So when was the last time you stepped into a branch of your local bank to do your banking business? I think there are many people out there that will say, “I can’t remember the last time I NEEDED to go to the bank”. So the real question is: Why is this so? Well, for starters, more and more banks, credit unions and financial institutions have created apps for their customers. These apps are so high tech that it virtually eliminates the need for bank customers to ever have to step into a branch to do a transaction. Are you scratching your head yet and trying to remember the last time you were in your bank? Well, take a look at this chart which may help answer some of our questions as to why you haven’t seen the inside the bank lately.
So, as you can see from the chart above, unless you are having some sort of banking issue, there has been a serious decline in the amount of bank transactions that are completed within your banking branches. So if the transaction volume within the branches is declining, then where is it going and more importantly WHY? Well, there are a lot of reasons that can answer this question, and one of them is that people are using their internet banking accounts and their mobile banking apps to complete all different kinds of banking transactions. Another reason that is playing a significant role in the decline of branch transactions is the increase in social media users. Matt Von Hoven shows us the State of Social Media in 5 Charts and one of these charts shows the increase in social media users over the years.
Many of you may now be thinking, “Well, banking and social media are two completely different things. So, how can they be related?” If you are thinking this, you are absolutely correct, but social media is the reason for many changes in the business world; which includes banking. Social media started out as a platform for people to connect in real time, but throughout the years it has become so much more. Social media has taught people to expect real time responses, so when it comes to banking (and many other industries) they have had to change their customer service strategies. The last thing a bank wants is for their customers to be posting their bad experience all over social media for everyone to see. I just plain looks BAD for any company.
Now we know that banks are changing their customer service strategies because of social media, but another way social media has changed the banking industry is in their marketing strategies. It is 2017, so if you are bank or work for bank and you are not using social media as a way to advertise and market the business and its products and services; this is a very good time to start considering it. First, it’s CHEAP! Banks and other companies don’t have to worry about the high costs of developing an ad and paying high ad costs. You can just simple create a post (you might want to add a few flashy colors and things to draw in the customers) and with a simple click of a button, you have sent off some advertising to your customers. Believe me, there are also many tools available to help companies create these flashy posts as well, so don’t worry! Another reason banks might consider social media as a new marketing strategy is because you can reach a lot of people in a short period of time. As we saw earlier, the amount of people using some sort of social media account is growing every year, so if there are so many people using social media, it would be crazy not to use it as a channel to market the business.
Overall, we have found that less and less people are using physical branch locations to conduct their banking business because of the increased use of internet banking accounts and mobile banking applications. We have also found that social media, although it seems like it should have nothing to do with banking, has played a serious role in some major changes in the banking world. Banks have had to change their customer service strategies to better meet the needs of their customers ,and they have also had to change their marketing strategies as well. These are just a few of the changes in the banking industry, amongst the many, that social media has influenced.
So, have you thought about it yet? Have you been banking on the inside or the outside? Stay tuned for my next blog!