But to gain any real value from social networks, banks must dig deeper. Targeted sales pitches, cross selling of services, effective customer support, even applying CRM capabilities (in my opinion, the Holy Grail of social networking for banks) all require significant changes in banks' technology infrastructure and related processes and controls.
Take customer service for example. When communicating over social networks, customers expect their banks to have a holistic and single view of all of their interactions and accounts. Unfortunately, most banks are structured in silos meaning that a single customer could potentially have data residing within multiple systems and databases – one in the mortgage division, one in retail banking, one in wealth management, and so on.
Integrating all of that data into a single and accessible customer record will not be an easy task for most banks. It will require disparate technology systems to interoperate in real time, sometimes across geographies and distinct technology platforms. In this, ING Group is at a distinct advantage: ever since the launch of ING Direct, we have maintained single customer records in each of our operating countries, putting us in a position to quickly and easily integrate our social networking offerings in each market.
Deploying a CRM system will be much more complicated. Ultimately, social networking enables banks to track key customer information – lifestyle changes, anniversaries, even the general mood of the customer at any given time or day – all of which can be leveraged to deliver more customized and targeted customer interactions. So for example, social networking could alert the bank when a customer gets engaged to be married, opening the door for targeted sales pitches for mortgages, lines of credit or family insurance.
This, however, will require banks to transform the way they collect, analyze and share data across the enterprise. Beyond integrating thousands of data points in real time, the shift to a CRM system will also demand rigorous controls, streamlined processes and effective governance frameworks to ensure that data is being properly managed and secured.
There will also be a number of compartmentalized or discreet projects that will need to be managed. For instance, ING Direct in Canada recently integrated the Facebook API (application programming interface) into their technology environment (becoming, from what I can tell, the first bank to deploy this functionality globally).
Achieving this required our people to rethink many of our security and authentication processes within the bank. Again, ING was fortunate to have pre-existing security mechanisms that enabled us to match Facebook credentials to those held by ING Direct in Canada, meaning we have been able to deploy the system faster and more securely than most.
Of course, the extent of the technology challenge really depends on the aspirations and strategy of each individual bank. But for the ING Group, innovation and value for our customers have always been central to our proposition, making the move to social media a clear necessity for our board, our management, our customers and – importantly – our IT department.
By Saul van Beurden, CIO, ING Retail Banking Direct & International
||Sharat Potukuchi ING's strategy demonstrates that social media is a constantly evolving space and, as a result, banks will need to constantly evolve their strategies – both organizational and technological – to stay on top of the latest trends and opportunities.|
|| Changes to the IT infrastructure driven by the need to have better customer insights, business process integration and data analytics across multiple platforms will be a major hurdle going forward. Furthermore, market dynamics and increased competition from more nimble banks, will demand shorter IT delivery cycles. The banking industry also faces increased pressure from regulators and market analysts to manage risks, governance and compliance; all at the same time. It is therefore recommended to approach these needs through an enterprise wide IT driven business transformation, using a Business and IT architecture as the foundation for change.|
||Yvon Audette Already, we are seeing a number of developments that will likely make the transformation Glenn suggests easier for banks to accomplish. In particular, the growing maturity around Data Analytics and Cloud Computing should enable banks to develop a shared platform that enables a 'single customer view' from their various systems. At the end of the day, success in social media will largely depend on the bank's ability to harness their existing IT systems customer information with public social data (Big Data) to enhance their relationship with the customer.|
||Sanjaya Krishna Banks are at a distinct advantage over other industries when it comes to developing the type of CRM-based social media approach that Saul discusses in this article. Few other industries have access to the depth of information (financial statements, spending patterns, demographics, etc.) that banks enjoy. The challenge will be harnessing all of this data in a way that remains compliant with privacy laws, governance policies and data management regulations.|
|| Saul's article also highlights the importance of involving the CIO in the development and execution of Social Media strategy. All too often, the decision to participate in social media is driven at the Board level or by marketing, with IT brought in to 'operationalize' the strategy. But given the massive scope of involvement that is required of IT (not to mention the invaluable expertise that CIOs bring to the table), it is critical that the technology function be embedded in every step of the planning and execution.|
The views and opinions expressed herein are those of the authors and do not necessarily represent the views and opinions of KPMG International or any KPMG member firm.