Ever thought that your friend list on Facebook can determine if you get a loan or not? Singapore- based Lenddo and China’s Tencent analyze data from applicants’ social media accounts such as who their friends are, how often they interact and what their interests are to produce a score for approving a loan.

Customers are spending increasing amounts of their lives on social media, making it necessary for banks to be on social media platforms. By 2018, the number of active social media users globally is expected to reach 2.4 billion. Regardless of whether your bank is active online or not, chances are that somewhere a customer is tweeting or posting about their experience with the bank. Proactive bank teams use this information to seek quick and efficient solutions that serve the customer better. There was a time when a locked suggestion box discreetly displayed in a branch was expected to perform the same role. Today, open communication with the community allows banks to create social capital and be perceived as friendly and approachable. Emirates NBD received (and resolved) more than 5,000 customer issues via social media in 2016.

The customer in charge

Consumers are much more involved in their banking journey now than they used to be. No longer are they prepared to be lectured on savings and loans with terse monthly communiqués. They are part of the brand, showing their involvement via “likes” and “thumbs ups”, and coming up with ways to improve service. However, several banks are social media newbies and use social media only to generate sales leads. According to a recent research, only 25 per cent of US banks said they had been using social media for five years or more.

Early entrants have realized that an effectively managed social media strategy can turn into a rewarding relationship for both the bank and the customer in many ways. For one, it allows consumers to interact with brands in a way that is relevant to them instead of being served mass mails. It could be as simple as opening a new salary account when you change a job, without having to approach the bank, because the bank is active on LinkedIn just as you are. Or to enable sending money to a friend through WhatsApp; or partner with retailers to enable purchase of the dress your favourite celebrity sported on Instagram.

Soon, it could be possible to pay for your meal via your social media account while you post a picture of that delectable cheesecake. You could take a photo of a car that you like and ask a virtual assistant on Facebook to help arrange a quick auto loan. By the time you reach the showroom, the bank would have assessed your credit score and you can drive out in your new car.

Integrating offline and online lives

Social media teams in banks often talk about how they are unable to implement a strategy for more than six months because technology is evolving so fast. The solution in some cases is to partner with leading players – be it Google, Twitter, LinkedIn or Snapchat – allowing a bank to be the beta-testing ground for path-breaking innovation served in ways uniquely relevant to that audience in that place and time. Banks in small towns are gathering fans and followers via supporting local businesses at community events, enabling donations to deserving sportspersons and by organizing blood donation drives, stepping up their “social” profile and presence.

Social media is becoming increasingly powerful locally too. Ramadan? Let’s give consumers the convenience to donate to their favourite charities via Facebook. National Day? Let’s release a geo-filter on Snapchat allowing proud UAE users to display their love for the country as they stroll down Box Park or Kite Beach. Financial literacy? YouTube is a powerful medium to simplify products and services for customers through simple How To videos. Emirates NBD has over 80 short tutorial videos on their You Tube channel, explaining topics from how to activate a card to how to prepay a mortgage.

So, if someone asks why social media is necessary for banking today, the answer is simple. It’s quick, direct and relevant. It’s interactive, efficient and cost-effective. And it helps banks and customers understand each other like never before. What’s not to Like?!

Suvo Sarkar, Senior Executive Vice President and Group Head – Retail Banking & Wealth Management, Emirates NBD