Effect Of Social Media Activity On Profitability Of Banks In UAE

In a world where the firms have employed diverse strategies to market themselves, social media has been one the most important strategy. Despite its fame, there has been less information and connection between the social media activity and profitability of the banks, especially in UAE. Most research have been done in large industries and have not been focused on specific profitability metrics. This paper explains how the social media activity (SMA) affects the profitability metrics. Facebook, Instagram and twitter data from social bakers like the number of fans, posts have been taken to measure the activity. A list of 16 banks and their annual reports have been taken for 2020, to measure the effects on the performance metrics. Correlation analysis have been done to find the effects of SMA on both profitability metrics and other bank performance. The result has indicated a positive and a significant effect of the SMA on these metrics. Although some parameters of the risk factors like Asset quality, liquidity risk have a negative correlation with the SMA. The research can be good tool and reference for the bank managers and administrators in UAE to understand how important SMA is to enhance bank’s performance and profitability and help them to have strong intensions to increase their customer base and have a timely update on these social media platforms.

“In today’s digital era, a bank’s profitability doesn’t just rely on interest margins—it now scrolls through timelines, hashtags, and follower counts.”

This study underscores the growing significance of Social Media Activity (SMA) as a strategic asset for banks in the UAE. By analyzing key metrics from platforms like Facebook, Instagram, and Twitter, and correlating them with financial data from 16 banks’ annual reports, the research finds a positive and statistically significant relationship between SMA and profitability. While certain risk indicators like asset quality and liquidity risk show negative correlations, the overall findings highlight the value of a proactive and engaging social media presence. Bank managers can leverage these insights to better align their digital marketing strategies with performance goals, ultimately enhancing both profitability and customer engagement.