Social Media Engagement in Banking

This assignment proposes a research study examining HSBC's use of social media for customer engagement. The research will involve data analysis, manager interviews, thematic analysis of interview responses, and a secondary case study analysis of best practices in the banking sector. The goal is to understand the challenges and opportunities HSBC faces in leveraging social media effectively.

To Investigate the Role of Social Media in
Enhancing Customer Engagement in the
Banking Sector- The Case Study of
HSBC (UK)
Contents
Introduction...........................................................................................................................................1
Problem Statement................................................................................................................................2
Research aim, objectives and research questions...................................................................................2
Potential outputs and outcomes.............................................................................................................3
Conceptual framework..........................................................................................................................3
Customer Engagement Strategy.........................................................................................................4
Channel Strategies.............................................................................................................................6
Methodology.........................................................................................................................................7
Research Design:...............................................................................................................................7
Research Methods:............................................................................................................................7
Data Collection:.................................................................................................................................8
Data analysis......................................................................................................................................8
Organisation of the study.......................................................................................................................9
Project budget and schedule..................................................................................................................9
Conclusions...........................................................................................................................................9
References...........................................................................................................................................10
Introduction
This research would investigate the role of social media for engaging consumers in the
banking sector. A case of HSBC is considered for understanding issues that are causing

hindrance to the development of the engagement strategies that are effective for the
organization. The research would explore various engagement strategies used by the banking
sector to identify best practices that can be used for HSBC to improve its engagement with its
customers. This document is the research proposal which suggests use of a mixed
methodology involving a secondary case study analysis on engagement strategies, secondary
quantitative data analysis of HSBC social media campaign results, and thematic analysis of
the interview responses of marketing managers of HSBC.
Problem Statement
With drastic changes in social media technologies in the past decades, multiple industries are
now adopting the technologies for various purposes including consumer engagement. The use
of social media is on rise even in the banking and financial sector. Banks are able to directly
interact with their customers and engage them in different ways using social media (Marous,
2014)..
In HSBC, customer satisfaction is seen to be declining in recent past as the organization is
unable to fulfil the demands of the technology savvy consumers. The bank is unable to
engage consumers over social media sufficiency despite its heavy usage. HSBC has a very
low like ratio with only 7-8 posts getting likes between 1000 posts. This suggests that the
company is unable to understand consumers sufficiently or are unable to engage them
properly over the social media. Thus, there is a need to explore the challenges that the
company is facing in the social media space while engaging consumers and identify best
practices used by other banks so that the same can be recommended for HSBC so that its
social media engagement can be enhanced (Ahluwalia, 2015).
Research aim, objectives and research questions
The Aim of this research is to explore how social media is used by Banks for engaging their
customers so that an engagement strategy can be formulated for HSBC, UK to improve their
engagement with consumers over the social media.
The research objectives include:
 Understanding the need for the use of social media in modern business

 Understanding how consumer engagement works in social media
 Exploration of benefits and challenges of using social media for consumer
engagement in banking sector
 Investigating the use of social media in HSBC, UK for consumer engagement
 Identification of best consumer engagement strategies used by other companies in the
banking sector
 Coming up with recommendations for building a consumer engagement strategy over
social media for HSBC bank.
Potential outputs and outcomes
The potential outcomes of this research would be:
 An analysis of the current situation of HSBC with respect to customer engagement over social
media
 Identification of challenges faced by the company in building engagement strategies
 Understanding of cases of different social media engagement strategies used in banking sector
The output of these outcomes of the research project would be:
 Description of the current situation of the bank with assessment of the social media
engagement strategy of the bank
 Recommendations o n the social media engagement strategy for HSBC bank
Conceptual framework
Banking is growing in its usage over the digital that includes online banking and mobile
banking. There is a trend of increasing use of internet by banking consumers over past
decade. Thus, this digital presence of consumers demand banks to use digital media also as a
channel for marketing and promotion. Thus, over past few years, banks have taken
significant efforts to use digital channels to run their marking campaigns with social media
playing a major part which is used for engaging consumers by banking organizations
(Desmares & Sharma, 2013).

