Australia's oldest bank will soon be Australia's biggest bank. It will also have the credentials to be classed as the country's most connected bank.
The merger of Westpac and St George will bring together two banks that have put plenty of thought and effort into harnessing the power of online social networking. Their rivals are struggling to catch up.
Westpac showed its management had moved a long way up the technology yield curve with the launch in May of a social networking site for female business customers called the Ruby Connection.
The Ruby Connection is the brainchild of Westpac's women's markets division headed by Larke Riemer. It was developed to support the needs of women in business. It grew out of Westpac's research into the needs of women customers.
The research found that Westpac's branch network had failed to connect with female customers. Women believed they were not treated with the respect they deserved. The research showed women wanted to do research before making financial decisions.
The bank's response to the research was a series of educational seminars that have evolved into a web site that aims to educate, providing a place for customers to meet online and talk about business, life and whatever is on their minds. The Ruby Connection has more than 20 blogs from an eclectic mix of businesswomen.
Westpac's engagement with social networking goes beyond the Ruby Connection. It allows staff to use popular social networking sites such as Facebook and MySpace during work hours provided they abide by the bank's internet code of use.
The bank recognises that Gen-Y will want to use social networking sites. It sees a business case for staff to access knowledge and participate in communities. For example, Westpac staff have shared their experiences online following voluntary work with Cape York Partnerships.
The merger with St George will bring together two like-minded organisations.
St George takes the view that in the current tight labour market organisations need to accommodate the interests of younger staff to attract and retain them. With that in mind, the bank allows staff to access Facebook. In addition, St George is rolling out an internal instant messaging service.
The bank says it is just experimenting with the Facebook access during work hours to see if it has any impact on staff retention and productivity.
Gartner research analyst Brian Prentice says it is smarter for companies wanting to utilise social networking in business applications to allow it to develop from the grass roots upwards. The worst thing would be for a company's IT manager to issue an edict that Facebook was the new vehicle for collaborating on projects.
Prentice says that, at its simplest, social networking can be defined as a group email. But he would not be surprised if the group email evolved into staff getting their information from a manager through reading his blog. But it would be some time before social networking in the enterprise reached what Malcolm Gladwell called the "tipping point". "We have not quite hit the critical mass that will make social networking self reinforcing," says Prentice.
He says, however, that only businesses from the “dinosaur era” would ban their staff from accessing social networking sites at work. After all, how can you deny people the right to do personal things at the office when they are working 50 to 60 hours a week.
Gartner research director Nikos Drakos said in a report released this month that overly restrictive policies and controls can substantially inhibit community growth and can lead to the failure of the social application initiative. "Managing an appropriate balance between freedom and control is crucial to community growth and maintenance, and must be tuned continuously."
The Gartner research has found that 10% to 15% of corporations ban access to social networking sites from their corporate network.
Richard Kimber, chief executive of social networking site Friendster, told Business Spectator that social networking sites were ideal for providing the framework for customers of financial services businesses to interact.
Kimber is the former head of Google in South Asia and before that spent about 20 years working in online banking and broking. He was CEO of FirstDirect in Britain, head of personal ebusiness at HSBC and worked at Westpac and Macquarie banks.
He says that social networks can link staff in the workplace, customers and competitors and that the differentiator for successful companies will be the technology.
“Obviously, given my background in financial services we are looking at ways you could use financial services with social networking,” he says. “Social networking is any network of people who have common interests. So you could imagine a network of investors or network of investment professionals who want to share ideas using a social network.”
Kimber says social networking sites differ from Google in their advertising proposition because they offer the combination of all of the users' attributes, across all the demographics, combined with great reach.
“The interesting thing is you can get targeting and reach through a social network whereas you usually have to trade off one or the other. You either have a lot of reach or not much targeting, or you have got really good targeting or not much reach. You actually have the best of both worlds.”
Meanwhile Westpac's major competitors are trying to catch up. NAB allows its staff to use Facebook and MySpace during work hours provided it is within the bank's principles on appropriate internet access. The bank may use social networking in business applications but that will have to wait until its systems are upgraded over the next five years.
ANZ says it has no specific policy on social networking websites but is reviewing the business case for their use.
This article first appeared on Business Spectator.
http://www.smartcompany.com.au/Free-Articles/The-Briefing/20080819-How-Australias-big-banks-are-harnessing-the-power-of-social-networking-Boyd.html
XCOM Media helps brands achieve the nirvana of one-to-one communication through online strategy and consultancy, design, development, web 2.0 and social networking, email marketing, mobile marketing, viral marketing, campaign management, technology and tools and analytics, with lower costs and higher returns than all other forms of marketing.
To view our work or to find out how XCOM Media can help your business contact us.
