Why banking must go social

Dubai - The role of bankers is to make banking more exciting, as we live in a world where commerce and money flow is universally needed

It is often said that 'Banking is boring', and after 3-decades of being a banker, I cannot agree more. The role of bankers is to make banking more exciting, as we live in a world where commerce and money flow is universally needed.
The approach to banking has to change in the face of disruptive forces in the last decade - i.e. advent of new-age technologies, global connectivity, increased travel, access to media, and information availability on the internet - which have deeply changed and affected psychology of how customers' make buying decisions.
Traditional incumbent banks focused their marketing messages on being 'error-free, timely, and competent'. However, this approach has now passed its 'use by' date. It worked when people were less connected, had fewer choices, and having a bank account was considered a rare privilege. The world is now more inclusive, and customers more discerning and empowered to switch fast in a borderless financial system. New breeds of insurgents are rapidly disrupting the status quo using creativity and innovation to move focus away from the 'WHAT' to the 'HOW' - by understanding each individual differently and providing for his/her needs through highly personalised experiences and interactions designed to cater to those individual preferences.
Banks have traditionally lagged on use of technology, and need to learn how to use technology to effectively shape experiences. In the traditional regulated world of banking, the perception of size and safety ruled customer's aspiration and choice. However, in today's 'convergent disruption' era, banks must adopt new-age social media, mobility, big data analytics, and cloud based technologies, to understand customer needs and how to serve them.
In the past, the centre square of a town was the place where people met and networked to form relationships that further led to barter and an efficient flow of commerce and trade. Modern day social networks allow a similar virtual experience where service providers create effective individual relationships as they connect with prospects and customers. The resulting commerce and transactions influence flow of money, thus making the role of banks inevitable. Therefore, banks cannot ignore the relevance of virtual social networks. Banks need to embrace social media as it offers an effective channel, a data source, and a means to communicate customized messages to establish one-to-one relationships. This helps drive predictable, successful, profitable, and sustainable relationships.
The availability of internet, social media channels, mobile phones, and cloud solutions make it possible to access data on-the-go, helping people manage their time more efficiently. Essentially, this has made it possible to 'walk and chew gum together', making it now possible to engender multiple relationships on myriad social media networks which are powered through the rise of mobile phones. While this eliminates the need for real world interaction, it does not reduce the bond one can have with relationships established through such social networks. This provides opportunity for bank marketers to interact with these relationships while analyzing individual behavior, through the use of cognitive neuroscience and computational methods, to intelligently score the massive data on participants on the web. 
Banks gain insight about motivations and behaviors of target participants and can use the findings to establish actionable ethnographic profiles. This deeper understanding helps them design customized strategies to deliver value to customers, enabling deep psychological and often unconscious relationships with the bank's brand, services, products, channels and communications. Therefore, banks today must capture data, employ marketing analytics and cognitive neuroscience experts, and invest in data warehouse and statistical tools in order to mine data to form actionable strategies. Such cognitive experts should be part of the senior management team responsible for shaping the bank's future.
The advent of new mobile technologies has transformed consumer behavior. The consumer is now able to create a more emotional and personalized experience in connecting with a brand. This can be accomplished without external influence - a concept central to the traditional methods of marketing. Banking is a confidential business and now customers can make intensely private decisions without influence from relationship managers or peers. Therefore, social media empowers bank marketers with a pragmatic approach to dig deeper into customer psychology by analyzing data, enabling customised messaging through mobility and cloud-based solutions, enriching customer experience through personalized relationships that encourage an easy-to-adopt experience.
In order to drive success, bank marketers have to lead this change.
The use of social media strategies increases engagement, which results in a rapid customer growth, an increase in cross-sell and up-sell, and enhances loyalty through value based-services. Such services offered to consumer are easily affordable and available at the fingertip, while ensuring high standards of transparency, governance, integrity and fairness. With this, banking can yet again fulfill its image of being a trusted service provider that helps customers stay ahead.
Once banks become more social, who then can yet say that banking is boring!
 
The writer is managing director and chief executive officer of Dunia Group. Views expressed by him are his own and do not reflect the newspaper's policy.