Consumer engagement involves interactions between a brand and its consumers who resposd
to the marketing efforts taken by the companies in different ways such as by participating in
activities, providing feedback through answering questions, spreading word of mouth through
referrals and recommendations or participate in community activities.
Consumer engagement can be viewed considering two dimensions that include development
of the relevant offer or message that can add value to customers and sharing of these offers or
messages using a right mix of the social media channels in a convenient, consistent and
contextually appropriate manner.
Customer engagement is an important goal for organizations as it can bring customer
satisfaction and loyalty in them. An emotional attachment could be achieved with this
engagement in consumers. When considering the use of social media by banks, most often
organizations use social media to allow customers to share their personal information such
that in return financial advice is given to them. Such engagement builds trust in consumers
and thus, helps in forming relationships between customers and the bank. Engaging with
consumers this way is only one consumer engagement strategy out of many.
Customer Engagement Strategy
Choice of strategy can also be dependent on the social media channels and their popularity.
For instance, YouTube is a very popular channel through which companies can post their
advertisements in the social videos as they have high social engagement and there the
chances of a consumer or customer clicking the ad posted in the social video can bring in
engagement. Snapchat is another social media platform that has become very popular over
the past few years. The platform can be used for providing real time updates about what is
happening in the bank or the industry to consumers. Snapchat has over 10 billion video views
daily that include views from consumers in the age range of 18 to 35 who use live stories and
geofilters or smart lenses to engage with brands. For instance, March Madness Live Story
that ran around NCAA basketball tournament was used by an insurance company to create a
buzz on social media for consumer engagement.
To build a sound engagement strategy for customers, it is essential that the whole customer
life cycle and customer touchpoints during the same are analyzed to understand how they can
engage with the brand at different levels and times. More personalized the interaction is
between the bank and the customers, more influential would be the engagement strategy as t

would increase the confidence in consumer on the capabilities of the bank (Pilorge, Ebstein,
Schrezenmaier, & Turner, 2017).
Before developing any strategy for customer engagement, the first step would involve
identification of the profiles of the target customers for each type of social media platform.
Various platforms that can be explored for demographic profiling of customers include
Facebook, twitter, Instagram, LinkedIn, Pinterest and several more. There are also some
third-party solutions that can help organizations identify customer segments in the finance
industry such as Acxiom and Datalogix. These solutions can help identify customers that
have similar potential through the use of CRM for segmentation. This data can help
companies understand consumers and even make predictions about their future behaviour as
consumers. For instance, 47% of the digital consumers who are active Pinners are seen to be
having some major life even within 6 months as per Milward Brown study. These events
could be purchase of a home, purchase of a car, marriage or birth of a baby. Thus, Pinterest
engagements can be explored to understand their affinities such that their future plans can be
predicted (Johansen, 2012).
While social media can be used to connect with the customers, it also provides metrics that
can help company assess its situation with respect to the capability of engagement to build
awareness about the brand, bring favourability in customers or lead a customer to a purchase
intent. Social media is like a live platform that allows banks to engage with a large number of
consumers and customers. Event targeting, a popular strategy is used by banks for reaching
users in real time moments through the use of engagement tactics like tailored tweets that
drive conversations. For instance, insurance brands in the financial sector have used sporting
events like Super Bowl madness to engage with its customers (Adaptly, 2016)
Besides engagement of users, banks can also make use of the data obtained from these
engagements to understand customers and serve them better as well as enhance their
engagement strategy in future for increasing engagement. The data provides both qualitative
and quantitative insights that can help banks build a unique experience for the customers
through personalized strategies that create a value add over their regular services received
directly through the bank. While customers see no difference between the services offered by
different banks, this social media engagement can make a difference. A study conducted on
10,000 respondents of banking communication over 3 years by Viacom has revealed that
people who face any trouble accessing services online are more likely to connect with the

