Social media is having a major impact on the way the retail banking sector communicates with its customers. There have been a number of high profile successes and failures in recent years. They illustrate the point that social media engagement has become “mission critical” now that over 55% of the population is on Facebook in Australia and there are over 1 billion users world wide .
The big Australian banks are getting much better at using social media as part of the marketing mix. The majority of the effort is focused on reactive reputation management. That’s an important capability to develop. But it is not enough. If the technology trends in the US are anything to go by there is a significant development on the horizon which is likely to be very disruptive in the retail banking sector.
A start-up in the US is leading the charge. It’s challenging the status quo and bringing an element of ‘cool’ into retail banking. This company is Movenbank (read Move ‘n’ bank) and it has in its sights all the ‘digital natives’ – the generation which has grown up with social media.
From the moment you land on movenbank.com you know this is a company that thinks differently. The tagline on the site is “Movenbank – spend, save, and live smarter! Even signing up to the bank- by connecting your Facebook and other social media accounts- is quick and interesting. Toward the end of the sign- up process you are given a “Cred score”. It is a transparent assessment of your “credibility score” (not a credit rating) which measures and lets you know in real time your “financial fitness”, and rewards you for spending, saving and living smarter. It draws on a wide range of data, including your social media influence, as well as answers to some finance focused questions. In other words Movenbank is deploying “big data” to shape its engagement model.
The new bank has a mantra of “no paper, no plastic, no hidden fees”. It means that they are placing mobile banking at the centre of their customer experience. The owners of Movenbank see the adoption of mobile payment systems – they use Near Field Communication [NFC] – as an opportunity to change the way banking is done. NFC uptake is currently focused on New York and San Francisco but this technology is likely to be quickly and broadly adopted. Movenbank is developing a future where the bricks and mortar model of banking is a thing of the past. As the bank’s Chief Mobile Officer said in a presentation in Singapore, Movenbank’s customers can be “always banking, never at a bank”
It won’t be long will it be before this kind of model is rolled out in Australia, probably by one of the major banks (which have been early adopters of online and mobile banking)but possibly a new entrant to the market. The time seems right. The digital natives are now becoming decision makers and business owners, and the idea of ‘digital and new’ is capturing the market’s imagination.
The GFC has placed a lot of stress on retail bank customers over the last few years. They will be amenable to a disruption that delivers them a better way to manage their affairs and a higher quality service.
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