News

While banking customers are still most likely to seek information and advice from friends and family, online information and opinions are rapidly gaining influence.

People are doing their own research and listening to each other more than their banks or financial advisors. According to Ernst & Young's 2012 Global Banking Survey:

• 71% of people seek advice on banking products and services from friends, family or colleagues
• 65% use financial comparison sites to source the best deals
• 44% get banking information from social networking sites

People still value advice and information from people they know

Banking customers place the greatest value on information and advice from sources they personally know and trust. Personal recommendations are the most trusted source of information for banking customers in Australia and are considered even more important in China.

Social media is enhancing people's roles as bank advocates or critics

The use of social media as a source of banking information is strengthening customers' voices and giving them greater influence as advocates or critics. Almost one third of global customers who use social networking sites to interact with their bank also use them to comment on services they have received and to broadcast news about competitive offers. This represents a major change for the industry.

Banks need to change their marketing strategies to reflect the influence of social media

The influence of direct selling is fading and banks need to respond with more creative marketing strategies. With the growing importance of word of mouth, marketing strategies need to change from push to pull and banks should aim to recruit and retain satisfied customers as their advocates. Some banks are already starting to recruit satisfied online affinity groups as promoters by giving them the flexibility to select and mould the communications they receive.

Financial comparison websites are gaining traction

Financial comparison websites were relatively unheard of five years ago, but now they are encouraging customers to take banking related research into their own hands. They play a crucial role in customers' growing need to seek out the best deals, search for new products and services, or help them decide whether to switch to a new bank. Banks need to make their information and advice more innovative and persuasive to target the new age of self-sufficient customers.

People are also using social networks to make transactions

The number of customers also using social media to interact with their banks is on the rise. Although seeking information remains the main banking activity that customers undertake via social networks, in some markets a growing number of customers are also conducting transactions this way. According to Ernst & Young's 2012 Global Banking Survey, 81% of Chinese customers use social networks to find out more about banking products and services, 73% to access their accounts, and 70% to comment on services they have received.