5 Ways Banks Are Using Social Media

8/6/2019 5 Ways Banks Are Using Social Media

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5 Ways Banks Are Using Social Media

1. Community Building

Banks are not usually known for building warm and fuzzy communities around their productsand services. When we think of banks, we often think of impersonal bankers in pinstriped suitsdenying customers their request for a car loan or a mortgage. The world is changing, though, andeven banks are trying to foster community rather than appear monolithic and imposing. Focusingon customer service and adopting the personality of the people they serve, community banks andcredit unions can really teach the big guys a thing or two about what it means to be close tocustomers. Community building is something that banks should be doing more of because manyof the most important touch points in our lives from attending college, to buying our first carsand building a home, to starting a business and saving for retirement all involve a relationshipwith a bank.

Missouri Bank , known popularly as Mobank , is a financial institution with a cool vibe thatmakes them a natural fit to utilize social media. They serve an eclectic customer base of visionaries and artists ² people known to take chances, and though they have only three

branches, they¶re located in areas where people are invested in the community. They¶re not usingsocial media to ³sell´ anything, but instead utilize social media as a way to build upon thecommunity-minded philosophy that they have spent years developing. Hip, young and cool, the

bank parlays that image on a Facebook Page that acts as an online neighborhood for their customers to interact with each other and the bank ± much like their branches.



³Being a Mobank customer is very much like being part of the µin group,¶´ said Grant Burcham,the bank¶s President and CEO. ³Our customers see each other in business, civic and socialsettings. Those networking opportunities are a great benefit of being a Mobank customer. Asthey embraced social networking, they expected to see us there.´

Mobank did have to consider the reputation management implications of launching a Facebook Page where anyone can post anything about the bank in the public sphere. Ultimately, theydecided that they were confident with their customer relationships and that if someone was going

to talk about Mobank negatively in a public forum, they¶d find a way, but if it happened on aPage that the bank managed, they could respond to any concerns on the spot.

2 . Product Research

Whether you¶re crowdsourcing to find out what customers think of your services or using socialmedia as one tool in your arsenal to enlist customers to help develop new products, a socialnetwork is an undeniably powerful research and development resource.

Social media was a big part of formulating a new and popular type of checking account at 1stMariner Bank . The company¶s marketing department used social media tools to take a look attheir customer¶s needs and used that to build new products and services.

Steven L. Kruskamp Jr., E-Commerce Marketing Manager for the bank, said that the bank askedthrough social networks what was needed most in their marketplace. The bank was able to use



social communications tools and online surveys to develop a financial life cycle for their customers and identify that many people today establish a long lasting relationship with a bank in their late teens. They also found that parents are a major influence in the decision of which

bank people ultimately decide to use. At the time, they didn¶t have an attractive account tomarket to both parents and 18-25 year olds. With more research using social tools, they

identified which features and benefits were important and which combination would give them acompetitive edge.

3 . Customer Service

Social media has become a great customer service tool across many industries and banking is noexception. However, not all banks are so proactive. A study done by the American BankersAssociation found that four out of ten banks polled said that they avoid discussing specific

products and services in their social media efforts.

But for banks that are more active in engaging with their customers over social media channelsabout their products, real-time search can be helpful in addressing problems with customers. Inother cases, a visible Twitter account can be a quick and easy first step in the customer servicechain when people want to get specific information.

Bank of America sees many of the same questions on Twitter that they get on typical channelslike via telephone or in person, according to David Knapp, who runs the bank¶s Twitter account ,



but they are starting to see social spaces as a potential channel of choice for customers to get theinformation they need. However, because of the sensitive nature of banking and the openness of social media, customers need to be careful when sharing information with customer service repson social channels. On Twitter, Knapp regularly takes conversations private using directmessages and from there to more secure communications channels to gather sensitive details.

Though Knapp and Bank of America are now seeing much positive feedback on their Twitter account, when they first opened credibility was an issue. ³When we first entered the space our credibility as a representative of Bank of America was a challenge,´ Knapp said. ³But as we

began to help customers, and social media sites picked up our work, our legitimacy grew.´

As W achovia is absorbed into parent company Wells Fargo, the legacy division at the bank stillcontinues. Tim Collins, the SVP of Experiential Marketing, uses social media not only to serviceWachovia customers but to answer questions about the status of the merger between the two

banks. The bank had been involved with listening on social media for years before they decidedto open a Twitter account, which they use to help customers with questions related to checking

products and online banking. Wachovia has now fully embraced social media as a way to

communicate with customers, even going so far as to create a special set of hashtags for the bank on Twitter.

