euphoric and use all the strategy around social media, while some may be extremely fearful and feel it may disrupt the way they function.”
Sridhar Iyer, director, digital business, Citibank India: “At Citibank, we use social media to reach out to our customers. We use the customer insights we gather form our followers from Facebook. For example, to identify an appropriate location for an ATM, we used Facebook. There are quite a lot of ways one can use the social media which, I believe, is a great tool to understand customers better.”
Aruna Rao, executive vice-president, Kotak Mahindra Bank Ltd: “At the end of the day it is not only about social media or new media but also many other things. As far as risk is concerned, it is not customer risk but our ability to strategize well. About 67% of the new project spends are invested in new media and we have to be very careful as to how we make these investments.”
Despite noticing a number of innovative social media initiatives in 2012 from the leading indian banks like ICICI’s online banking app in facebook, I was still impressed when I first come across this article earlier this month. Indeed the participating banking executives showed a lot of maturity and intelligence towards social media.
Of course, one can argue this open mindset is due to the outstandingly high adoption rates of social networking (India counts over 54 million facebook users). But despite all of that, it is refreshing.
In your opinion, in 2013 can the Indian banking industry established itself as a digital innovation leader in the worldwide financial services industry? In a country with over 300 million unbanked, how big is the role of social media to connect with those people and drive financial literacy?
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