Social Media Adoption by the Banks

What is it about?

In this article, we try to identify the determinants of adoption of social media, in particular Facebook, among the Indian scheduled commercial banks.

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Why is it important?

Banks are using various kinds of social network sites such as Facebook, Twitter, LinkedIn and so on, to maintain customer relationship. In general, virtual financial space of social media has been dominated by Facebook. As on 31 July 2017, India has 241 million Facebook users. In order to expand their business and improve their productivity, the Indian banking industry cannot offer to lose this huge potential clientele base, which is readily available at the virtual financial space. However, there is hardly any study in the existing literature that focuses on the adoption of Facebook by Indian banks. Present empirical research tries to fill this gap. In this article, we try to identify the determinants of adoption of social media, in particular Facebook, among the Indian scheduled commercial banks. We have employed the survival analysis technique that studies the conditional probability of adoption of social media over time. The Kaplan–Meier nonparametric survival technique is used to study the nature of social media adoption by the Indian banks. Employing Cox’s proportional hazard (CPH) regression model, we have tried to assess the effect of explanatory variables on the adoption hazard rate, that is, joining Facebook. In addition, for robustness check, we assess the effect of explanatory variables on the adoption of social media by using the logistic regression model.

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