Social media is the hot topic right now. Bank and credit union executives devour every article on social media in retail banking that they get their hands on. But a funny thing happened somewhere along the way. It seems journalists, reporters and other industry correspondents decided social media was a fore drawn conclusion.
Journalistic objectivity? Phbbbtt… Social media’s new. It’s awesome. It’s obvious. Everyone should be doing it.
Many media stories about social media in the financial industry adopt the presumptive stance that there must undoubtedly be inherent strategic goodness in it. Read through articles today, and you’ll get the distinct impression that the ROI of social media has been established and accepted. Yet seldom do you ever see any real evidence proving the value of social media. Sure, there are plenty of ideas, lots of suggestions, the occasional fact or two, and many financial institutions are running experiments. But the actual proof points are few and far between.
It’s one thing when vendors and industry trade publications outline the strategic variables an organization needs to evaluate before undertaking a new initiative — something like social media. But it’s dangerous when a fetish for innovation and all-things-new morphs into a blanket recommendation: “all banks, all credit unions, everywhere, never mind objectives, regardless of size and despite the audience need to embrace social media.”
The Financial Brand has assembled a collection of articles and media stories about social media in the banking space. Take a look and see what you think.
Key Takeaway: You need to add a healthy does of skepticism to your diet of social media press. There may be strategic reasons for financial institutions to deploy certain social media tools in some circumstances, but “everyone else is doing it” and “they told me to” don’t cut it.
“Financial institutions are increasingly (albeit still slowly) jumping on the social media bandwagon. They know they must have a presence on Twitter and Facebook, but they have no way of measuring ROI. And they still don’t know how to best use social media sites to communicate with their clients. But they still need to do it.” — Wall Street & Technology
Food for Thought: How many things does your organization undertake simply on a “leap of faith?” Is it typical for your management team to make impetuous business decisions? What will happen if your financial institution doesn’t have a presence on Facebook or Twitter? What’s the downside? Aren’t the risks (or gains) impossible to quantify when there is “no way of measuring ROI?”
“Are financial institutions shooting themselves in the foot? Experts certainly think so, and say that banks lagging in social media adoption are vulnerable to being overshadowed by their faster-moving competitors.” — Finextra
Food for Thought: Who are “the experts?”
“Retail banks have largely remained on the sidelines when it comes to leveraging digital channels.” — Warc
Food for Thought: This is not really true. Retail banking is one of the most active industries in social media today, ranking third in one study. Another study found that 3 out of 4 credit unions are currently using social media.
“Just why have financial institutions been so slow to harness the power of social media to boost their reputations? Fear about losing control over their corporate image may be holding them back, communication experts say.” — Financial News
“Social media is a gift — you have customers freely sharing their thoughts and ideas and needs and their complaints. Organizations should have an enterprisewide social media strategy that involves marketing and the contact center.” — Bank Systems & Technology
Food for Thought: An analysis by The Financial Brand found that, on average, banks and credit unions will only find one person per month talking about them on a social media channel for every $100 million in assets they have. Some organizations (as in “the very largest banks and credit unions”) should apply the resources needed to address consumer issues via social media, but most financial institutions aren’t going to find many — if any — social mentions.
“It seems as though many bank marketers approach social media with a lot of skepticism and fear, rather than embracing the potential opportunities it offers.” — Market Rates Insight
“Banks need to reach out to younger, more web-savvy customers… using the power of social networking and other digital platforms to improve their marketing.” — Brand Channel
“Despite its intimacy, immediacy and credibility, few banks are considering using social media to deliver customer service. Are banks, which have traditionally been less enthusiastic about adopting new technology than other industries missing out on a big opportunity by staying away from the social networking phenomenon? Worse, are they exposing themselves to the threat of retailing giants like…Wal-Mart. If [banks] wait much longer, they may be forced into a situation where a social media presence is no longer optional, but rather an imperative to stay competitive.” — Bank Innovation
“Our social media strategy started as just a foray on the web in order to see what channels were available and then see what we could do from there.” — James Marshall, Marketing Assistant/Plane Saver CU (at Landmark Image)
Food for Thought: Is there any credit union on earth that needs “worldwide exposure?”
“For those in the tech industry that see Facebook as a daunting and large, useless network, I would challenge you to find a more relevant and quicker technology change in the last 10 years. Other than mobile (which goes hand in hand with social networking, by the way) there hasn’t been anything this transformative since the arrival of email or the internet itself. It has fundamentally changed the way we communicate and connect with people.” — Credit Union Times
Food for Thought: Social media proponents frequently mention that there are “500 million users on Facebook.” As impressive as that statistic may be, it isn’t a persuasive argument to get involved with social media. The real question is how many of those 500 million on Facebook are you targeting? How many will you be able to engage with? And how will you go about doing that? What is your message? What are you trying to accomplish? While social media has certainly transformed the way with which people communicate with one another, its impact on B2C communications remains fuzzy for most organizations in most industries.
“Lenders around the world have been slow to embrace social media, mainly because this novel form of communication represents a whole new way of thinking about their business. But one of the biggest challenges that banking faces could become a huge opportunity.” — Business Review
Food for Thought: Social media is a game changer? Forcing banks to reinvent their business models? Really? How so?
“Every bank is already involved in social media, whether that’s part of a conscious strategy or not. Social media is becoming a language of commerce.” — Computer World
“Oddly enough, however, most banks are still reluctant to embrace social media. Those banks not planning to embrace social media will lose competitive ground.” — Market Rates Insight