The downstream impact of social media on operational activities
There is a real groundswell building behind the use of social media in the financial services sector; a trickle of interest 12 months ago is fast becoming a raging torrent today, as institutions realize there is value to be gained from adopting this new communications channel. Social media’s ease of use (for both consumers and enterprises) is undoubtedly one of its virtues, but this simplicity has the ability to cause a detrimental impact on any related operational infrastructure. In developing their customer interaction strategies, institutions must remain acutely aware of the effects that social media has on existing activities.
Social media is for life, not just for Christmas
There is no ignoring the phenomenon of social media. Its inherently viral nature has resulted in widespread, rapid adoption by consumers across a broad demographic spectrum, and there are currently no signs of this massive exponential growth decelerating. It is entirely unsurprising that financial services institutions are looking to exploit social media for their own commercial and operational benefits, and Ovum believes that banks and insurers are giving extensive consideration as to what their tactical and strategic plans should be. “We know we should be doing something, but we just don’t know exactly what that something should be” is a sentence we hear often during our conversations with institutions.
However, for all social media’s attractiveness, such as its ease of use and device agnosticism, it also brings inherent operational demands. It might be the new kid in the interaction playground, but that doesn’t mean that established management practices can be abandoned or overlooked simply because social media is perceived as being “different” to channels that have come before it.
From a customer interaction perspective, social media requires constant monitoring and engagement, underpinned by processes that must be robust yet flexible enough to adapt to the fast-changing nature of the channel (the 1 billion users rapidly gathered by Facebook is offset by the fast-fading glory of sites such as MySpace and Second Life) without exposing an institution to unwanted risks.
Institutions must also remember to always strike the right note when they’re engaging with customers through social media. It is all too easy to lapse into informality – or indeed over-familiarity – in a 140-characters-or-less response to an enquiry via a micro-blog such as Twitter, whose format dictates that brevity is the order of the day. Conversely, those consumers who are comfortable and regular users of social media will immediately detect insincerity or pillory a company for trying to be part of the “in” crowd. Institutions must therefore tread a careful path and ensure their tone of voice is appropriate for the conversation they engage in via social media.
Institutions must consider any downstream IT impacts
Social media also has a downstream impact on IT infrastructure, and institutions must consider the integration required with existing technology. A pertinent example is a CRM system. If a customer contacts a bank or insurer via social media, there needs to be a record created for this interaction, in much the same way as noting an inbound enquiry to a contact center. This becomes particularly important if a query is handled across different channels: what started as a tweet, for example, could become a telephone-based conversation before ending with the original “tweeter” in branch dealing with a specialist advisor. Ensuring the enquiry can be tracked from end to end is paramount if institutions wish to deliver the excellent customer experience they’ve been promising for the last decade. Social media must therefore be blended seamlessly into existing infrastructure and processes. Moreover, any “input” into a CRM system has a natural “output” into a business intelligence solution. Institutions implementing a social media strategy should also consider how they will use the interaction data that is gathered, being mindful that social media can easily create data deluge that will need careful mining and analysis (as well as adequate storage space in the corporate warehouse).
Finally, it is impossible to talk about technology used in financial services without acknowledging the security aspect. In the short term, institutions will need to perform careful triage in order to maintain security without stifling the opportunity to use social media externally and internally. It is, of course, a nascent technology, but we firmly believe institutions will benefit from it.
With Thanks to Ovum