In this exclusive Q&A interview, The Financial Brand talks to Sprinklr CEO Ragy Thomas about the role, relevance and ROI of social media in the retail banking industry.
Ragy Thomas is the founder and CEO of Sprinklr, a provider of social relationship infrastructure for some of the largest and most social financial brands around the world. The Financial Brand hit Thomas with 12 tough questions about social media and its relevance to retail banks and credit unions.
1. Why should financial institutions be investing themselves in social media?
Ragy Thomas (RT): Financial institutions should strongly consider becoming socially aware, responsive, and mature. Social has already started to disrupt banking (and many other industries). At the core of this disruption is the connected consumer whose collective “voice” can either render a big bank powerless if not treated properly, or generate ripples of new business if treated in personal and friendly ways. Financial institutions who fail to properly deal with this inbound stream of social conversations and miss the opportunity to build real relationships at scale risk lose out to competitors who do.
What people say about a brand has become more important than what the brand says about itself. When big brands participate in social in meaningful, personal ways to build real human relationships, prospects and customers are far more likely to become advocates who spread positive sentiment across their social networks and, in many cases, defend the brand against detractors.
2. What’s the business case for social media in the financial industry?
(RT): The business case centralizes around five key themes:
1. Risk Mitigation – When done correctly, social media listening can provide early risk indicators and mitigate the impact of crises when they do occur. Socially connected consumers can also avail community intelligence to identify and deal with fraud and phishing attacks.
2. Increased Efficiency – Social can help banks centralize teams and give customers a unified, one brand experience across all channels. Financial institutions can also reduce operational costs by using social networks as an effective way to crowdsource solutions and deal with issues that don’t involve PII (personally identifiable information).
3. Lead Generation – Brands can capture new business leads and revenue opportunities in social that may not surface through other channels. Also, done smartly, financial institutions may discover potential losses before they become apparent through other business channels (i.e., credit card churn).
4. Innovation – Socially savvy banks already using social to learn details about how their customers behave in social in real-time, through social listening, moderation, and engagement are already starting to use that intelligence to plan new products, services, and support.
5. Improved Brand Perception – Quick response to customers on social can help banks improve brand perception and drive long-term loyalty. This is especially necessary as customers continue to adopt a “branch light” banking approach (i.e. seeking out digital resolutions to tasks previously completed in a brick and mortar branch). Using social to nurture those online relationships can lead to real, offline relationships that will be rewarded with greater loyalty, referral, and advocacy.
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What are the biggest challenges facing financial institutions on social channels?
(RT): People now expect every brand to know who they are, regardless of which “division” within the brand they connect with. This paradigm is particularly stressful for financial institutions, perhaps more than any other industry, who typically suffer from “business inertia” — internal departmental, divisional, and locational business groups that typically don’t work together smoothly.
Inter-departmental friction flies in the face of arguably the sharpest disruption social has created — the expectation among consumers for a “unified experience.” Regardless of whether they are talking to a teller at the branch, on the phone with customer service, or tweeting out their frustrations, people want to be recognized and cared for as individuals in a personal manner. This comes into play especially when it comes to the extreme sensitivities associated with financial matters. When internal systems are not aligned and don’t “talk” to each other, and internal divisions are not encouraged or rewarded for collaboration to meet customer expectations, customer satisfaction is likely a difficult goal to achieve.
To truly support the “omni channel customer and journey,” banks have to collaborate across teams, departments and divisions. They need to create new processes, and define “ownership” across the breadth and depth of a person’s entire brand journey. This is unfamiliar territory for most banks, with lots of land mines along the way. Given that the volume and pace of social conversations is only likely to increase in the future, the pressure to quickly put together a solution is acute.
Social can be a powerful lever for nurturing unified relationships and generating long-term, meaningful engagement. Every meaningful social conversation can be nurtured into a real relationship that can, over time, become a direct revenue opportunity, positive word-of-mouth, or direct referral. Used effectively, social can become a cost-effective lead generation and activation channel for banks.
To start, banks need to build a contextually unified profile for every prospect and customer, the foundation of which is a comprehensive conversation history — combining interactions from Facebook, Twitter, LinkedIn, Youtube, etc. With these individual histories, banks will know exactly what has been discussed with each prospect or customer, and will have clear indicators for how to nurture relationships through social interaction.
How can financial marketers establish the ROI of social media?
(RT): ROI can be measured in many ways. For financial institutions, this is achieved in layers:
1. Profile “who’s talking” about the brand in social channels. Capture these conversations, and define social profiles and audience segmentations. As an example, we work with clients to study user engagement over time to understand conversation topic and behavior patterns, which may indicate changes to brand perception, purchase intent, and customer loyalty over time as they are tracked.
2. Calculate goal-based metrics. One example is tracking the number and pace of customer service inquiries. Have calls to the brand’s call center been reduced? Has customer satisfaction with the bank improved?
3. Depending on the availability of other data, match social customer and behavior data with the brand’s other data sources. For example, by matching social audience profiles with the brand’s existing CRM or retail activity data repositories, it’s possible to tie retail banking activity directly to social. Additionally, we can track engagers over time to understand if they are financially more profitable than non-engagers.
Can financial marketers use social channels to sell banking products and services?
