But the use and application of social media data also raises a number of important questions for banks that will need to be carefully considered. So before banks can take full advantage of the data they gather from social media channels, they may want to consider five key questions:
Social media data is largely ‘user generated’ and can therefore be very difficult to validate. As such, many are questioning whether this information represents a true reflection of customer trends, or if it might be biased by planted or augmented information. Banks will therefore need to consider what type of analysis might be needed to verify the actual value of the data and whether it is representative of their customers’ actual lives, demands and feedback.
Given the rising adoption of social media in the banking industry, it seems clear that the data gleaned from these channels will increasingly become commoditized and, over time, may diminish in value. As a result, banks will need to continuously adjust and adapt their analysis mechanisms to achieve increasing levels of depth that will – over the long-term – continue to provide competitive advantage and value to the bank.
For many banks, the sheer volume of data flowing from social media can quickly become unwieldy and difficult to effectively manage. What’s more, by leveraging modern analytical techniques, it is increasingly possible to ‘cut’ the data in such a way as to support almost every possible scenario. Taken in its entirety, this could quickly result in reduced clarity and decision making for banks as the ‘messages’ being delivered by social media data become increasingly contradictory.
Whether intentional or not, social media data can easily be corrupted. In some cases, outside data can be ‘fed in’ to social media channels from other sources such as competitor websites and promotional campaigns. In extreme cases, banks’ social media sites may be hijacked by more nefarious parties seeking to wreak havoc or misinform decision making. This may lead banks to distrust the data they are receiving and ultimately rely more heavily on their own insights, thereby bringing them full cycle back to today’s status quo.
Ownership of social media data is already a critical question for many industries. Indeed, given that the data resides in the public domain, banks may well wonder whether they need to own the data in order to properly conduct and utilize their analysis. And as banks migrate more and more of their communication onto social channels, the question of its ownership could quickly become a much more contentious issue, particularly when applied to banks’ own social media content.
So while social media data certainly promises to deliver massive dividends to banks that are able to capitalize on its insight in the near term, it seems increasingly likely that the issue of social media data will – over time – create a series of new complexities and challenges for banks.