Social media develops retail banking into the modern lifestyle of consumers online

Written by Oskar Olsson

The traditionally retail banking sector in Sweden is developing as part of the flexible society shaped by Internet and the spread of social media. This new era forces the sector to abandoned old approaches and focusing on how to engage customers to retain loyalty. As part of the development, new online consumer-focused concepts becoming serious competitors challenging the old and stereotype retail banking sector in Sweden.  

How has the retail banking sector adapted to consumers online?

The given answer to the question is that the retail banking sector has stated adapting towards a more online-focused way of doing business. On a couple of years one is able to do almost all errands through digital devices such as the smartphone, one of the latest functions is financial advising online via your computer. In general the sector is gaining higher demands from consumers, correctly in my perspective. The retail banking sector has for too long ruled the conditions without any clear pressure from consumers. New competitors are now challenging the market with concepts more in line with online consumers. Interaction, availability and transparency have become key words fitting into the modern lifestyle of today, to which banking also need to adapt in order to be competitive.

Personal banking of today – getting unfaithful to your bank

In a historic perspective consumers have been very loyal to a certain bank because of few alternatives on the market. Another aspect that comes into play is the fact it is very consuming in terms of time to change, this is why banking for long has been associated with bureaucracy. 

“Part of the time people used to spend on traditional media is now being spent on social media. Given this change in consumption habits and the fact that social media are more interactive, there is a danger that messages sent using traditional advertising will fall flat. “ (Amelini & Villanueva, 2011, p. 2). 

Today consumers have become unfaithful to his bank, selecting the products he finds the most valuable. This trend is growing and reflected in the media flow of today. As an example, an economy chronicler at one of the biggest newspapers in Sweden highlights this in the article “A bank is like a salesman – be unfaithful to it”. 

One of the causes loosening up the stiff market situation in Sweden is certainly social media that played a part in this development. The authors of Consumer Power: Evolution in Digital Age put a finger on the development consumers have had on consumption. Social media has the power to influence other people in greater extent through blogs or other communities online (Labrecque et al., 2013). 

An example of the empowerment process is the crowd-based organization Bolånegruppen. This grass-root organization supports private persons through group negotiating with interests on mortgage loans. This is simply a great way to illustrate the power shift and how consumers are able to challenge the old establishment. 

Personal banking of today is becoming social in many aspects, but being online is not enough for the consumers. This means that the level of interaction between banking companies and consumers need to increase in order to build and retain trust. Adding Social Media to the Marketing Mix is an academic article that brings up the importance of putting social media on the table for consideration when deciding marketing strategy. The authors argue that the use of social media can start conversations and build brand recognition but can also be very hard to control, that is why you need a well-planned strategy (Amelini & Villanueva, 2011). 

Nordnet is a great example illustrating how to interact through social media in order to involve your customers. The company has developed a platform called Shareville where you are able to build your own portfolio with securities and compete with other customers. At the moment over 30 000 users are active and it is free of charges. As much as it is a competition you can get inspired by start following famous persons, discuss investments and read articles written of professionals within the field. Getting your customers involved through social media, for example Facebook, Pereira et al. (2014) argues is crucial for long-term sustainable business 

Personal banking of today includes new concepts, from niche banks with a high level of consumer integration through social media, grassroots organizations originated from social platforms and the traditional banks slowly re-adjusting their business models integrating social media. But in order to change the label that the banking sector has been attributed it has to further improve to retain trust and loyalty from consumers. 

The shift behind social banking 

“With the introduction of the World Wide Web, ordinary consumers gained access to vast amounts of information and developed opportunities to influence their own lives, in the marketplace and beyond.” (Labrecque et al. 2013, p. 1).

Changing consumption patterns including technology development is the fundament that has changed our society in general and in turn the banking sector. This is why companies need to adapt to changing habits about where to find information including the banking sector. 

In Sweden the market for long have been dominated of a handful of large players setting their own rules. Social media and the Internet has transformed economics and personal finance to a more commonly topic. The biggest shift is the availability of information, making people in general more aware. Today the discussion of economics and personal finances has become more public and not a topic strictly discussed at the bank.

