Global analyst, Ovum, reports that European retail banks are hesitant to use social media, such as Facebook and Twitter as a platform.
Ovum states that American and Asia-Pacific retail banks are leading the way to using social media as a form of interaction with customers, with European banks lagging far behind.
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Integrating social media into their customer communications strategies is a must for banks, as well as understanding and implementing relevant risks and compliance requirements that may arise within data security and privacy.
Banks are looking for new strategies that will allow them to catch up with current trends and demographics; this will help back focus on customer experience, translating to increased sales.
Jaroslaw Knapik, senior analyst, Ovum said: "It is now almost impossible to ignore social media. It provides a powerful marketing platform for understanding and engaging with customers, allowing banks to improve sales and profitability."
Voicing concerns over data security and privacy and potential reputational damage are leading to European banks underperforming on social media platforms. The report anticipates that this will change in the next three years as social media increases in significance for retail banks.
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