Social networks still experimental for banks
In a week which has seen social networks ablaze with negative consumer commentary about a perceived profits grab by the big banks, Australia's leading financial organisations have admitted they struggle to make sense of how to harness the likes of Facebook and Twitter.
Speaking at the 5th Future of Banking and Financial Services conference, organised by FST Media, BankWest chief information officer Andy Weir said: "Whilst traction is being generated, no-one has cracked how they can leverage social networks." It is, however, a question of "when rather than if", he said.
"One reason why financial services are struggling a little bit is that customers want security, comfort and confidence. But they want us to innovate and that is the paradox," said Weir.
The idea of sharing confidential customer information on social networks was anathema to all speakers. Peter Dalton, group general manager of innovation at ANZ, also stressed that no clear model had yet emerged as to how banks could make use of social networks. "A lot of social media is just that - social," he argued.
For online banking brands however, social networks are important marketing conduits.
According to Susan Kidd, business engagement partner for NAB's UBank, social network commentary could determine whether or not customers come to UBank.
The stakes can be high: research conducted last year found that almost one in four Australians would boycott a service if they read negative comments about it on a social network.
UBank, which launched its online account last year, is active on Twitter, with over 3,000 followers with whom it interacts using the network.
By comparison, St George Bank, which has only recently taken its first steps into the social media world, according to CEO Rob Chapman, has just 213 Twitter followers and mostly tweets about events or financial news.
It has also recently conducted its first Facebook campaign. According to Chapman, although it's early days, "it's important to our customers, so we want to be there."
Aman Narain, group head of remote banking for Standard Chartered Bank, explained that banks could not afford to ignore the phenomenon of social networks as there was a shift underway in terms of how people sought financial information: "Traditionally, people went to branches to get their advice. Now people go to the internet and social media.
"The challenge for banks is to get the balance right. We have to manage confidentiality."
Narain warned that there was a real risk for banks which did not keep a close eye on issues raised on social networks.
He said that already in Asia regulators were monitoring the internet, and had, in some cases, taken action based on commentary which had appeared on social networks.