Professional Documents
Culture Documents
org/in
p-ISSN: 2394-8906
ARTICLE INFO
ABSTRACT
Article History:
Key words:
Social media vehicles, .
Customer retention,
Customer loyalty in banks
JEC Classification:
Copyright 2016 IJASRD. This is an open access article distributed under the Creative Common Attibution
License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original
work is properly cited.
How to cite this article: Uthira, D. (2016). Augmenting Customer Intimacy through Social Media Vehicles by Banks
A Case Study on State Bank of India. International Journal of Advanced Scientific Research & Development (IJASRD),
03 (03/I), [Special Issue Sep 2016], pp. 30 43.
Augmenting Customer Intimacy through Social Media Vehicles by Banks A Case Study on
State Bank of India
INTRODUCTION
Socially Engaging Banking enables banks to redefine their relationship with
their customers. To encourage greater interaction, banks need to integrate social across
their entire customer experience. Creating a socially engaging bank that listens intently
to consumers can foster a more customer-centric approach that will help alleviate
frustration, boost sales and influence recommendations.
GEN Y can be tapped more easily at social media sites than brick-and-mortar
branches. The huge numbers on social media, leave little doubt as to its popularity. The
youth are not just romancing but also starting to inhabit social media. Even if 10
percent of the customer base of a bank is on social media and is growing over 25 per
cent, it is big enough to create a significant impact.
1.1.1. Introduction to Social Media
1.1.1.1 What is Social Media?
Social Media is a group of Internet-based applications that build on the
ideological and technological foundations of Web 2.0, and that allow the creation and
exchange of user-generated content.
1.1.1.2 The Social Media Phenomenon in India
Easy availability and cheap tariffs have boosted Internet adoption which in turn
has played a significant role in the emergence of a completely new medium called
Social Media.
In India, 40 million use internets on the go on mobile handsets and 82% of these
users use social media applications on mobiles. Increasing usage of smart phones in
India and availability of social media apps on phone is encouraging more participation
in social media networks.
1.1.2 Indian Banks and Social Media
Indian Banks have started using social media in their regular operations in
various capacities and are at different stages of maturity. As of April 2013, some private
banks provide regular updates on the latest offers and allow basic customer operations
through popular social media sites.
A large private bank in India hosted Facebook application on its secure servers
allowing balance amount check, cheque book request, stop payment, etc. Some of the
private banks are using their Facebook page to provide customers, exclusive offers,
product details and customer care services. With a few banks taking the lead, the
direction is set for other banks to offer online financial services through such platforms
sooner rather than later. ICICI Bank,
HDFC Bank and Axis Bank are among the top 10 Banks with Social Media
presence as per a survey by Financial Brand in July 2013.
Banks in India cannot any longer live in denial. There could still be a tendency to
not use Social Media. Banks thinking on these lines may have to remember that their
competition is already active on Social Media, thus threatening their own business.
31
32
Augmenting Customer Intimacy through Social Media Vehicles by Banks A Case Study on
State Bank of India
influence all things and become co-owner of the brand, they would significantly impact
reputation and trust.
(ii) Marketing: Marketing leaders must take the first critical step of changing
mind sets and revising some long-held beliefs about building and managing customer
relationships, which has gone through a paradigm shift from the traditional 5 Ps to the
contemporary 5 Rs (Reputation, Responsibility, Relationship, Reward and Rigour) with
the advent of Social Media
1.1.4 Leveraging Social Media for a Banks Benefit
1.1.4.1 Brand Building
It is a network amplifier, both at its best and worst. Banks' presence on the social
media would help in resolving issues before they are blown out of control. The media is
also a rich source to understand emerging customer trends and preferences.
1.1.4.2 Business Imperative
It is essential for incumbent players to stay relevant to Gen Y to be in business.
An estimated 20 million youth have joined higher education last year and if this trend
continues, in the next five years alone, banks would have over 100 million social-media
savvy potential customers.
