I am also convinced that banks will need to adopt social media in some form or other in order to stay competitive in the marketplace and remain relevant to their customers.
However, at Westpac, we are taking a measured yet active approach to social media. The Westpac Group in Australia includes individually branded retail banks and a wealth management business, each of which serves a unique customer segment and geography, and which are now brought together under a single business called Australian Financial Services. We recognized early on that it would be important for each of the brands to develop their own social media strategy in a way that made the most sense to their particular business.
As a result, the Westpac Group’s businesses have each been active in their own way. Our Westpac Retail and Business Banking division has been the fastest adopter, and now engages with customers on Facebook, Twitter (@westpac), YouTube, LinkedIn and Ruby Connection (an Australian social network for women in business). Westpac New Zealand, Bank of Melbourne, St George, BankSA and BT are also getting into the game.
But our approach has also been measured. Right from the start, we wanted to cut away the hype of social media and look at the real opportunities, risks and resources that would be required to not just participate in social networking, but to get it right. Working with KPMG, we identified nine distinct areas of opportunity and developed realistic budgets and resource requirements to fulfil them.
This will allow our executive team and individual businesses to make educated and informed decisions about the risks and rewards of pursuing a social networking strategy.
Taking a measured approach also allows us to identify all of the key interdependencies and then carefully plan and prepare for the changes that will be needed to enable our strategy. Culture, processes, controls, technology and governance will all be affected by social networking and each takes careful planning to transform.
Some of our competitors particularly outside Australia have attempted to seize a first-mover advantage on social networking. Our approach has been to build a strategic roadmap for the future, and take the opportunity to learn from our own first steps as well as those of our more ‘experimental’ peers.
Those that have been in the banking business for a while will draw certain parallels to the adoption of the internet. At first, companies were pouring buckets of money into deploying all sorts of online gadgets but – without a clear roadmap or significant customer demand – most eventually found that they had wasted much of their early investments. In hindsight, those that saw the best return were the ones that had taken a measured yet active approach.
By David Bell, General Manager, Corporate Affairs & Sustainability, The Westpac Group
|| As David points out, social media – done right – will drive significant change throughout the banking organization in areas such as culture, process and governance. There are certainly imperatives to ‘get out there’ as quickly as possible (first mover advantage, ability to respond, innovation dividends, product ideation, etc.). However, the social media agenda must be built holistically as part of the banks strategic operating model. I agree that those who engage without a strategy will ultimately struggle to realize any measurable benefits from their social media activities. |
|| By allowing each of their brands to develop their own social media presence, Westpac is recognizing that different divisions target different market segments. For most multi-brand banks, this is a smart approach as the tone of voice that works for your mobile banking clients is not necessarily appropriate for your high net worth clients. That said, ensuring that the bank develops an overarching governance and use policy is critical to ensuring that accountability and compliance are maintained. |
||Marty Carroll @Harry – I agree wholeheartedly. But let’s not forget the cost efficiencies that can also be gained by considering the holistic needs of the organization in terms of resourcing and budgets. So while each brand may have a different strategy, executives should seek to share services where possible and pool resources to make the most of their strategy without adding incremental costs… something that Westpac seems to have clearly understood. |
|| Agreed. It is also clear that banks are facing a new customer that is financially challenged, more informed than ever, less trusting of big institutions and that values sustainability. These factors combined will require banks to focus on embracing this new customer and offer a different and innovative experience. And in order to provide a consistent customer experience, the bank will need to adapt its operating model accordingly, typically requiring it to review and redesign its Target Operating Model or Business Architecture. |
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.