While many account holders use online and mobile banking tools to manage their finances, some consumers are willing to turn to alternative channels for money management. A new study from Javelin Strategy & Research reports that 1 in 10 consumers are comfortable using social media sites to review or check account balances.
While 10 percent is a relatively low number, it indicates that forward-thinking, tech-savvy account holders are searching for opportunities to use social media tools for their banking activities. I spoke with Mark Schwanhausser, Javelin's Senior Multichannel Financial Services Analyst and author of the report, to get his take on what social media means for the financial industry.
The banking industry likes to control messages, and it often has to due to regulatory concerns. However, social media changes the dynamic and demands on a financial institution, and whether they like it or not, bankers cannot avoid social media. Instead, they'll need to focus on making customers feel more comfortable and how to use social media to deal with customer issues more effectively.
While social media features do present ways for banks to further engage account holders and potential new customers, the study indicates that we have a long way to go before banks understand how to leverage Twitter as a reliable customer service tool. Part of the study analyzed the effectiveness of social media in resolving customer issues at Citi, Wells Fargo and Bank of America. In one area, Citi won the gold medal for responsiveness by resolving 36 percent of customer questions. Wells Fargo and Bank of America lagged behind with 11 percent and 3 percent resolution rates, respectively.
The study also showed that consumers often intuitively direct tweets to incorrect Twitter handles, which is essentially like calling an incorrect customer service phone number. The catch: thousands of other online users notice the lack of response.
Even when answers are provided, I'm guessing that Twitter will be far too impersonal to act as a customer service department for some account holders, and Schwanhausser points out he doesn't expect call centers or tellers to ever disappear.
"Social media is not a replacement for call center or in-branch interaction. It's an option. It's not for all people now, and I don't think it ever will be," he says.
Services such as Twitter and Facebook have revolutionized the way we interact with each other, and I'm sure they are poised to transform the way we communicate with our banks. The question of how long that transformation will take remains, and banks will need to balance the confidentiality of information with the convenience of rapid customer service to answer it.
What do you think? Would you feel comfortable using Twitter for your banking needs?