customer services of a bank immediately. Most of these consumers include the youth and
young adults. Reaching older generation through the digital media is more challenging as
they need more assistance for learning how systems work in the digital space. Several banks
have taken effort to fill this gap such as Barclays bank that initiated Digital Eagles Program
for providing basic teaching on internet skills to elderly consumers.
Channel Strategies
Banks today have their customers as the central point of considerations while deciding
channel strategies. Forrester Research has conducted a study on customer experience which
suggests that the holistic experience of the consumer can drive revenues for the bank. The
study found that 10 incremental purchases made by the existing customers of the bank can
generate up to $81 million of the revenue benefit while reduction in customer churn can help
banks gain retained revenue of up to $73 million. Incremental sales that banks have received
from the positve word of mouth of existing customers were found to be $7 million (Cooper,
Jayakumar, Kim, Palmer, & Ruddenklau, 2011).
BNP Paribas bank had started a multi-channel model for servicing by migrating data from all
its contact centres, websites, and branches to bring into a single CRM environment. Société
Générale uses a similar strategy for building relationships with its customers relying on social media
platforms like Twitter and Facebook. Satander, another banking organization from Spain used CRM
for creating demographic segmentation and explored the data obtained from them for measuring the
customer’s propensity towards future purchases. HSBC, UK makes a choice of a preferred channel for
carrying out banking transactions by exploring the data for identification of most profitable customers
and allows them to take more control over their transactions (Lee, Mathena, Goodall, Finklestein, &
Wong, 2013).
To understand what is keeping HSBC bank from creating a good customer experience over social
media, there is a need to assess its strategies and results against the industry benchmarks. Integration
of different media channels may be done for gathering customer data for analysis of the customer
utilization and identification of their preferences across different media channels. A consistency is
required to be built in communications spread across media channels (Cognizant, 2014).
Newer strategies that are not used currently by HSBC may be explored to understand their potential to
increase customer engagement. For instance, merchant funded offers are given to consumers using
credit or debit cards for making purchases. For this, targeted offers can be shown to customers via
different touch points such as while making ATM transactions or while browsing HSBC website
(Taylor, 2011).

Choice of appropriate strategy would be largely dependent on the data provided by the consumers
which would help the bank understand the behaviour and preferences of customers. A study
conducted by Cisco Systems, Inc. Shows that a majority of 78% of customers prefer to share more of
their information in return for the personalized services provided by the bank. 56% of the consumers
receiving simplified management services for their finance are likely to give away more information
to the bank. Thus, these strategies of engagement can bring up the customer satisfaction as well as
help the organization in keeping consumers engaged throughout their experience journey
(DeLaCastro, Pande, Kulkarni, & Vaidyanathan, 2014).
Methodology
Research Design:
This research would use a mixed methodology as it first needs to understand the situation of
HSBC so that the need for improvement can be identified and then it needs to qualitatively
explore various engagement practices used by other banking organizations such that
appropriate recommendations can be made for improving the situation of HSBC in UK.
For understanding the situation of HSBC, a quantitative inquiry would be done in which
figures would be collected on the consumer engagement over social media by HSBC which
would include the use of social media including number of posts and the engagement of
consumers including the maximum and minimum likes they have given and the number of
followers HSBC has over social media. Analysis of this data would help the research
understand the effectiveness of the current social media engagement strategies and identify
the needs for improvement. It would suggest what strategies are actually engaging consumers
and what are not working.
Further, a qualitative inquiry on the use of social media by other banks would be helpful for
the researcher in identifying the best practices in the industry such that appropriate
recommendations can be made for HSBC to improve their social media engagement with
consumers (Bryman, 2012).
Research Methods:
This research needs an analysis of how social media is used for consumer engagement and
why banking organizations are using it. As this research does not have any specific attributes
defined for testing, there would not be any hypothesis development possible. Hence, a
descriptive and exploratory research approach would be used for understanding the situation

of HSBC and then exploring the best practices in social media engagement (Daniel & Sam,
2011).
Data Collection:
For the exploration of the current situation of HSBC, a data would be collected from 50
consumers engaged with HSBC some way over social media for understanding how they can
be segmented using parameters of demography and social media behavioural data. Further, it
would include collection of the data on 100 social media campaigns run by HSBC with
identification of the approaches taken by the company such as personalization of the
marketing offers, testing and learning strategy, and event driven marketing. The data would
also include the respective likes, shares, and comments gained from the consumers on these
social media posts.
For identifying specific challenge that the company may be facing while defining consumer
engagement strategies, two marketing managers would be chosen from the bank and would
be interviewed. For more qualitative data, secondary data sources would be used for
collecting case studies of different marketing campaigns run by different banking
organization. Each case would investigate a specific type of engagement strategy used by
banks over social media to assess its effectiveness and potential to be used by HSBC.
Data analysis
MS excel would be used for the analysis of the consumer engagement data obtained from
HSBC exploration and statistical tables, bar graphs and pie charts would be used to present
the results of the analysis. For the analyses of the qualitative interview data, a thematic
analysis would be used which would include identification of the thematic codes explaining
the situation of HSBC and identification of gaps for improvement.
For the analysis of the qualitative industry data ob best practices of consumer engagement on
social media, case study analysis would be used such that multiple case studies would be
explored sequentially and then a comprehensive view of the same would be presented by
combining the findings from the case study analysis which would be used for coming up with
engagement strategy recommendations for HSBC. Each case study would deal with specific
consumer engagement strategy used by banks over social media including personalized
offers, and real time driven marketing. The objectives of these case studies would be to
explore how these strategies are used and to assess how effective they have been in engaging

