Banks & Social Media – Will Slow & Steady Win the Race?
Banks’ presence on social media outposts has increased exponentially over the past six months. On Twitter alone, the number of financial institutions with accounts skyrocketed from 54 to over 710 between March and October this year, according to Visible Banking.
Many banks are highly interested and actively watching the social media world. Bank of America and MIT media lab created the Center for Future
Banking earlier this year to examine how social networks will transform the customer banking experience. It’s clear social media is changing the industry. But, engagement is a different story. Regulations and compliance issues still hamper many banks from embracing the truly “open transparency” social media requires.
Introverts vs. Extroverts
We wanted to test how social media engagement impacted “the average user’s” perception online, so BlissPR conducted a brief analysis of 7 major retail banks. We examined engagement levels across different tools including Twitter, Facebook, LinkedIn, YouTube and blogs.
USAA and Wells Fargo are clear front-runners in being truly “engaged.” They are the extroverts of the group, using a variety of social media tools – and each in a meaningful way. They are answering customer questions, encouraging comments about new products or services and posting “how to” videos on YouTube. As a result, the “Jane Q. public” user gets a generally positive, customer-friendly impression of the banks.
On the contrary, Citibank and Chase are the least engaged banks in our analysis. They are using few social media tools, and didn’t appear to be actively engaged with customers. Negative sentiments and complaints were quick to bubble to the top of our online searches.
While our research only provides a cursory review of the situation, there’s enough proof in even our small sample that banks can’t afford to be introverts when it comes to social media.
Do the Risks Outweigh the Rewards?
Mashable recently posted a great story about the ways banks are using social media. It quotes a bank spokesperson warning of the danger of potentially missing opportunities to mitigate risk by choosing not to participate in social media, and supported the use of a controlled and closely managed approach to social media as a way to be transparent with customers.
The bottom line with social media is that negative chatter happens about most companies regardless of their involvement online. Being present enables you to minimize the negative, clarify facts and at least respond. Being absent only fuels the distrust already out there among consumers about the banking world, and allows negative sentiments to build unchecked.
Now, more than ever, consumers are craving transparency. They want personal connections with “large faceless banks.” They want assurances that their banks are still strong, that they are being heard and their opinions do matter.
What do you want from your bank? Do you expect them to engage with you online?
We’ll offer more on this topic in the weeks and months ahead – so stay tuned!
(photo by ecblogger)
To reach Kellie:
Email: kellie@blisspr.com
Twitter: @kshe
LinkedIn: Kellie Sheehan
10/23/2009 at 10:52 AM Permalink
Great comments. My bank is pretty active in the social media space and have seen the benefits you cite. Interestingly, there was an article in the Credit Union Times that discussed the dangers of social media. I wrote a blog post about it and provide a link to the actual article. Created a lot of interesting chatter on Twitter yesterday. Worth checking out just to see another perspective.
06/15/2010 at 11:23 AM Permalink
I’m definitely going to bookmark you! Thank you for
your info.
07/26/2010 at 4:14 AM Permalink
Hey Kellie! Thank you for interesting information! I’m MSc student and I’m writing my thesis regarding the impact of social media on Russian Banks. Indeed, you are right that there is a big room for improvement, yet it seems that only few banks understand it.
Having worked in marketing field in Russian banking industry, I realized that the majority of banks have the same attitude towards customers ‘they come to borrow, they are in trouble if they do so, so let’s do it whatever we want to do’ =) I know it sounds rude and silly, yet it takes place.
The relationships with depositors seem to be a bit better: as least Banks pay them a little more attention, at least they have customer service KPI for bank officers who responsible for mobilization of deposits and investments…. Yes, sounds like ‘no money – no honey’
However, you may be surprised that the banks (I am talking about Russian banks) went in advance of everybody in social networks, guess why? No, it was not for building like-minded groups, or for understanding way of interaction there, but for finding people with default.
Personally, this way of interaction with consumers has been really disappointing for me, yet it was almost impossible to change anything due to top-managers always want ‘something good, quick and free of charge’. With such perception, further activities of banks in social media will fail, due to these actions are time-consuming, require enough staff for communication with consumers, and should be perceived as long-term strategy. Frankly, I don’t believe that there are many banks which ready for following mentioned requirements. Therefore, I think, even though banks are increasingly interesting in social media and running to different kind of platforms, the number of failures among banks in social media will be higher in comparison with other industries, due to banks nature is ‘unsocial’ per se.
07/28/2010 at 10:31 PM Permalink
Nadya, I appreciate you sharing your perspective. It’s interesting to hear the approach that Russian banks have taken. I tend to agree that if banks – or any institutions for that matter – aren’t being transparent about their true intentions about being on social networks, they ultimately will fail. I believe eventually most consumers will see through that. There was a good piece by Brett King in June on The Huffington Post which summarizes it best: “Social media builds advocacy for great service organizations, but for the big banks who tend to focus more on EPS than customer satisfaction, social media exposes their inadequacies.”