1.1.5 Barriers and challenges that Banks have to face in getting into the game
of Social Media
Banks have to ensure that their responses are prompt. Consumers today take
offence at being clubbed together, and demand individual attention. They need a
response at a more personal level.
Existing organisation structures and business processes are the two main
challenges to be overcome in view of a serious social media foray.
Technology initiative not adequately backed up by enough process upgrades and
return on investment.
Banks should develop a broad human resources bandwidth, with digital skills
and competencies to blend with other channels.
Information Security hurdles need to be overcome. Guidelines with reference to
Policies and creating awareness, Access Management, Monitoring and logging,
Testing and Patching information must be in place
The Banks must have a sound knowledge on the connection of Social media and
legal aspects right from the Defamation Law, Anti-Money Laundering Act, RBI
guidelines, National Cyber Security Policy, Information Technology Act, The
Right to Information Act, The Trademarks Act to The Telecom Commercial
Communication Customer Preference Regulations. The Banks should also
strictly adhere to the Ethics of Data usage.
1.1.6 The Route map for Banks to harness the power of Social Media:
Establish business goals; establish social media goals and align to business goals;
Draw up social media strategy;
33
34
Augmenting Customer Intimacy through Social Media Vehicles by Banks A Case Study on
State Bank of India
Private sector banks are embracing social media far quicker than their public
sector counterparts. Use of social media can help make a company appear to be more
accessible, which may explain why most private sector banks have jumped on this
bandwagon, leaving the public sector banks far behind. As private banks engage in
fierce competition with each other to manage the finances of Indias middle class,
Facebook has proven to be a deciding battleground. However, with social media being a
two way conversation, only a handful of banks have dared to embrace the veritable
minefield of actively engaging in two way conversations with customers out in the open.
1.1.7 The Future of Social Banking
Nobody not even the mighty Zuckerberg himself can predict how social
networks will evolve over the next5 years, let alone the next 50. But one thing is certain:
social networking will be a game changer for banks.
1.1.7.1 The value of one
For one, social media will spell the death of mass marketing. Indeed, a small (but
growing) number of banks are already mining their customers social networking
activities to deliver highly targeted offers and promotions. But offering a mortgage to a
client buying a new home is the easy part. In the future, banks will be able to package
together suites of products tailored specifically to individual clients allowing, for
example, banks to vary their interest rates based on each customers potential
profitability and value.
1.1.7.2 Hanging Up the Phone
An out of service ATM may result in a tweet to customers within proximity based
on geo-tracking or usage patterns. Those customer complaints that dematerialize will be
responded to in real-time as customers communicate their issues over social media
channels and immediately get the attention of a customer service representative
who is not only empowered to solve the issue, but is also networked to the branch or
account manager responsible for that particular client.
1.1.7.3 Transforming Branches
While the branch network is probably not about to disappear, there is every
indication that the rise of social media will dramatically alter their value proposition.
35
Everyday transactions will be conducted through social media apps will enable the
bank to verify credentials and serve up balance information and payment functionality
using the social networks authentication system. Instead, branches will be used to
conduct more complex customer transactions like mortgage and loan applications or the
provision of investment advice.
1.1.7.4 Tellers to Tablets
Banks will start to dramatically reduce their cost to serve as transactions become
increasingly automated. Many of the in-branch staff will be replaced by tablet
computers Offering off the street clients a direct portal to the banks social media
offerings. But, more often, branches will sit in the pocket of the consumer, virtually
eliminating the overhead and hard costs of the branch infrastructure.
1.1.7.5 Opportunity Brings Risk
On the other side of the ledger, banks will also find that some of their existing
revenue streams may dry up or disappear altogether. Basic investment advice, for
example, will quickly lose its value as peers start to share their insights and experiences
with each other for free, thereby undercutting the banks ability to charge for these
services.
1.2 Objectives of the Study
1. To identify the Key Performance Indicators (KPIs) in order to effectively evaluate
Social Media engagement of Banks
2. To propose the development of a measurement framework that identifies the
level of Social Media activity of a Bank.
3. To identify a clear cut route map, which can be generically applied by all banks
for adopting Social Media.
