Social Networking and Gen Y:

Financial Institutions

Lester Chen, Jenn Weber, Matt Naber,

Ellie Weed, Ed Revis, Danny Solarz,

Gabbi LeVert, Candace Carson

1

General Overview• Brand Interactions

• Trends

• Survey Findings

• Case Studies

– Successes

– Failures

• The future of online banking

– Cyber crime

– Mobile adoption

– Fully digital banking

• Video

2

By 2014 , nearly two-

thirds of all Internet

users, or 164.9

million people, will be

regular users of

social networks

3

72% of 18-29 year

olds already use

social networking

sites

4

71% Facebook

66% MySpace

7% LinkedIn

5

So Facebook is

kind of a big deal.

6

What kinds of

companies are

people following on

Facebook?

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8

Financial

institutions aren‟t

the most interesting

companies to

follow. (no surprise)

9

How can banks do a

better job

“socializing” with

their customers?

10

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“Online social networks are

most useful when they address

real failures in the operation of

offline networks.”

12

Nicolet National Bank: Improving Transparency

Used social media to become more transparent

-The President of their bank answers questions directly on

the company blog

Mortgage questions

Business loan queries

General finance questions

-Addressed their thoughts on the Troubled Asset Relief

Program (TARP), where money has gone, and why their

bank has participated.

13

Social Media Demographics by Income Level

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CASE STUDIES

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Stagecoach Island•Similar to Sims virtual world in 2005•Uses Second Life game engine

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Players create an avatar and interact with their world

Players have a virtual banking account, can apply for loans, mortages, etc.

Aimed at youth, teaching them important budgeting skills while also

connecting and socializing with others

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•By February 2009,

had roughly 2 million

mobile app users

•Only 4 million mobile

banking app users in

the country at the time,

•BoA had roughly

half of the market

Mobile Banking application

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More than 40% of active mobile bankers used iPhone or Ipod Touch

BoA believed the mobile channel was driving new business to their bank

because 8-10% of mobile bankers had opened up an account in past 90 days

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Mobile checking deposit

Customers take a picture of the front of a check with their phone

and send the info to Chase

The bank will confirm that they have received the information and

make the deposit

Customers can then shred the check

Some customers are very satisfied with new feature, while others

complain the feature still is buggy

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Bank of the FutureFeatured in the Wall Street Journal on June 30, 2010

Features are already up and running in Japan and parts of

Asia, and the bank says customers love the new additions

“Tap and Pay” is a new mobile app that will transform your phone

into a mobile wallet; customers will add their credit card info to

their phone, and when in physical stores the customers can just

tap the machine with their phone

Transaction is recorded, with a receipt and warranty sent to phone

25

Interactive Media Wall

“Sales Wall” - Customers can flip through products on large touch

screen that resembles iPhone. Customers can then apply for the

product right on the screen or scan the information to their phone

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“Work Bench”

Video agent can talk customers through transactions and

give them personal, real-time service

Service will be in U.S. banks in the next 2 years

“Citishopper” is an app that gives consumers product

reviews, the best price in the area, and whether or not the

product is in stock

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Is smarter banking

better banking?

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If so, what role do

social networks

need to take on?

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FACT: People don’t want to

share their personal

banking information

with the world

But everyone needs some

advice every now and then…

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Small Business Online Community

32

Connect, connect, connect

33

Tips

Find Experts

Share Business Stories

Events

Articles

Forums

Expand customers‟ relationships with your bank

without violating the their sense of security

Because let‟s face it, banks are not the most

trusted institutions in America right now

34

Taking your offline

onlinecommunity

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• “Mobank” has only three branches where people are highly

invested in their community

• Not using social media to “sell” anything, but rather using it to

build stronger ties with their customers.

“Being a Mobank customer is very

much like being part of the „in‟ group.”Grant Burcham,

Missouri Bank President and CEO.

36

People hated talking to

Customer service

37

But not anymore.

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Promote services

Create awarenessResponses, quick responses

Little questions

40

41

42

21%

79%

Seen an ad for a bank on social media

Yes

No

12%

15%

73%

Yes

No

Don't Know

Does your bank have its own

social media website?

Survey Says (n=47)

43

Where are social

networks headed?

44

F acebook‟s recent policy changes are merely the

latest in a long list of transgressions against user‟s

privacy

The “Like” Button: Allows Facebook information to be

more easily shared. BUT – it has also made public its

“social graph”, which allows outside websites able to

access info about users freely.

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Cybercrime

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80% of U.S.

households have come

to do their banking over

the Internet

47

A 2009 ABA survey of 170 U.S. bank

revealed that 85% of big banks are

incurring losses stemming from cyber

attacks on consumer online accounts

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Most frequently attacked banks in the world

3rd

7th

ranked

ranked

49

And this is what

Chicago thinks

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Thank for watching!