“Why are they here?” This is an important question for retail bank executives to consider when thinking about why and when their customers seek out financial services providers through social media. Our research finds that there are two very specific factors that drive consumers to engage with social media for banking related purposes: Condition and Competence.

 As the chart on the left shows, 36% of customers who engage with social media for financial purposes do so based on a condition or life event – they have experienced a significant life event such as job loss, new job, major expense for child, marriage, or a sizeable inheritance. 30% engage based on competence – meaning they have a budget, plan, and/or a financial advisor. 22% of consumers using social media for financial purposes are motivated by both a life event and personal financial competency.

What does this mean for banks? The same characteristics that would make up an ideal branch customer also appear in customers using social media. It is also more evident that—despite an uncertainty over ROI—social media is direct line to high value customers. Both life events and financial competence are positive indicators of engagement and loyalty. Customers experiencing a major financial event are more likely to shift savings toward or away from their primary financial institution and banks should work to further engage with this segment to ensure retention. Customers demonstrating financial competence are also more likely to purchase products. The resulting challenge for banks, however, is to successfully become a part of the social media-driven purchase process.

Learn more about how banking customers engage with social media for financial services purposes by reading our research brief, Voice of the Consumer: The Role of Social Media in Consumer Financial Services, then tune in to our upcoming webinar to hear how best-in-class members are using social media tools to interact with customers and realize ROI.