Social media is a prominent force in today’s banking world : a study of the efficacy of social media as a sales driver and the consequences it has on customer retention for Maltese banks

Abstract

It is fair to say that social media nowadays has become an integral part in the daily lives of the majority of consumers around the globe. The huge leaps made from a technological standpoint together with the Covid-19 pandemic over the last few years have certainly played a massive role into making social media platforms essential in the business world and most specifically in the banking industry according to (Kirakosyan, 2015). The banking industry has had to adapt to the ever-growing introduction of social media platforms to retain and attract new customers. However, it might be the case that the Maltese banking industry may not be as equipped and ready to adopt a full transition to social media platforms from traditional marketing tools in order to retain and attract customers. This study will attempt to go more in depth into the question: “Is social media considered to be a prominent marketing tool by Maltese banks for the retention and the expansion of the bank’s clientele?” This dissertation will try to capture the manner and extent to which social media is currently being implemented by also taking into consideration the impact that the unavoidable Covid-19 pandemic has left on the banking industry. In continuation, the study will also investigate how the ever-growing financial literacy phenomena and social media platforms are being linked together in the Maltese banking industry. Through a qualitative study approach, the data obtained through the conduction of semi-structured interviews with banks in the Maltese banking industry will give a better indication as to where the Maltese banking industry stands in comparison to other countries. A comparison between the effect social media has on Maltese banks in terms of the retention and attraction of customers will be made with prior literature on other banking industries. In doing so, Maltese banks can identify areas to improve on, hence an opportunity may arise. The findings indicate that social media in the Maltese banking industry is becoming a more prominent tool as a sales driver that is the acquisition of clientele, however banks are still opting to use social media in a secondary capacity due to regulations in relation to the confidentiality of information. Findings have also disclosed that in order to keep adequate customer retention rates, the concept of financial literacy needs to be given its importance and that social media platforms are an excellent method to disclose financial information. In conclusion, it is important to mention that areas of improvement and limitations which have to do with the processes ventured to carry out such research will also be noted. Finally, a conclusion highlighting the main points that resulted from such study will follow up.