The Influence of Social Media on the Banking Industry

7741_10151433964371770_634706890_nThe majority of analysts and bloggers are convinced that banks simply missed the opportunity for jumping on the social media bandwagon. Banks must start to take the social media industry seriously and develop a clear strategy. The challenge is the “how to” in such a highly regulated industry. In less than a decade the daily business will be done from anywhere at any time on mobile devices. Any services need to adjust to these demands and be available accordingly. Due to security, compliance, and risks reasons, the majority of banks have made a pass through on this communication channel so far but social media allows banks to connect with their customers in a completely new manner.

Some banks have already started using social media for their services. While some are focusing on providing information about products and trying to generate leads, others are providing transactional services.

Wells Fargo

Wells Fargo is an example of a bank running a successful social media strategy. They use social media to “further personalize service” they provide to customers:

  • Beyond Today – discusses retirement planning
  • Wells Fargo Environmental Forum – highlights how they “integrate environmental stewardship” into everything they do
  • AdvantageVoice – analyses breaking news, ideas about investing trends, and unique economic insights
  • The Student LoanDown – helps students learn how to prepare and pay for college
  • Commercial Electronic Office® (CEO®) Blog – discusses topics such as business process optimization, product and technology enhancements, and mobile banking trends.

Wells Fargo also maintains several Twitter accounts where customers can pose questions or view job openings, Facebook pages where customers can view career opportunities and even a Wells Fargo pictorial history, and finally, several YouTube channels where they provide personal banking, business, and commercial how-to videos.

North Shore Credit Union

An example of a financial institution early in its social media journey is North Shore Credit Union (NSCU) based in Vancouver, Canada. NSCU differentiates itself based on tailored financial solutions built on personal long-term relationships set amidst upscale retail “spa” branches.

NSCU sees value in participating in social media from two perspectives:

  • Using social media as an important two-way communication channel with the public, clients and prospective clients
  • Having their employees on the designated channels act as extensions of the NSCU brand; demonstrating their thought leadership and engagement within the industry

Currently, NSCU has a presence on Twitter, Facebook, LinkedIn and YouTube. They are in the “build” phase of their journey – introducing the credit union to these online communities and building a following.  A small editorial team consisting of Corporate Communications and Marketing staff creates the content that is shared in these channels and in the future they will examine how they can further optimize their content supply chain.

Today, topics on their channels include financial tips and advice, community involvement, campaign and product awareness and corporate news. For example, on NSCU’s You Tube channel you will find a deep library of advice related videos hosted by the organization’s Financial Advisors.

On the LinkedIn front, NSCU has created an internal group tasked with helping employees maximize their professional LinkedIn profiles. While the program will be launched later this year, half of the organization’s employees are already active on this channel.

A key element to ensuring social media success is having executive level support to enable and encourage experimenting and learning. This makes it easier to “stick with it” since it takes significant commitment, time, and resources to be successful in social media. To date, they have over 260 followers on Twitter and over 200 likes of their Facebook page.

The Social Media Challenge

The challenge is to develop and implement a holistic social media strategy and combine it with the cross-channel efforts. The social media strategy needs to include the aspects of (1)high quality content, clearly defined and measurable (2) key performance indicators (KPIs), a well laid out (3) governance model that allows the company to react ad hoc without having to run through several levels of approval, and (4) customer care.

Do you know of examples where banks have (un)successfully implemented social media programs? If so, what could we learn from their experience?

 

Reyhane Gharibi is a business consultant in the financial services area for a year and a half. Working at various bank around the globe.

Comments

    Leigh says:

    As social media becomes a stronger influence on consumer behavior, banks are faced with a unique opportunity. How they choose to pursue this opportunity is entirely up to them, but I think those who hold back and fail to form a strong strategy will find themselves falling behind their competitors very soon. If banks can implement social media effectively then they can improve customer service while gaining valuable consumer feedback, something that every bank strives to do.

    Vandna says:

    Leigh, I totally agree with you that it is very important for banks to have a corporate strategy to effectively use all channels of social media. I would like to add here that along with improved customer service & feedback, social media attracts new customer segments & new business. Youth across the globe has a tremendous presence on the web and are a part of the social media hype.

    Lianne says:

    I’m in the marketing department of what was North Shore Credit Union (and now BlueShore Financial) and a contributor to our social media content. One of the key drivers of our social media strategy for 2013 was our name change – to allow for client and public engagement and discussion around this significant milestone in our company’s history. Just wanted to let the readers of this post know we’ve changed our name! Thanks.

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