Banks Eschew Social Media
A new report said that the majority of the world’s retail banks have no plans to use social media in any way.
Ovum, the technology arm of London-based Datamonitor, said its research found that 6% of retail banks internationally use social media to deal with customer queries and only 1% more plan to add that function this year or next.
The study found that 14% currently use social media for marketing, with another 12% planning to do so by the end of 2012.
Fully 60% said they have no plans to use social media in any way.
"We feel that this attitude from retail banks toward social media is a major issue in an era of aggressive competition," said Ovum analyst Martha Bennett.
"The banks without a social media strategy are being shortsighted and are placing themselves in a dangerous and vulnerable position compared to competitors who have realized that social media can and must play an intrinsic role in their business," Bennett said.
She cited three U.S. banks–Citi, Bank of America and Wells Fargo–for their use of the channel, adding that they and the U.K.’s First Direct and Rabobank in the Netherlands "are still feeling their way and their strategy is very much a work in progress."
Bennett added, "These banks have been justifiably held up as industry leaders for their use of social media, however there is not universal acceptance that social media is either important or suitable for retail banks."
She concluded, "Consumers are not averse to receiving promotional messages via social media or using it for customer service inquiries, so a massive opportunity to rebuild the confidence in the sector that is so desperately needed is being ignored."
Ovum conducts 400,000 interviews a year with technology and telecom decision makers.