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Thursday, 04 November 2010 16:23

Australian banks struggle with social media


Australian banks may well grasp the importance of mobile banking, with most now offering smartphone apps (St George last week becoming the first local to unveil an Android app) but they are still in the sandpit when it comes to social networks. It's ironic in a week when social networks have been flooded with negative sentiment about the banks' perceived profit grab.

Delegates at the 5th Future of Banking and Financial Services conference organised by FST Media today heard from a range of banking executives, all struggling to make sense of social networks. In a keynote address St George Bank ceo Rob Chapman, said that the bank had recently taken its 'first steps in social media' by running a Facebook campaign and opening a Twitter account.

Mr Chapman acknowledged however that it was early days and the bank didn't have many Twitter followers yet. In fact at time of writing the bank had 48 tweets to its name and 213 followers, but wasn't following anyone.

Mr Chapman summed up the sentiment of most bank executives at the conference by noting; 'It's important to our customers so we want to be there.'

What to do when you are there remains the challenge for banks.

As BankWest chief information officer Andy Weir noted; 'Whilst traction is being generated, no-one has cracked how they can leverage social networks.' Nevertheless he believes it is a question of 'when rather than if.'

Mr Weir added that 'One reason why financial services are struggling a little bit is that customers want security, comfort and confidence. But they want us to innovate and that is the paradox.'

For some financial organisations, such as the internet only brand UBank which NAB opened for business in 2009, social media is considered a very important marketing tool. According to Susan Kidd, the bank's business engagement partner; 'It is about the interactions between customers and whether they come to UBank.'

UBank has just over 3000 followers on Twitter, and is following a similar number. It also seems to have worked out how to use the network as more than an online corkboard, which has been St George's approach to date, by interacting with followers and keeping a close eye on sentiment.

Taking the next step may be more of a challenge. As Westpac's Randy Fennel, general manager of engineering and sustainability, technology noted; 'Using social media for awareness is one thing - for advice another.'

According to Aman Narain, the group head of remote banking for Standard Chartered Bank; 'Traditionally people went to branches to get their advice. Now people go to the internet and social media.

'The challenge for banks is to get the balance right. We have to manage confidentiality.'

But he believed that there was a real risk for banks which did not experiment with social networks, and keep a close eye on the sentiments raised there. He said that already in Asia regulators were monitoring social networks, and had in some cases taken action based on commentary which had appeared in posts.


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