1.3 Limitations of the Study
1. For the purpose of this paper, it was decided to use a single case design instead of
a multiple case design. The reason for this it elaborated upon below:
The choice of using State Bank of India for this paper is not random. SBI is
the largest bank in India and also one of the leading banks in India when it
comes to social media usage. It is therefore a strategically chosen case.
Banks also offer products and services that are relatively similar in nature. It
can therefore be argued that by examining one bank, one can get a picture or
an idea of what banks in general are doing in social media rooms such as
Facebook, and how this medium can be a useful tool for financial institutions.
2. Information for the purpose of this paper is only with reference to and from the
perspective of Banks and not customers.
1.4 Review of Literature
Financial Institutions have experience and embraced several challenges due to
competitive pressure, customer needs and new technology developments. Between 2002
Volume 03, Special Issue 03, Version I | 28th September 2016
36
Augmenting Customer Intimacy through Social Media Vehicles by Banks A Case Study on
State Bank of India
and 2007, Internet-banking transfers in the US and Canadian banking industries grew
by 239 per cent and bill payment by 138 per cent (Zuccaro and Savard, 2010). Another
example is that in 2009, 88 per cent of the Swedish population had never actually
visited a physical branch. This gives an indication that most of the day-to-day banking
is being replaced by digital interactions. It is also stated that the most important
interaction channels for a bank on a daily basis will be ranked as follows: 1: Mobile, 2:
Internet, 3: ATM, 4: Call centers, and 5, Branch. The physical branch has traditionally
been where the service delivery of financial products has taken place, and it is still a
mentality in the industry as many banks still reinforce a branch-led approach. As the
branch function has changed, and been replaced by technology, it is interesting to see
how new channels is fit for delivering banking services.
According to the financial forum, sites like Twitter and Facebook are the new
battlefields for banks. These are forums for banks to have a dialogue with customers,
get an overview of critique against them, and a chance to defend themselves. It has been
speculated that in the future, banks may even use social media channels to give
financial advice.
The fact that several financial institutions are present on Facebook makes it
interesting to see how banks are using the technology. A banks offerings involve money,
personal economy and other complex deliveries, making it fascinating to see how they
use the open and transparent medium of Facebook. It is also interesting to look at
whether or not Facebook is fit for a financial institution in order to deliver the service it
is supposed to deliver to its customers. Banks are able to develop personalized messages
to sell customized products and services, as they have rich knowledge of customers life
stage, assets, risk preferences, and so forth.
RESEARCH METHODOLOGY
2.1 Sample Selection and Data Analysis
State Bank of India has been chosen for this single case study approach adopted
in this paper. Focus Group Discussions have been conducted with the Social Media
Team of State Bank of India for the various inputs required for presenting the case.
2.2
Statistical Tools
37
DATA ANALYSIS
Table 1: Assessing Social Media Goals/Policy with reference to usage of social
media vehicles by banks
Assessing Social Media
Goals/Policy
Strongly
disagree
Disagree
Neither
Agree nor
disagree
Agree
The
social
media
strategy
adopted by the bank relate to the
vision of the bank
following
social
Strongly
Agree
to
Table 2: Evaluating and identifying the banks Target Audience with reference
to usage of social media vehicles by banks
Evaluating and Identifying
the banks Target Audience
Strongly
disagree
Disagree
Neither
Agree nor
disagree
Agree
Strongly
Agree
Strongly
disagree
Disagree
Neither
Agree nor
disagree
Agree
Strongly
Agree
38
Augmenting Customer Intimacy through Social Media Vehicles by Banks A Case Study on
State Bank of India
The competitors engage more
actively in the usage of social
media than you
Strongly
disagree
Disagree
Neither
Agree nor
disagree
Agree
Strongly
Agree
Strongly
disagree
Disagree
Neither
Agree nor
disagree
Agree
Strongly
Agree
*
Table 6: Planning the Banks content creation with reference to usage of social
media vehicles by banks
Planning the Banks content
creation
Strongly
disagree
Disagree
Neither
Agree nor
disagree
The bank is
keeping posts
succinct and not lengthy
Agree
Strongly
Agree
The
social
media
site
is
performing an organic search
basis for wide range of relevant
terms
Strongly
disagree
Disagree
Neither
Agree nor
disagree
Agree
Strongly
Agree
*
40
Augmenting Customer Intimacy through Social Media Vehicles by Banks A Case Study on
State Bank of India
The bank is responsible for IPR
issues/defamation post on social
media.