It took them a couple of tries to get social media right, however. Collins cited one veryinteresting miss in providing customer service through social media for Wells Fargo. Their first

program, called ³Stagecoach Island,´ was piloted in Linden Lab¶s Second Life platform. ³Wequickly realized that our customers would feel more comfortable on a more flexible platform,´said Collins.



4 . Marketing & Promotion

Banks that are using social media to brand themselves or to market a specific product or servicehave found success by integrating social tools into their existing campaigns or creating new onesthat capitalize on the spirit of the community. Whether it¶s by making the bank synonymous withsolid financial advice or giving people the power to do some good in the world, banks have beenfinding that immersive marketing techniques using social media tools have brought solid results.

Jeff J. Gahnz, Vice President of Marketing and Public Relations at Nicolet National Bank realized that as a small community bank, their competition could afford to spend his entiremarketing budget in one week-long campaign. But as he sat in a meeting and listened to the CEOof the bank explain something extremely complex in a matter of five minutes, he wondered howmany people would want to be in that room to hear what he said. They realized that ideas theytalked about in meetings could be shared with others using social media channels, and it would

be a way to create value for customers that required only a small investment. The bank sharesideas and information through its blogs and audio and video podcasts on a community hub calledThe Vault .



Citi is one of the big banks using social media to build a community around its brand. As might be expected for such a large financial institution, different divisions have shown themselves to bemore independent and innovative than the rest. Citi Credit Cards, for example, has launched acampaign that centers on the power of harnessing your Facebook network. Their Make aDifference, One Friend at a Time program combines the friends in your networks and charitablegiving by promising to donate $50 to the charity of your choice for every approved credit cardapplication your refer through your social graph.

First National Bank of Omaha (FNBO), an online-only bank, encouraged customers to utilizethe ease of transferring balances online to maximize the interest they earn on the money in their

bank accounts via an innovative social media marketing campaign called the Pay Yourself FirstChallenge . The campaign helped customers develop a personalized saving plan, and FNBOutilized a number of different social media outlets, including YouTube, Facebook, Twitter,MySpace, iTunes and blogging to get the word out.

The challenge involved five contestants competing to reach a savings goal. The bank recruitedcontestants by having them submit videos via YouTube describing their saving goals, and duringthe competition each contestant blogged about his or her progress. FNBO chose the winner based



on a combination of reaching their goal and online votes. The contest helped to create awarenessfor their brand and showed current and potential customers how they can use FNBO¶s online

banking tools to become more successful savers.

5 . Transparency

The current financial crisis has led many customers to distrust banks, which is one reason whymany banks are now turning to social media as a way to become more transparent to customersand build trust. David Armano, Senior Partner at Dachis Corporation , says that banks are likeevery other institution facing the evolution of the networks and websites providingempowerment to individuals, and that they must adapt to join the conversation. ³Banks alsodealing with trust issues may accelerate that change,´ he said.

Nicolet National Bank has used social media in order to be more transparent, said Jeff Gahnz.The President of their bank answers questions directly on their blog, for example, and they havehelped people with mortgage questions, business loan queries, and general finance questions.They have also blogged their thoughts on the Troubled Asset Relief Program (TARP), where themoney has gone, and why their bank participated.

³Right now, in Washington, the phrase you hear most often with banking and finance istransparency,´ Gahnz said. ³We are leaders in this area because of social media.´



For FNBO , the emergence of social media has allowed for more opportunities to communicatewith their consumers, which is important to them. They understand the benefit of participating inthe conversations that are already happening online, rather than avoiding or attempting to controlthem.

³Banks could potentially miss opportunities to mitigate risk « by choosing not to participate insocial media,´ said a bank spokesperson. ³As a result, we recognize the value of a controlled andclosely managed approach to social media as one of the many ways that we can be transparentwith our customers and prospects.´

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5 Ways Banks Are Using Social Media