Impact of Social Media on the Financial Services Industry:
In today’s age everyone is well aware of the significant impact that social media has had on our lives in the way we communicate, socialise, conduct business and view the world. This case study however, will attempt to narrow the scope of this theme, by looking specifically at the way in which social media has influenced the financial services industry.
The evolution of social media has facilitated a change in the nature of the relationship between institutions and consumers within the financial services sector. Not all of these changes have, however, had a positive effect on financial institutions. Media convergence and the ...view middle of the document...
When these mortgage loans failed, not only did the housing marketing collapse, but the entire US economy. The video below highlights this speech.
Peter Schiff is just one of many individuals using social media in order to help spread awareness of the dangerous activities of banks and what the average person can do to help minimize their own personal financial risk.
Another impact that social media has had on the financial services industry has been through the provision of new financial services, as well as a change in the way in which marketing is performed by financial institutions. With the popularity of Facebook rapidly rising in the last decade, more and more online apps and services offer the option to create an account using your existing Facebook account. For example, when signing up to Storify in order to publish this case study, I was given the option to sign up using my Facebook account (Storify, 2016). Thus it should not come as too much of a surprise when the Turkish bank ‘DenizBank’ decided to capitalise on this trend by being the first bank to offer a service where their customers can make transfers and manage their bank accounts through a Facebook app (Eldridge, 2016).
However, as users are able to control more and more aspects of their lives through their Facebook accounts, the question has to be asked as to what potential privacy issues could arise from services such as DenizBank’s Facebook app?
Despite users having control over their privacy settings, Facebook in many respects can be considered a public forum (O'Reilly, 2013). Banking has on the other hand always been an understandably private and guarded activity. These two services may seem mutually exclusive, however, through the introduction of new communication technologies the lines between the previously distinct public and private spheres have become increasingly blurred (Cassidy, 2016). In the 2011 publication “15 Minutes of Privacy”, the authors claim that “… users of Facebook acknowledge the privacy risk associated with Facebook use but confess to an inability to react, either because they do not possess the necessary technology knowhow to manage privacy settings” (Zizi Papacharissi, 2011, p. 83) It is thus easy to see the risk in merging banking with social media. However, in order to address these potential security problems, Dilek Duman, the Executive Vice President of Information Technologies and Support Operations at Denizbank, assures its critics that “when logging in to our branch at Facebook, there is the OTP (One-time Password) application. Even if the Facebook information of the user is acquired, log in is not possible without the OTP. All our customers can use the Facebook application with no hesitation” (DenizBank, 2012, p. 2). Regardless, it is expected that the tend of merging financial services with social media will continue through the provision of new, innovative applications.
Social media has also changed the way in which financial...