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Industry News Consumers who use social media are more engaged 2010-12-08 Social media has been adopted by both consumers and businesses as a way to reach out and connect with people. Now, an increasing number of financial institutions are adopting this channel to improve customer loyalty efforts and, according to a recent survey, this may be happening just in time. Fiserv, a provider of financial services technology solutions, surveyed 3,000 U.S. consumers to discover their level of interest in connecting with financial institutions via social media channels. Currently, only 11 percent of consumers are connected to their financial institutions through a social site, the survey found. However, more than one-third - 36 percent - are interested in this channel, with interest highest among Generation Y consumers at 45 percent. "There is clearly a sizable segment of consumers who are interested in interacting with their financial institutions through social sites," said Geoff Knapp, vice president of online banking and consumer insights for Fiserv. "An active, engaging online social media presence is a viable way to maintain and grow valuable relationships with consumers who are visiting branches less and interacting through digital channels more." Consumers are primarily using these channels for informational and relational activities, with 66 percent reporting that they use their financial institutions' social sites to receive information about services. An additional 32 percent receive information concerning offers and promotions, followed by 31 percent who review other consumers' opinions, advice or complaints and 30 percent who conduct customer service inquiries. The benefits of this channel shouldn't be undersold, either. According to the survey, consumers who are connected to their financial institutions via social media are generally more engaged than those who aren't. In fact, consumers who are connected through this channel use an average of 5.4 banking services, compared to customers who have little to no connection and use only 4.3. Furthermore, consumers who engage with their FIs' social sites tend to use online banking and bill payment services more. However, before FIs will be able to benefit from these trends, they will need to overcome one barrier: lack of awareness. Thirty-one percent of consumers cited a lack of awareness as one of the primary reasons they had not connected with their FIs through a social site. Especially in the new economic atmosphere, customer retention techniques such as social media are even more important. A recent report from the Retail Banking Advisory Council supports the Fiserv survey's results and advocates for FIs to optimize the online experience.
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