Much before Facebook's IPO filing valuing it at US$ 94 billion last week, everyone including the banks have gone back to the drawing board, trying to evaluate the ways and means to find and retain customers online.
Banks are trying to understand this new young segment which spends a lot of time on the social media, make friends online, network online, find jobs online, educate/train themselves online, watch movies online, entertain themselves online. Banks have started believing that this is the future and they expect not only to respond to customers through the use of social media but also use the digital channel to acquire clients online.
Banks that have tried out this channel are already finding this an extremely useful and low cost option to acquire clients. For example, if you search for "Personal Loan" on www.google.ae, you would be surprised to find banks like HSBC and Citibank advertising on google apart from online personal finance players like moneycamel.com, imudir.com and moneygulf.com.
Based upon MoneyGulf's survey of banks in the UAE, International banks are expected to be allocating 10-20% of their total marketing budget towards digital channels. This trends seems to be catching up with local banks too where mandates are given to advertising agencies to prepare a digital marketing strategy.
The online space offers a level playing field where time and content is of essence. In the online space, banks not only compete with other banks but also with online personal finance aggregators like MoneyGulf.com and IMudir.com who might be able to innovate/change strategy/deliver in a much faster way compared to large structured banks with multiple levels of hierarchy and red tape. Such sites also offer services to apply for multiple banks so that the customer gets a choice and gets to choose the best possible option.
Globally, MoneySuperMarket.com in the UK and LendingTree.com in the US have had significant impact in the way personal finance industry functions in their respective markets. Google buying beatthatquote.com in the UK and starting GoogleAdvisor in the US confirms the potential of Personal Finance customer acquisition through the online strategy.
Will it be a similar story in the UAE where internet penetration is growing and the mobile penetration is about 200%? The early trend seems to suggest that we are indeed moving towards an online personal finance world here in the UAE. In the case of MoneyGulf.com, the site traffic has grown by 300% in the last 2 months with leads growing at a faster pace. The story is similar with other online aggregators in the market.
The benefit of course would be for the consumer as information on personal finance would be available online and one need not visit multiple banks to get information. According to Mr. Thomas Wilkins a tourism industry professional, he received 3 personal loan offers within 24 hours of applying on MoneyGulf.com as his employer was "listed" with those banks and he chose a bank based upon the lowest interest rate offered.
The future of the world is online and social media. Banks that do not keep pace with the time for using this channel might be left out in the future!