Social media and the Internet has made personal finances public to the general mass giving people the power to have a word in the development of the sector. Relating economics to something that is actually fun and makes you fulfill your dreams could develop personal banking to more than a necessity.

Nordnet is maybe the company that has come the furthest in the Swedish banking market integrating its customers in the business. Getting the consumer involved in the process of creating brand loyalty is crucial to become successful. Within the article Consumer Brand Engagement in Social Media: Conceptualization, Scale Development and Validation the authors argue about importance of interactivity between the company and the consumer. 

Creating a highly engaging brand will get consumers to think and associate with a certain company when for example having a discussion with someone about investments (Hollebeek et al. 2014). But in order to reach this level of association and create this bond you have to not only focus on meeting a certain need like when going to the dentist. It is at this stage social media comes into play because it is a perfect tool in order to reach people, whenever and wherever. 

The future of banking turning social 

The banking sector has certainly taken steps towards becoming more consumer focused and more transparent, although the journey is far from over. Consumer power has invoked the different companies how to put up their strategies in order to retain customer loyalty. Integrating the powerful tool of social media has developed new concepts on the market and is now important for being competitive on the market. But is social banking here to stay?

An interesting article named Social Banker v2.0 by KPMG describes the importance of integrating social media into banking and how to use it. Some of the key points described are the following:

  • Build relationships, don’t sell your product/ service
  • Use social media to find new innovations, co-creation
  • Personification through social media, attract the new generation of customers
  • Gamificaton, a tool through social media to engage your customers (KPMG, 2013)

The mentioned key points are all very interesting and goes hand in hand with academic literature within the field of social media and branding. One of the major key points in the article is to use social media for what it is really intended to, build relationships (KMPG, 2013). With this in mind social media is not the place where you try to sell your product, rather have an on-going discussion with your crowd.   

Providing my opinion is that social banking is here to stay, the question is how creative the companies will get. The metaphor of social media as playing pinball is a spot on description of how to understand marketing through social media (Henning-Thurau et al. 2013). Putting that into action it means increased efforts in terms of co-creation between consumers and companies.

At the moment I think we are witnessing a change both on the market but maybe the biggest struggle is internally in the companies. The banking section have always had a stereotype image which I believe at the moment are transforming, a cultural clash. Hopefully the future will bring even more consumer integrated solutions turning up the competition on the market! 

Reference list

Electronical resources:

Bolånegruppen (2013) Facebook page [Online] Avaliable at: [Accessed: 2015-02-17]

KPMG (2013). The Social Banker v2.0 – Social media lessons from banking insiders. [Online] 

Avaliable at: [Accessed: 2015-02-17]

Svenska Dagbladet (2014). En bank är som en försäljare – var otrogen mot den [Online]

Avalible at: [Accessed: 2015-02-17]


Armelli, G. and Villanueva, J. (2011),”Adding Social Media to the Marketing Mix”, IESE insight, No. 9. Avaliable at: [Accessed: 2015-02-17]

Henning.-Thurau, T., Hofacker, C.F. & Bloching, B. (2013), “Marketing the Pinball Way: Understanding How Social Media Change the Generation of Value for Consumers and Companies”, Journal of Interactive Marketing, 27, 237-241. 

Avaliable at: [Accessed: 2015-02-17]

Hollebeek, L.D., Glynn, M.S. & Brodie, R.J. (2014), “Consumer Brand Engagement in Social Media: Conceptualization, Scale Development and Validation”, Journal of Interactive Marketing, 28, 149-165. Avaliable at: [Accessed: 2015-02-17]

Labrecque, L.I., Esche, J., Mathwick, C., Novak, T.P. & Hofacker, C.F. (2013), “Consumer Power: Evolution in the Digital Age”, Journal of Interactive Marketing, 27, 257-269.

Avaliable at: [Accessed: 2015-02-17]

Pereira, H.G., Salgueiro, M. & Mateus, I. (2014), “Say yes to Facebook and get your customers involved! Relationships in a world of social networks”, Business Horizons, 57, 695-702. Avaliable at: [Accessed: 2015-02-17]