Table 8: Calculating the Banks Social Media Results with reference to usage
of social media vehicles by banks
Calculating the Banks Social
Media Results
Strongly
disagree
Disagree
Neither
Agree nor
disagree
Agree
Strongly
Agree
Grand WAS
Evaluation
4.2
Agree
4.7
Strongly Agree
4.8
Strongly Agree
3.4
Neither Agree
3.9
Agree
3.8
4.2
Agree
4.5
Strongly Agree
focus
on
3.1 Interpretation
The countrys largest Lender State Bank of India is making all efforts with its
customers on social media too. The bank strengthened its presence with the launch of its
channel. With all the major private and international banks already having a sizable
presence on social media, the move by State Bank India is predictable.
41
42
Augmenting Customer Intimacy through Social Media Vehicles by Banks A Case Study on
State Bank of India
[7]
Social
Media
and
the
Banking
Industry.
Retrieved
from
http://robertoigarza.files.wordpress.com/2008/10/art-social-media-and-the-bankingindustry-unknow-2007.pdf
[8] BlogWell Social Media Case Study: Wells Fargo, presented by Tim Collins and Ed
Terpening. Retrieved from http://www.slideshare.net/GasPedal/blogwell-socialmedia-case-study-wells-fargo-presented-by-timcollins-and-ed-terpening-presentation
[9] Cohen,L.S. Social Media Year of Crisis Converts Small-Bank Skeptics, American
Banker, November 10, 2009.
[10] Rothaar,M. Viewpoint: Banks can Overcome the Mullet Hurdle in Social Media,
American Banker, June 17, 2010.
[11]
Social
Medias
Impact
on
Banking.
Retrieved
from
http://www.banking4tomorrow.com/?p=146
[12] Kaplan,A.M., Haenlein,M. (2010). Usersof the world, unite! The challenges and
opportunities of Social Media, Business Horizon, Vol. 53 (1), pp. 59-68.
[13] Smith,N., Wollan,R., Zhou,C (2010). The Social Media Management Handbook.
Accenture, pp: 4, 9, 10.
[14] Social Media Strategy, Policy andGovernance, Ernst &Young, 2012.
[15] Maggiani, R., (2012). Social Media and Its Effecton Communication. Solari
Communication.
[16] Martin H. , Estelle M.,Hugo S., How Social Intelligence Can Guide Decisions, McKinsey,
November 2012.
[17] Zuccaro,C., Savard,M. (2010) "Hybrid segmentation of internet banking
users", International Journal of Bank Marketing, Vol. 28 Iss: 6, pp.448 464.
[18] King, M. R., (2010). Mapping capital and liquidity requirements to bank lending
spreads BIS Working Paper No. 324.
[19] Nyholm, P. (2010): Drligt image plager Danske Bank. Finanswatch, 17 December
2010.
[20] The Banker (2011), The 1000 Bank Rating. Retrieved from www.thebanker.com
[21] http://thefinancialbrand.com/30954/power100-2013-q2-bank-rankings/
[22] http://browse.feedreader.com/c/SEO_Takeaways/392434482
[23] http://www.competia.com/
[24] www.googleplus.com
[25] www.facebook.com
[26] www.linkedin.com
[27] www.twitter.com
[28] www.youtube.com
[29] http://www.chatslang.com/terms/social_media
[30] http://social-media-monitoringreview.toptenreviews.com/
[31] http://www.soravjain.com/50-indian-social-media-and-digital-marketing-agencies-2011
[32] http://socialmedia.wikispaces.com
[33] http://www.information-management.com/
43