consumers over social media as well as run a feasibility check on them to understand if the
same can be effectively used by HSBC for engaging their consumers.
Organisation of the study
Chapter 1: Introduction - This would be an introduction to the research including its significance
aims and objectives
Chapter 2: Literature review - This would contain the conceptual foundation of the research including
al the related stories and models as well as pasts studies conducted in the field. A gap would be
analyzed in the research that would be filled with the current research.
Chapter 3: Methodology - This section would explain the mixed research methodology that would be
used in this research identifying methods that would be used for collecting data and analyseing the
same.
Chapter 4: Data Analysis - The data collected would be analyzed and the results would be presented
in this section with interpretations and relevant discussions on the object
Chapter 5: Conclusions and recommendations - In this section, the discussions and research findings
would be summarized and appropriate recommendations would be made on the engagement strategy
for HSBC based on the discussions.
Project budget and schedule
The budget allotted to this project is $1200 and the project would be completed in 6 months as per the
timeline presented below:
Research Task Starting Date Milestone Date Duration
Full project proposal 10th Sept 2017 4th Oct 2017 14 days
Refining objectives 4th Oct 2017 6th Oct 2017 3 days
Literature review 7th Oct 2017 7th Dec 2017 60 days
Data collection 8th Dec 2017 10th Feb 2018 62 days
Data Analysis 11th Feb 2018 10th Mar 2018 30 days
Report preparation 11th Mar 2018 20th Mar 2018 9 days
Proofreading and
editing
20th Mar 2018 31st mar 2018 12 days
Report submission 1st Apr 2018 5th Apr 2018 5 days

Conclusions
This paper proposes a research to be conducted on the use of social media for customer
engagement for the Banking sector. A case of HSBC would be taken and the inquiry would be run on
the system using data analysis for understanding their challenges and interviews would be taken of
the managers to explore the challenges and opportunities in detail. The interview responses would
be analyzed using thematic analysis. The mixed approach would also involve secondary case study
analysis on various best practices of social media engagement.
References
Adaptly. (2016). Money Matters on Social Media: How Financial Services Brands Can Engage
Customers with Paid Social. Adaptly.
Ahluwalia, L. (2015, August 18). Social Media in the Financial Industry. Retrieved March 02, 2017,
from https://www.hallaminternet.com/social-media-in-the-financial-industry/
Bryman, A. (2012). Social Research Methods. Oxford: Oxford University Press.
Cognizant. (2014). How Banks Can Use Social Media Analytics To Drive Business Advantage.
Cognizant.
Cooper, J., Jayakumar, A., Kim, W., Palmer, G., & Ruddenklau, A. (2011). The new digital tipping
point. PWC.
Daniel, P., & Sam, A. (2011). Research Methodology. New York: Gyan Publishing House.
DeLaCastro, S., Pande, M., Kulkarni, S., & Vaidyanathan, A. (2014). For Effective Digital Banking
Channels,Put Customers First. Cognizant.
Desmares, P., & Sharma, V. (2013). The Global Retail Banking Digital Marketing Report. WIPRO.
Gill, J., & Johnson, P. (2010). Research Methods for Managers. SAGE: London.
Johansen, M. (2012). Customer Engagement on Facebook:A Social Brand Experience? NHH.
Lee, L., Mathena, J., Goodall, S., Finklestein, P., & Wong, C. (2013). Who says banks can’t be
social? Ddeloitte.

Marous, J. (2014, May 5). Minding The Gap in Social Banking Expectations. Retrieved March 02,
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research-study/
Pilorge, P., Ebstein, D., Schrezenmaier, T., & Turner, A. S. (2017). Defining the new drivers of
customer engagement. EYGM Limited.
Taylor, J. (2011). Responsive Customer Engagement in Banking. Decision Management Solutions.