Community Banks Need a Social Media Reality Check

Community banks need to update their social media strategies if they want to see their full value. Investing time, talent and data to upgrade the strategy will help smaller banks get in front of the right customers online.

When Amanda Swanson meets with potential clients, she shows them a slide that lays outt the evolution of marketing. Marketing technology has evolved through seven phases, says Swanson, who is the senior director in the Delivery Channels practice at Cornerstone Advisors. These phases start with more traditional marketing like direct mail and billboards, and ends with a digital experience platform, or DXP.

Right now, the marketing and social media strategies of most community banks and credit unions sit around a phase three, she says. This means that smaller banks are using digital marketing tools and social media to grow their brands, but haven’t yet evolved into next-level marketing like lead generation.

But even though banks are relying heavily on social media to promote their brands, most of the social media strategies of community banks and credit unions leave something to be desired. Nearly all banks (88%) are active on social media in some way, according to a report from the American Bankers Association. But many are not using social platforms as effectively as they should be. A heavy focus on products and services — and an underfocus on thought leadership and community — means that smaller banks could be missing potential clients.

And the Majority Rules:

The percentage of banks with active social media channels:

This is especially true if they want to compete for the eyes of Gen Z and millennials, who are increasingly spending hours scrolling on short form video platforms.

“They’re wanting to be entertained,” Swanson says. “If it’s boring they’re not going to listen to you. That’s where I would say that I see a lot of financial institutions, they’re kinda boring.”

But that also doesn’t mean that marketing teams should jump on the latest TikTok trend, experts say. Instead, banks need to develop more malleable strategies that can adapt with the times and build audience engagement in the areas that matter most.

Invest in Talent to Lead the Social Media Strategy

One big issue that is impeding the progress of many community bank’s social media strategies, is that upper management isn’t always totally sold on its value, Swanson says.

“I think the struggle is finding individuals who can help the executive team understand the importance of social media,” she says. “Not all but, I think some executive teams feel like it’s a marketing tactic and there’s a risk to social media.”

These reasons are not totally unfounded, however. Many bank executives are concerned about security threats and reputational damage that can come with social media overuse. But simply not having a presence online is also a risk to the longevity of the business.

Instead, banks need to lean into social media by creating smart strategies. This involves investing in talent that can help improve the social media plan. These workers will set the tone and direction for the brand’s online voice, and work closely with teams internally to develop a strategy that makes the most sense for the bank.

It may also be useful to start a social media committee, or a group of employees from a variety of teams who collaborate on the social media policy, Swanson says. HR, for example, could help to set clear directives on how employees can post on their personal accounts.

“There needs to be a social media committee,” Swanson says. “You’re bringing people in at a bank or credit union who think about compliance. I want HR sitting on that committee in regards to the dos and don’ts that employees should or should not do on social media.”

Read more:

Engage with the Local Community Online

A major pitfall that community banks face when it comes to social media is spending too much time marketing new products, and not enough time engaging with the community. Products and services can be part of the conversation, Swanson says, but it shouldn’t be a big part. Only about 20 percent of all social posts should be related to products and services.

Instead, focus on engaging with the local community. Smaller banks will see the greatest value on social media by interacting with niche audiences locally that are most likely to either be, or become, customers.

“It’s about being in the community,” Swanson says. “The events they’re doing face to face will be amplified into the digital channel.”

Posts that get shared more widely on any social media platform are usually ones that highlight a particular individual and their work. People like to see other people on their social media feed, says Erika Lovegreen, senior vice president of marketing at ICUC, a Dentsu agency that works with banks including Goldman Sachs and JPMorgan Chase.

“There needs to be a social media committee. You’re bringing people in at a bank or credit union who think about compliance. I want HR sitting on that committee in regards to the dos and don’ts that employees should or should not do on social media.”

— Amanda Swanson, Cornerstone

“Tagging employees where appropriate, or showcasing some of the work that individuals are doing, people want to see people,” Lovegreen says. “When people see themselves or see their friends out there in the community, they’re more likely to share that, they’re more likely to engage.”

Social media should be an investment that amplifies the work of the organization, Lovegreen says. Talk about the programs or opportunities the bank provides in the local community, and you’re more likely to catch the everyday person’s attention. One way banks can do this is through thought leadership, Lovegreen says.

“It’s about finding trends or specific topics where they can bring a sense of thought leadership to the table,” she says.

Dig deeper: Social Media Strategies for Financial Institutions [Webinar]

Should Banks be on TikTok?

While social sites like Facebook and X, formerly Twitter, have been around for decades, platforms like TikTok are newer territory. Some business leaders have raised concerns over the security of TikTok, in particular, which is owned by the Chinese company ByteDance.

Yet, some fintechs are already embracing the platform. The fintech Cash App, for example, has garnered more than 726,000 followers.

But should the average community bank rush to set up an account? Like any social media platform, it depends on if your customers are using it, Swanson says.

For example, Lili, a business banking tool for freelancers, often posts on Pinterest, Swanson says. Most banks probably don’t need a Pinterest account, but for Lili, which is trying to attract freelance creatives like graphic designers, it’s a smart marketing move, she says. If you’re looking to attract the business of a younger demographic, short-form video platforms like TikTok or Instagram Reels may be the way to go.

But banks should proceed with caution, Lovegreen says. Start by taking stock of what others in the industry are posting. Read conversations that are happening on these platforms, and think about how engaging could impact the business.

“Learn what your audience is saying about you today, understand key themes,” Lovegreen says. “Once you develop a better understanding of your audience, you’ll have a better sense of the content you should be creating.”

Caroline Hroncich is a freelance business journalist based in New York. She writes about workplace trends, HR, personal finance, banking, and more. Her work has appeared in MarketWatch, Business Insider, Employee Benefit News, the Society for Human Resource Management, and Cannabis Wire.

This article was originally published on . All content © 2024 by The Financial Brand and may not be reproduced by any means without permission.