Connect with us

Columns And Opinions

NGARI: Social media offers lenders clues about the changing needs of Gen Z

Published

on



By KARIUKI NGARI

In a world of constant change, banks and financial institutions are continually challenged to keep up with changes in consumer behaviours, evolving channels, and dissipating traditional outlets.

A mounting challenge, and yet the most opportune, in the face of banks and financial institutions: Social media and the ever changing preferences of the Gen Z consumer.

To engage this newly bankable audience, financial services providers are required to undergo an overhaul in targeting strategies, backed by two-way communications and tailored offerings.

Social media represents a valuable frontier that banks and financial institutions must exploit to gain market share with the Millennial and Gen Z demographic. With Millennials having been a bankable audience for a few years, and with Gen Z quickly approaching, it is mission-critical that banks leverage these burgeoning platforms to cement a relationship with their target consumers.

Platforms including Instagram, Facebook and YouTube have seen no shortage of demand from brands across the globe for prime advertising space, but also, and more importantly, the opportunity to engage with their target customers and potential ones.

This trend has only grown over the years, hallmarked by the introduction of popular, up-and-coming platforms, such as TikTok, and the emergence of social media influencers with flocks of dedicated followers.

Advertisement

While similarities between the banking sector and social media may seem limited, several conclusions can be drawn between the two. Chief among these is the very nature of social media, which greatly complements the values that traditional banks and fintechs strive to instil.

The overarching value that is associated with social media, and which serves as the make-up of a majority of these platforms, is that of community.

The same is true for progressive, emerging technologies deployed by banks and financial institutions, such as open banking and omnichannel banking, which are anchored by values of community building and knowledge-sharing.

This paves the way for banks and financial institutions to make genuine connections with their target consumers while raising awareness around their product and service offering.

The opportunities that lie in fostering a social media presence are not limited to marketing and communications.

These platforms also allow consumers to voice their concerns and share constructive feedback on a financial institutions’ products and services, ultimately feeding into one of the main goals of any successful retail bank: Consumer satisfaction.

According to PwC’s Banking 2020 Survey, the use of social media to monitor consumer preferences was among the top areas of significant effort for banks over the next five years.

Traditional banks and fintechs alike have already begun to gain market share in this space. In late 2020, a US-based digital bank partnered with Charli D’Amelio, TikTok’s most followed account with over 100 million followers, to promote the launch of their banking application.

Standard Chartered also recently partnered with social media sensation Burna Boy to host an exclusive virtual concert live across Africa for its customers on the SC Mobile app — a solution that allows consumers to access a variety of financial services from within any social or messaging platform without having to open the banking app.

The two-way functionality of social media also poses a unique opportunity for banks and financial institutions to address consumer concerns and demands through targeted products and services.

A key facet that holds true for the Millennial and Gen Z demographic is personalisation, which, yet again, materialises in their use of social media and increased engagement with personalised content. If banks and financial institutions are to cement a relationship with these consumers, they must then do the same with their product offerings.

This trend does not apply to banks alone and has also been successfully adopted by tech giants, and food and beverage brand staples.

Recent metrics show that Amazon and Netflix respectively derived 35 percent and 60 percent of their sales from hyperpersonalised recommendations, whilst Starbucks’ incremental revenue increased three-fold through hyper-personalised offer redemptions.

It is already evident that customers place a high value on a bank’s ability to embed themselves into their personal lives. In a recent survey of more than 275,000 consumers conducted by KPMG, the study found that a company’s ability to deliver a personalised experience is directly related to their brand loyalty.

What’s more, customers consistently ranked banks with great personalisation capabilities as best-in-class.

The trends shaping the banking industry are one-and-the-same as those that are inherent to social media. This poses significant opportunities for incumbent and insurgent banks and financial institutions to grasp the trust and loyalty of the Millennial and Gen Z consumer, a feat that reaps tremendous benefits, if successful.

Kariuki Ngari is the managing director and chief executive of Standard Chartered Kenya



Source link

Comments

comments

Advertisement
Loading...
Loading...

Facebook

Loading...

Trending

Kenyan Digest