The Fidor Bank Story: A Lesson in How and Why Banks Must Utilize Social Media

In April this year, computerweekly.com published an article based on Ovum’s various studies of the global banking sector where the research agency predicted that “social media will become a significant channel for retail banks in Europe within three years”.

Let me give you one of the finest examples of a bank utilizing social media. Germany’s Fidor Bank was established in 2007.  It is the world’s first online-only bank that operates only through the internet and using social media. From customer service, communications and engagement to new product development, everything happens on social media at the Fidor Bank.

Fidor Bank’s success through social media is best described by Karl Finders in his article when he says, “Fidor currently has more than 200,000 people registered and 150,000 community members. It has €160m worth of deposits, and its lending totals about €100m. With only 34 staff, no branches and a cost of only €3.50 to set up a customer with full banking, the overheads are low compared with traditional banks”. He adds, “Fidor’s customers trust it because it listens to them all the time through social media and customers have a trusted community supporting them”. 

How did Fidor Bank achieve this?

At a time when customers’ trust and faith in their banks was at an abysmal low, courtesy global economic crisis, Fidor Bank’s leadership took a bold move. They were brave enough to rely entirely on social media to restore that trust through personalized social media interactions. They communicated openly about issues related to banking and personal finance on social media. They opened channels on Facebook and Twitter for their customers to interact candidly with them, thus creating a high level of operational transparency. In no time Fidor’s customers realized that this bank was genuine and trustworthy. So, customers who came to Fidor Bank, stayed with it. In fact, even the bank’s customer service is handled by loyal customers on their social community.

Key takeaways from Fidor Bank’s strategy:

• Use social media to overcome the cost and complexity of traditional banking
• Always listen to your customers.
• Make social media a customer engagement tool.
• Increase customer trust through an online community
• Increase sales and improve customer service through enhanced customer communication strategies.

So, would you like to emulate Fidor Bank? To know how Shout Analytics can help you, write to us at info@shoutanalytics.com.