In 2017, about one million people a day all over the world joined a social media network, a trend that continued to grow in 2018. Social media users in Latin America and the Caribbean reached 394 million in early 2017, according to data from social media platform Hootsuite.
The popularity explosion of services such as Facebook, Instagram, Twitter and YouTube has benefitted many industries, such as retail. Banks, however, still have a long way to go to catch up.
The adoption of digital banking in Latin America has lagged behind that of other regions due to reasons that go from security worries to a general mistrust towards online transactions. Nonetheless, some of those barriers are beginning to be overcome as cultural habits change, more people have online access and digital offerings become increasingly efficient. About 68% of people in South America have online access, according to Hootsuite.
Latin Americans are the users that spend most time on social networks such as Facebook and Twitter, representing a hugely attractive opportunity to companies, including banks. According to data tracker comScore, Latin American Internet users spend 18% of their time on social media when they access the web through their computers, either at home or at work. That is higher than Americans and Canadians (13%), Europeans (12%) and Asians (10%).
The use of social media by banks as a marketing tool to generate new business, however, has been more limited.
The amount of social media bank followers climbed 20% in 2016, according to Latinia, a software provider. However, more followers have not translated into a higher interaction rate between banks and its customers. The report even found a drop of Twitter interactions in some countries.
Facebook remains the preferred social network Latin Americans use to reach out to banks. Brazil and Mexico are two of the five countries that use Facebook the most, according to Hootsuite. Ten of Latin America’s largest banks do have a presence in these two countries.
About 57% of Latin Americans prefer to use social media to do research before buying a product or opening a bank account, according to the GlobalWebIndex. What makes social media content, such as a tweet or Facebook post go viral? According to comScore, the main motivator when it comes to financial products is that the content is inspiring, the second is that it generates a sense of happiness and the third is that it generates excitement.
Experts point to messaging services, visual content (particularly videos), sponsored content, which produces much higher interaction rates) and Instagram, a social network that banks have not used much, as the main product discovery drivers.
Hootsuite expects Instagram will play a much larger role by 2020, “Instagram will rapidly evolve and become in the new home of company brands,” predicts Ryan Holmes, Hootsuite chief executive officer.