(RT): Absolutely. Navy Federal Credit Union, for example, recently ran a Facebook campaign to celebrate their four million members mark. They deployed a campaign that offered lower rates and asked fans to tell personal stories through visual user-generated content posted back to their Facebook page. The campaign generated more than $180 million in new certificates and loans. This example illustrates that social engagement done right can produce directly result in increased revenue.
But our approach is that brands should carefully consider how to market and sell banking products and services. Our experience is that financial institutions who make “friends” first, then “market,” then “sell” typically succeed in engaging more people and building real relationships with them in social.
How do you recommend financial marketers tackle compliance issues related to social media?
(RT): Compliance must be handled with extreme diligence and rigor. Data privacy and security, especially PII (personally identifiable information) is not only a hot topic today, it is arguably one of the key challenges that separates financial services from most other industries. Consumer understanding about their own privacy is in a very early stage, and the issue will remain fluid for many years.
That being said, even in this early stage — when there is a mixed bag of international, national, and even local regulatory bodies and regulations — banks must be proactive in publicizing their absolute compliance. Socially mature institutions are committed to staying in front of shifting regulations and public sentiment regarding data security and privacy.
Do financial institutions need to be involved in every social channel? How do they prioritize?
(RT): We strongly believe that all companies should figure out for themselves which social channels are best suited to meet their needs. There is no one-size-fits-all approach when it comes to being social. Every social channel has its strengths and weaknesses. To select the right mix, a bank should invest in their social identity, define who they want to talk to, and what they want to say. Defining these important steps will help the institution understand which channel is best-suited for engaging people in the right ways.
But isn’t Facebook the only social channel that really matters?
(RT): It would be silly to think that there’s one single channel to serve every brand equally. Financial institutions seeking to build deep, connected roots at the local level, should use a combination of channels that best match their social needs and goals. These may vary by department. For example, LinkedIn serves as a great resource for HR and recruiting departments. Twitter can serve as a news hub, a customer service outlet for non-PII related issues and a great resource to disseminate information during crises. And Youtube remains a great way to share visual “stories.” If a brand is planning to engage internationally, they may need to focus on smaller, target market channels, like Vkontakte in Russia or Hives in the Netherlands.
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Are there any financial institutions using Twitter successfully for anything other than customer service?
(RT): There have been a lot of banks using Twitter to raise awareness around sponsorships, events, and happenings. Barclays #wearefootball campaign is a great example. Here, Barclays is regularly using Twitter to update followers on happenings in the Premier League. No surprise it’s their most-followed handle.
Another example is Citi who uses Twitter to promote their Citi Private Pass partnership with Live Nation, which helps Citi-card-owning music fans find out about ticket pre-sales before the general population. This reinforces the value of the Citi card to customers.
What do you think about auto-responders and other similar bots, particularly on Twitter? Are these “a necessary evil” for big banks?
(RT): Content libraries that empower customer service representatives to answer quickly, rather than leveraging auto-responders, is a more effective approach. Just because you’re a bank doesn’t mean you can’t act more “human.” In fact, most financial institutions are really leveraging these channels to be more personal and intimate. Auto-responders are generally perceived as “robbing” from this opportunity.
Banks need to educate and train internal teams to know to how respond thoughtfully to social messages, and escalate tough questions. It’s not hard — American Express, Citi, and Wells Fargo are all good examples of banks doing this today.
Much of the social media advice offered these days is pointed at big banks. What advice do you have for smaller institutions?
(RT): Regardless of size, financial brands succeed in social by making thoughtful social decisions based on what is best for the customer vs. what is simplest for the bank to execute or what is already familiar protocol. To their advantage, smaller banks suffer from less red tape and may find less friction across divisional or functional business groups, so collaboration can often bring their brands to life through social quickly.
Banks who define their social identities and advocate them consistently and rigorously internally and externally have a much higher likelihood of connecting and engaging successfully in social.
What are the advantages of using a social media management tool like Sprinklr? What size institution is a system like your ideal for?
(RT): The main advantages of using an enterprise social relationship infrastructure like Sprinklr instead of point solutions are that the financial institution can begin to see a unified context of each customer, speak with a unified brand voice, and deliver consistent intelligence and insight across teams, departments, divisions, and locations. This allows them to:
1. Manage risk and compliance, including PII
2. Decrease operational costs via social and community customer service
3. Grow revenue through lead generation, nurturing; increase ROI over time
4. Innovate faster and differentiate the brand among its competitive set
We help financial institutions around the world become better at the ‘doing’ of social — and, over time, mature to ‘being’ social at scale. We help them build personal relationships, at scale. We help the brand be human, which is essential to being social.
Unfortunately, many financial institutions have done the complete opposite; they’ve automated brand-customer interactions. What we’re noticing now is the growing customer desire for one-to-one, personal interactions. They want that personal relationship with their favorite bank teller, who greets them with a big smile — both in person at a local branch as well as in the palm of their hands through their mobile device, wherever they are. Having a connected, integrated social infrastructure can facilitate this kind of unified, personal experience.
Sprinklr was architected to serve the world’s largest enterprises. Over 80% of our clients have more than $1 billion in assets, so we are not the right fit for every company. That being said, every business — big and small — needs to be involved in social. Your customers are on social, and that’s where they’re engaging with you, so you don’t really have a choice.