Academic journal article Journal of Economic and Social Development

Social Media Usage in Banking Industry and Its Managerial View: Case Study for Mexican Banking System

Academic journal article Journal of Economic and Social Development

Social Media Usage in Banking Industry and Its Managerial View: Case Study for Mexican Banking System

Article excerpt

1. Introduction

New technologies based on the Internet, World Wide Web and wireless communications have changed the business world in 20th century. Being a basic platform of worldwide electronic business, the Internet has emerged as the world's major distribution channel for goods and services, the easiest and cheapest way for communication and interaction.

Social media is almost an endless source and an important tool for communication. It has radically impacted today business world. And todays customers have proved this fact. Social media is influencing customers' financial decisions. The traditional world of mouth has been changed in social media world of mouth. Thus banking management needs to identify ways to make profitable use of social media. By developing presence in social media banks will be closer to customers. We believe that the fastest way to grow a business entity is through social media and networking. Thus social media and its current usage in banking are discussion topic of our paper. It presents the managerial view concerning to social media usage in Mexican banks, its barriers and challenges. Based on statistics and researches in social media area, we present a set of hypothesis and test them in Mexican banks by doing survey among managers, directors and social media representatives in Mexican banks.

2. Social media challege in global economy and its added value for banking industry

The communication ways and methods have been changed, nowadays banks have to be more communicative, more customer-centric and innovative. Social media is a result of these changes and it has a crucial influence on todays business world. Here is presented the theoretical research concorning our topic. As we know, the last two decades have seen multiple visions for "banking in the future" (Gates, 1995) that comprehended banking from a customer perspective. Alt & Puschmann (2012) supposed that four drivers have become fairly prevalent causing a stronger transformation in the forthcoming years: the financial crises, the changing behavior of banking customers, the pace of diffusing innovative downstream IT-solutions, and the emergence of non-banks. All these have direct or indirect connection with social media phenomenon. Indeed in few years social media showed an explosive growth and established itself as "the media of choice all across the world". (Hun, 2010).

Ernst & Young (2012) in "Global banking outlook: 2013 -14" based on their global research advises that banks need to develop new business models and implement new operating models, because customers "disturbing the status quo - they continue to need banking services but are starting to look beyond banks to alternative providers". "A major overhaul of the organization will be needed to adapt to the new environment".

The rapid success of social media has left corporations "in the dust" as they seek to promote their products on these platforms, develop strategies and policies, and fill newly created social media-related positions with qualified individuals (Kelly, 2010).

King (Bank 3, 2013) told that there has never been a new media type that has such a deep impact on business messaging and dialogue in such a short period of time - ever. When we put it in that light, there are many banks that should have been taking social media far more seriously for quite some time already. But perhaps those banks are waiting for the crash, the dot-bomb of social media.

Jenkins (2006) described the contemporary media landscape as being innovative, convergent, every day, appropriative, networked, global, generational and unequal. Gharibi (2013) pointed out that a crucial element to ensure social media success is to have executive level support for enabling and encouraging experimenting and learning. This makes it easier to "stick with it" since it takes substantial commitment, time, and resources to be successful in social media. Murdough (2009) emphasized that firms try to realize their aims through social media. …

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