Banking sector must learn from NAB social media: Ovum

Banking sector must learn from NAB social media: Ovum

Only 40 per cent of banks plan to use Twitter, according to the analyst firm

Banks have been warned to learn from the National Australia Bank’s (NAB) bold move into social media, embracing related tools to engage with customers.

NAB's ‘Break Up With Your Bank’ social network campaign, launched this week, was a rare move, according to analyst firm Ovum. The campaign began with a Twitter message from the bank's account which led some to speculate whether it was part of a marketing strategy, or whether an employee had accidentally tweeted personal information.

Yet Datamonitor analyst, Harry Senlitonga, said the bold move, which was accompanied by viral marketing videos this week, was an important change to how banks can interact and understand their audience.

“The latest move by National Australia Bank (NAB), through their 'break up' campaign, has shown how banks could utilise social media not just a marketing tool, but also to manage and understand their customers over the social media channel," he said. "The campaign was started through social media channel, before it was slowly built up to a major campaign.”

Ovum's latest report, The impact of social CRM on retail banking, indicated some 60 per cent of the world’s retail banks have no plans to use social media, with only six per cent of retail banks currently using social media for customer queries.

Ovum analyst, Martha Bennett, said that worldwide, banks have an aggressive attitude toward social networking sites.

“This attitude from retail banks towards social media is a major issue in an era of aggressive competition,” Bennett said in a statement.

“The banks without a social media strategy are being short-sighted and are placing themselves in a dangerous and vulnerable position compared to competitors who have realised that social media can and must play an intrinsic role in their business.”

In contrast to NAB, competitor Commonwealth Bank has recently come under fire from unions over its social media policy, which stipulated employees would be punished if they didn't report negative comments about the bank, posted by others on social networks.

Bennett said that banks hesitant to use social media for fear of bombarding customers are failing to understand what their clients want in terms of customer service.

“Consumers are not averse to receiving promotional messages via social media, or using it for customer service enquiries so a massive opportunity to rebuild the confidence in the sector that is so desperately needed is being ignored,” she said.

As well as using social media in a positive way, NAB have also been known to use Twitter to reveal bad news to customers, with the bank last year advising its customers that there were issues with its online banking portal through the social media site.

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