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What are the challenges of social media banking?
First it has to be stressed that social networks are centers of interaction and information exchange where people, who can be trusted or not, share very personal things. Banks act in a completely different way. It's a very closed world. Nobody likes to talk about their finances, not even to their friends or family. This is something that happens in all countries including
Do you think the customer is prepared to "lose" some of their privacy for further customization?
I think there should be a reflection by the user and also the social networks on what losing privacy means. Networks provide free services in exchange for access to user data that become products. If you get something free, you are the product because the data you generate are very valuable. The user has to reflect on what this loss of privacy means, I think we need more information for the user to decide whether or not to give his/her data or how much.
In the case of banks, does the customer lose privacy?
The phenomenon is similar in the case of banks. For example, when paying with a credit card the customer profile is enriched with these data. Although banks are historically much more cautious and, unlike social networks, do not take much advantage of the data that can be used to give a more tailored and valuable service. In the case of consumer credit, for example, banks with customer data can offer a lower rate than the generic one. Customers will appreciate this customization and will not feel that their data is being exploited.
With the advent of social networks financial institutions have acted like other companies in other sectors. First we thought we had to be on Facebook, for example, and hence our presence. The second step was to listen to our customers, they let us know what they thought of our products. The third was the interaction with them, people want to talk and we had to give them answers. The problem for financial institutions was to believe that social networks were a means of communication and that was enough. But people act differently in social networks; they don't wait when they ask a question and demand a quick response, banks have to work on interaction with customers.
What role will social networks play to get closer to customers and which of these do you believe are working or will work better?
In social networks emotions are shared in images — all the steps of an experience. In the case of Facebook people share their experience in the network. From arranging to go to dinner, the booking, the dinner itself and they are even demanding a tool to manage paying for the dinner without leaving the Facebook experience. The challenge for banks, however, is not taking existing products and linking them up with more akin social networks; they have to listen to them to offer new products. With respect to users, banks must play an important role in risk management. People are uncomfortable with risk variables and banks should help them in making financial decisions. This information is provided by financial institutions and not found in social networks.
Google and Facebook are companies that financial institutions have to learn from. They have managed to attract customers by giving them something they were demanding: the Google search engine or a tool for interacting with friends in the case of Facebook. They found those needs and have solved them well since they have managed to fill these gaps and communicate with millions of people. Google or Facebook's challenge when entering the financial world is to make payments work just as well as the search engine and that's nothing trivial.
Vis à vis these tech giants banks offer experience. In the case of BBVA, 150 years managing finances. BBVA Wallet, for example, is a product designed to stand up to the technological giants when they fully enter the financial world.
More information on social media banking:
- Social media experts from global banks prefer Twitter
By BBVA Innovation Center