I have been in the banking industry for many years, spending much of my career helping banks and financial institutions wrangle social media marketing riddles. One trend I’ve noticed: most banking execs feel that regulations are so onerous that they must sacrifice market growth in order to remain compliant.
I couldn’t disagree more.
Tragically, most banks fail to recognize upside of building a powerful social media presence, and therefore do nothing (or almost nothing) — e.g., casting a positive halo on the bank’s brand, bridging a powerful connection between the bank and the community.
Unfortunately there is no such thing as “risk-free”; anything worth doing involves at least some degree of risk. The best banks understand this, learning how to tolerate and manage risks relative to the potential rewards. Now I’m not saying that banks should go ahead and do what they want with their social media marketing efforts — compliance be damned. But they can — and should — pursue social media growth strategies and remain compliant. This only happens when the bank’s internal process focuses on how the marketing and compliance departments communicate with each other.
Nevertheless, because of the highly regulated nature of banking, most banks work from a defensive strategy rather than an offensive one. They want to protect what they have, rather than go out and aggressively pursue what they could gain. But even playing the best defense will only keep you in the game; you can’t win without having a powerful attack as well. This is why many banks have difficulty succeeding in new and emerging marketing channels like social media. Generally speaking, most financial institutions prefer to avoid taking any risk, opting instead for tried-and-true methods of marketing.
What should banks do?
With all the M&A’s coming out about, lack of growth and rising cost of remaining complaint being the main causes of bank failures, banks need to “wise-up” and start working together to create growth. These reports are practically screaming at us as to why things are failing, yet we make no changes. In the words of Tony Robbins, “If you do what you’ve always done, you’ll get what you’ve always gotten.” So what should banks and credit unions do differently?
1.) Banking execs need to understand and accept the importance of social media, and the role it can play in growth strategies. Social media affects so many areas of a banking including recruiting, marketing growth, branding, reputation, m&a’s and most importantly, the culture.
2. Although remaining compliant is a big priority for all banks, everyone should always stay focused on growth.
3.) Financial institutions need to have the best defensive strategies as well as the best attacking strategy.
4.) You’ve got to cultivate the right people who can handle playing both offense and defense. And everyone has to work together, equally as a team, with everyone on the same page.
5.) Make sure marketing has a seat at the table, and put social media down as a line item on the agenda for executive management meetings.