Banks have been experimenting with customer service on social media platforms like Twitter since at least 2009 — the better part of three years. So how are they doing? Can social media replace traditional customer service channels at banks? What challenges face financial institutions using sites like Twitter for customer service? Are consumers willing to conduct banking activities through tweets?
These are among the many questions Javelin Strategy & Research tried to tackle in their report, “Banking and Social Media: Easy to Say, Hard to Do.”
In their research, Javelin analyzed nearly 5,500 tweets sent by three of America’s biggest banks — BofA, Wells Fargo and Citi — involving replies to customers who had contacted them on Twitter. (Chase was excluded from the study because they are not active on Twitter.) Javelin specifically broke down how many customer service issues were resolved entirely with tweets vs. how many were diverted to other channels, like email or call centers.
“Social media is not a replacement for call center or in-branch interaction.”
– Mark Schwanhausser,
The research found that none of the big banks did an exceptionally good job of resolving complaints on Twitter.
Citi did the best job responding to customers via Twitter. They provided direct answers and successfully resolved customers issues using just tweets alone 36% of the time. Wells Fargo and Bank of America lagged far behind, with 11% and 3% resolution rates respectively.
That doesn’t necessarily mean customers’ complaints weren’t ultimately addressed elsewhere, but they were not resolved via Twitter — the customer’s chosen means of communication. Or perhaps it means big banks struggle to help customers period, regardless of channel.
Twitter Becomes a Lightning Rod
Javelin’s study included three separate research components: (1) the analysis of 5,489 public tweets, (2) an examination of 300 full Twitter conversations, and (3) an online survey of 5,000 customers. The research was conducted over a seven-week stretch from September 20 to November 10, 2011.
This period happened to coincide with Occupy Wall Street protests, the huge backlash over BofA’s $5 debit card fees, and Bank Transfer Day. What Javelin found was that Twitter became a lightning rod for angry customers, with tweet volumes jumping threefold at big banks’ customer service accounts.
A separate study by The Financial Brand revealed that two-thirds of all banks and credit unions are already on Twitter or plan to launch their account soon.
Customers Blow Off Steam, Banks Respond With Canned Tweets
Customers turn to Twitter to vent, usually when something has gone wrong. Optirate’s Serge Milman says this is like a customer hopping on Twitter to send the bank an SOS.
“Social media is best for blowing off steam,” noted one journalist at US News. “People like to complain online for a reason: it’s an effective way to quickly announce to many people why you are frustrated with a company.”
“Large banks have a long history of poor customer service, regardless of channel.”
– James L Belcher
That’s why Twitter has become a popular customer service option. People who have already encountered poor service in another channel feel that Twitter is there only hope to get a response. It’s nearly impossible to reach a real human being at big banks, but on Twitter customers feel there’s at least some chance of interacting with a live person.
And how do banks respond? With canned tweets. Javelin’s research showed that the majority of Twitter replies big banks sent to customers were scripted messages. Even though banks’ Twitter service reps address only a fraction of issues raised on Twitter, they generate repetitive answers. Usually, the bank uses service jujitsu to shifts the burden of next steps back onto customers.
That’s why David McMillin at Bankrate.com believes Twitter will be “far too impersonal to act as a customer service department for some account holders.”
An Annoying Extra Step
The Javelin report recommends that — whenever possible — banks should try to answer customer questions directly on Twitter. And experts tend to agree. The general guideline: answer customers’ questions within the channel that the conversation was initiated, whether that be Twitter, email or phone.
And yet that’s not how most big banks handle customer tweets.
“Resolving most issues via Twitter is essentially impossible.”
– Serge Milman, CEO/Optirate
Kimarie Matthews, a VP in Wells Fargo’s Internet Services Group, says to get customers the answers they need on Twitter “sometimes means connecting a customer with someone from Wells Fargo who is not on Twitter. And in some instances, to protect the privacy of the customer, an issue is taken offline.”
BofA spokeswoman Tara Burke said her bank’s approach was similar to Wells Fargo’s. “After initial contact we take the issue off-line to protect the privacy of the customer,” she said.
Sairam Krishnan, an authority on social CRM, says “Twitter should be a tool to save the customer’s time, to aid his convenience, and not as yet another step to conventional customer service.”
Indeed customers are bound to get frustrated if redirected to a service channel they’ve already tried. But maybe consumer expectations are unrealistic? After all, is it really even possible to handle sensitive banking matters on a third-party social platform?
“Anybody who understands the complexity of banking and the associated privacy rules will recognize the resolving most issues via Twitter is essentially impossible,” says Serge Milman, CEO of Optirate.
A Viable Service Channel?
According to Javelin’s research, the large majority of Americans have strong misgivings about mixing personal finances and social networks. Only one in six said they would be willing to receive updates about bank promotions and discounts. Far fewer than that — less than one in ten — said they would be willing to check their account balance through a social channel.
“Social media is not a replacement for call center or in-branch interaction,” says Mark Schwanhausser, who authored the Javelin research report.
Schwanhausser, Javelin’s Senior Analyst specializing in financial delivery channels, says social media is but one service option among many for customers needing assistance. “It’s not for all people now,” he adds. “And I don’t think it ever will be.”
Schwanhausser says that as financial institutions begin to participate in social media channels, “they need to be prepared to allocate sufficient resources to address and resolve consumer issues.”
Reality Check: If you’re going to be on Twitter, you’d better anticipate customer complaints and be ready to handle them… because those complaints are going to come whether you want Twitter to be a service channel or not.
Rachel King writing for ZDNet said, “There are plenty of people who are afraid of looking at any kind of financial data online, whether it be on a desktop browser or a mobile app — regardless of how safe it has actually been determined to be.”
Indeed one anonymous bank customer said, “I would never in a billion years send a tweet or post on Facebook to a bank trying to resolve an issue I may be having with my account.”
That’s why some folks are deeply pessimistic about Twitter’s role for financial institutions. “Large banks have a long history of poor customer service, regardless of channel,” said James L Belcher. “They’ll continue to provide poor customer service through whatever types of communication emerge after Twitter.”
James Van Dyke, President/Javelin, is undeterred. “Social media is the next frontier for the ‘financial institution + consumer’ relationship.”