Retail banks in Europe are lagging behind their peers in Asia-Pacific and North America by failing to exploit social media, a new report from global analyst Ovum claims.
The report, Social Media Trends in Retail Banking, found that Asia-Pacific and American retail banks are leading the way with social media because they see it as an important new way to engage with their customers.
But although their European counterparts have not yet caught up with social media, Ovum expects this to change significantly over the next three years as social media becomes a significant channel for retail banks.
When using social media, retail banks must understand and implement relevant risk and compliance requirements to ensure data security and privacy, Ovum warns.
Jaroslaw Knapik, senior analyst within Ovum's financial services technology practice, said: “European banks, in particular, find themselves at the back of an underperforming class when it comes to social media engagement, voicing concerns over data security, ensuring data privacy, as well as the potential reputational damage that can come from a mismanaged communication."
Sally Percy is editor of The Treasurer