Social media has literally taken over almost every aspect of our life. There is not a day that goes by when we are not asked to “like, “post or “retweet” something. There has been a significant shift in every industry like education, tech, and even banking to make social media a part of their business strategy.
As technology becomes more and more advanced, so do the social media outlets. Providing more capabilities to stay connected than ever before, social media users want the companies they deal with, including their banks, to be able to connect with them on all levels. Research shows 65% of Americans use one or more social media platforms and that number is set to rise each year.
Banks are eager to give their consumers what they want especially the millennials who now make up 83.1% of the nation’s population surpassing the baby boomers. However, security experts want all financial institutions to be mindful of the security risk before diving head first in the social world, and here are a few reasons why.
The banking industry takes their moral and ethical obligation to keep its customers and their organizations safe very seriously. Being part of the social media club comes with risks. Security, privacy and compliance are major concerns for the financial sector and banks need to ensure they are meeting all regulatory requirements. Another reason why many are hesitant about the social media phenomenon is the potential of having data corrupted. It is very possible to have a social media page hijacked by cyber criminals and that can have lasting, damaging effects on a bank. Also over sharing information can be an issue. There have been many examples of employees divulging important information to the public causing speculation that sometimes resulted in loss of revenue and customers.
Overall, banks and financial institutions have done a good job to try and meet their customers half way by having a presence on social media. But not allowing transactions and account information availability on these sites is where a line is drawn in the sand. Instead, banks and the financial industry have been able to use the social media tools to their benefit by educating customers about their products, reaching out to prospective new customers in real time and even analyzing competitors. The value of social media is undeniably a great and important asset which gives the banking industry an in-depth look at what their customers think and want, inevitably allowing them to make improvements and gain public trust.
The impact of social media on banking is huge and the trend is not going anywhere. However, security still remains a top priority. All industries will have to continue to balance customer’s need for instant access on social media while also enforcing regulatory requirements that were designed to protect consumers and the organizations.