Opportunities to leverage TikTok and the social media renaissance
Through Kariuki ngari, Acting Head of Retail Banking, Standard Chartered AME, and Managing Director and CEO, Standard Chartered Kenya
To engage this newly bankable audience, financial service providers need to overhaul targeting strategies, supported by two-way communications and tailored offers.
In an ever-changing world, banks and financial institutions (FIs) are constantly challenged to keep up with changing consumer behaviors, changing channels and the dissipation of traditional opportunities. Social media is a growing, yet most timely, challenge facing banks and financial institutions, along with the ever-changing preferences of Generation Z (Generation Z) consumers. To engage this newly bankable audience, financial service providers need to overhaul targeting strategies, supported by two-way communications and tailored offers.
Social media platforms represent valuable frontiers that banks and financial institutions must exploit to gain market share with the Millennials and Gen Z population. Millennials have been a bankable audience for a few years and Generation With Z approaching rapidly, it is essential that banks leverage these burgeoning platforms to solidify new relationships with their target consumers.
Platforms such as Instagram, Facebook and YouTube have not lacked in demand from brands around the world for top-notch advertising space, but also, and more importantly, opportunities to interact with their customers. target customers and new potentials. This trend has only grown over the years, marked by the introduction of popular and promising platforms, such as TikTok, and the emergence of social media influencers with floods of dedicated followers.
While the similarities between banking and social media may seem limited, there are several comparisons that can be made between the two. Chief among these is the very nature of social media, which largely complements the values that traditional banks and fintechs (FinTech companies) strive to instill. The primary value associated with social media, and which constitutes the makeup of the majority of these platforms, is that of the community. The same goes for emerging and progressive technologies deployed by banks and FIs, such as open banking and omnichannel banking, which are rooted in the values of community building and knowledge sharing. This paves the way for banks and FIs to establish genuine links with their target consumers while making them aware of their product and service offerings. A sense of community and trust also plays a vital role in the way banks communicate with consumers through these platforms, in which transparency, humanity and sincerity are relevant.
Likewise, the spirit of collaboration fostered on social media platforms, in which partnerships and sponsorships with global brands are prevalent, matches the shift in the banking industry towards more cooperative efforts. These collaborations accelerate the rate of innovation observed in the sector and result in the introduction of transformative technologies. Standard Chartered’s strategic collaboration with Airtel Africa, a leading provider of telecommunications and mobile money services, is a prime example, to provide customers with increased access to mobile financial services.
The digital appeal of social media to Millennial and Gen Z consumers has also translated into an increased appetite for digital financial solutions and, more importantly, the accessibility and functionality inherent in those solutions. Coupled with the restrictions of the COVID-19 pandemic, the digital reader is even more apparent. According to a recent Accenture study, 50% of consumers now interact with their banks through mobile apps or websites at least once a week, up from 32% two years ago.1
Regions with an inherently young and digitally savvy population, such as Africa, have tremendous potential to captivate the next generation of banking consumers. The sub-Saharan region alone is responsible for over 45% of the world’s mobile money payments, with transactions valued at around US $ 456 billion in 2019.
At Standard Chartered, we have capitalized on this trend in Africa as we sought to meet the needs of the young and informed population of the continent with our digital banking and the subsequent introduction of SC Keyboard, a solution that enables consumers to access to a variety of financial services. from any social or messaging platform without having to open the banking app.
The opportunities of promoting a social media presence aren’t limited to marketing and communications. These platforms also allow consumers to voice concerns and share constructive feedback about an FI’s products and services, ultimately fueling one of the primary goals of any successful retail bank: customer satisfaction. consumers. According to PwC (PricewaterhouseCoopers) Banking 2020 survey, using social media to monitor consumer preferences would be one of the major areas of significant effort for banks over the next five years.2
Traditional banks and fintechs have already started to gain market share in this area. In late 2020, a US-based digital bank partnered with Charli D’Amelio, TikTok’s most-followed account with over 100 million subscribers, to promote the launch of their banking app. Standard Chartered also recently partnered with social media sensation Burna Boy to host an exclusive live virtual concert across Africa for its clients on the SC mobile app.
The two-way functionality of social media also offers banks and FIs a unique opportunity to respond to consumer concerns and demands through targeted products and services. The wealth of data and information available on social media also allows banks and FIs to tap into specific weak spots and identify growth margins, provided directly by their current and potential consumers.
Personalization, which, again, materializes in their use of social media and increased engagement with personalized content is a key aspect that holds true for the Millennial and Gen Z population. If banks and FIs want to consolidate their relationships with these consumers, they must do the same with their product offerings. the PwC Banking 2020 survey showed that allowing customers to expand choice in configuring product features, including pricing, was also a top priority for banks over the next five years.3
Another area where Standard Chartered has capitalized on the boom in social media is the launch of nexus, a proprietary bank as a service (BaaS) solution. Thanks to the nexus, digital platforms and ecosystems such as e-commerce, social media or ridesharing companies will be able to offer loans, credit cards and savings accounts – co-created with the bank – to their customers. under their own brand.
This trend doesn’t just apply to banks and has also been successfully embraced by tech giants and F&B (food and beverage) brands. Recent statistics show that Amazon and Netflix made 35% and 60% of their sales, respectively, from hyper-personalized recommendations, while Starbucks’ incremental revenue tripled from hyper-personalized offer exchanges.4
It is already evident that customers place a high value on a bank’s ability to fit into their personal lives. A recent poll of more than 275,000 consumers conducted by KPMG, a company’s ability to deliver a personalized experience is directly linked to its brand loyalty. Additionally, customers consistently rated banks with excellent personalization capabilities as the best in their class.
The trends shaping the banking industry are the same as those inherent in social media. A greater focus on personalization, accessible solutions, and relevance to the online community offers both incumbent and insurgent banks and FIs significant opportunities to capture the trust and loyalty of Millennial and Gen Z consumers, a feat that will yield huge benefits if successful.
1 Accenture: “Banking Consumer Study: Making digital more human”, Alan McIntyre, Edwin Van der Ouderaa, Peter Kirk, Anne Bertelsen and Kieran White, December 8, 2020. (https://www.accenture.com/ae-en/insights/banking/consumer-study-making-digital-banking-more-human)
2 PwC: “Retail banking 2020: evolution or revolution?” (https://www.pwc.com/gx/en/banking-capital-markets/banking-2020/assets/pwc-retail-banking-2020-evolution-or-revolution.pdf)
4 Deloitte: “The Future of Retail Banking: The Imperative of Hyperpersonalization”, November 2020. (https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/financial-services/deloitte-uk-hp-the-future-of-retail-banking.pdf)