Banking and social media

INDEX * Introduction- pg 3-11 * The why and how of social media w.r.t banking- pg 12-24 * International and Indian Examples of social media- pg 25-28 * The grey side of social media usage- pg 29-30 * Suggestions- pg 31 * Conclusions- pg 33-34

Introduction
Social media and banking do not seem to have a strong relation at the first look on the topic, but are indeed complexly related in today’s world with the continuous evolution of the banking sector and the huge impact of social media on the masses. While today many international banks are using social media as a connectivity and marketing tool with its customers, Indian banks are also not far behind. ICICI, one of India's biggest banks, already boasts a Facebook app allowing clients to view their account details, check statements and upgrade their debit card, among other activities, but still maintains a cautious attitude to social media strategy.
While there is no doubt that social media is all the rage amongst retail and advertisings sectors, it is yet to make major inroads in the financial services and banking sectors. A new report from Ovum, the technology arm of market analyst firm Datamonitor reveals that a majority of banks worldwide aren’t yet ready to embrace social media.
Privacy and Data Security are two of the biggest hindrances to mass-scale social media adoption in the banking sector. Moreover, many banks do not think social media gives them an edge to engage customers. In fact, they believe that it’s a dangerous proposition which may compromise sensitive financial data .Startling as it may seem, the recent Ovum research indicates that 60 per cent of the world’s retail banks have no plans to use social media in the future. There are noticeable exceptions though – UK’s First Direct, Australia’s NAB, Wells Fargo in the US and Rabobank in the Netherlands have adopted social media as a communication channel.
While American banks mostly rely on Twitter, Australia’s NAB used YouTube and Twitter to pacify disgruntled customers after its online banking system fell over. And going by the encouraging response received so far, the move appears to be fetching the desired results. 14 per cent banks currently use social media as a marketing tool, with a further 12 per cent planning to use it to promote their business by the end of 2012.
Some challenges which the sectors might face are as follows: The banking sector relies on sensitive financial data all the time. Though Facebook has made several changes to its privacy norms over the last couple of years, a lot more needs to be done in order to simplify who gets to see what information. Perhaps, a different set of privacy controls for banks and financial institutions would help. Given the current situation, it’s unsurprising that most banks prefer Twitter over Facebook as the former has virtually no privacy vulnerabilities.
The Ovum report indicates that social media offers a massive untapped opportunity for financial institutions. Consumer confidence in the banking sector has hit an all-time low and a personal touch of social media would serve as a perfect shot in the arm to lift the struggling global financial industry.
Before we plunge into this fast deepening relation between social media and banking, let us first understand some basic concepts about banking and social media separately.
Banking
Under the Central Government Act,
Section 5(b) in The Banking Regulation Act, 1949
(b) " Banking" means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise;

In general, a bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets. A bank connects customers who have capital deficits to customers with capital surpluses.

Due to their influence within a financial system and an economy, banks are generally highly regulated in most countries. Most banks operate under a system known as fractional reserve banking where they hold only a small reserve of the funds deposited and lend out the rest for profit. They are generally subject to minimum capital requirements which are based on an international set of capital standards, known as the Basel Accords.

Standard activities

Banks act as payment agents by conducting checking or current accounts for customers, paying checks drawn by customers on the bank, and collecting checks deposited to customers' current accounts. Banks also enable customer payments via other payment methods such as Automated Clearing House (ACH), Wire transfers or telegraphic transfer, EFTPOS, and automated teller machine (ATM).

Banks borrow money by accepting funds deposited on current accounts, by accepting term deposits, and by issuing debt securities such as banknotes and bonds. Banks lend money by making advances to customers on current accounts, by making installment loans, and by investing in marketable debt securities and other forms of money lending.

Banks provide different payment services, and a bank account is considered indispensable by most businesses and individuals. Non-banks that provide payment services such as remittance companies are normally not considered as an adequate substitute for a bank account.

Products
Retail banking

* Checking account * Savings account * Money market account * Certificate of deposit (CD) * Individual retirement account (IRA) * Credit card * Debit card * Mortgage * Home equity loan * Mutual fund * Personal loan * Time deposits * ATM card * Current Accounts
Business (or commercial/investment) banking * Business loan * Capital raising (Equity / Debt / Hybrids) * Mezzanine finance * Project finance * Revolving credit * Risk management (FX, interest rates, commodities, derivatives) * Term loan * Cash Management Services (Lock box, Remote Deposit Capture, Merchant Processing)
Economic functions

The economic functions of banks include: * Issue of money, in the form of banknotes and current accounts subject to check or payment at the customer's order. These claims on banks can act as money because they are negotiable or repayable on demand, and hence valued at par. They are effectively transferable by mere delivery, in the case of banknotes, or by drawing a check that the payee may bank or cash.

* Netting and settlement of payments – banks act as both collection and paying agents for customers, participating in interbank clearing and settlement systems to collect, present, be presented with, and pay payment instruments. This enables banks to economize on reserves held for settlement of payments, since inward and outward payments offset each other. It also enables the offsetting of payment flows between geographical areas, reducing the cost of settlement between them. * Credit intermediation – banks borrow and lend back-to-back on their own account as middle men. * Credit quality improvement – banks lend money to ordinary commercial and personal borrowers (ordinary credit quality), but are high quality borrowers. The improvement comes from diversification of the bank's assets and capital which provides a buffer to absorb losses without defaulting on its obligations. However, banknotes and deposits are generally unsecured; if the bank gets into difficulty and pledges assets as security, to raise the funding it needs to continue to operate, this puts the note holders and depositors in an economically subordinated position. * Asset liability mismatch/Maturity transformation – banks borrow more on demand debt and short term debt, but provide more long term loans. In other words, they borrow short and lend long. With a stronger credit quality than most other borrowers, banks can do this by aggregating issues (e.g. accepting deposits and issuing banknotes) and redemptions (e.g. withdrawals and redemption of banknotes), maintaining reserves of cash, investing in marketable securities that can be readily converted to cash if needed, and raising replacement funding as needed from various sources (e.g. wholesale cash markets and securities markets). * Money creation – whenever a bank gives out a loan in a fractional-reserve banking system, a new sum of virtual money is created.

Laws Related To Banking In India
1.1.Reserve Bank of India Act, 1934
1.2.Banking Regulation Act, 1949
1.3.Negotiable Instrument Act, 1881
1.4.Consumer Protection Act, 1986
1.5.Limitation Act, 1963

Social Media Social media employ web- and mobile-based technologies to support interactive dialogue and “introduce substantial and pervasive changes to communication between organizations, communities, and individuals.” Social media are social software which mediate human communication. When the technologies are in place, social media is ubiquitously accessible, and enabled by scalable communication techniques. In the year 2012, social media became one of the most powerful sources for news updates through platforms such as Twitter, Facebook, and Google+. Classification of social media Social media technologies take on many different forms including magazines, Internet forums, weblogs, social blogs, microblogging, wikis, social networks, podcasts, photographs or pictures, video, rating and social bookmarking. By applying a set of theories in the field of media research (social presence, media richness) and social processes (self-presentation, self-disclosure) Kaplan and Haenlein created a classification scheme in their Business Horizons (2010) article, with six different types of social media: collaborative projects (for example, Wikipedia), blogs and microblogs (for example, Twitter), content communities (for example, YouTube), social networking sites (for example, Facebook), virtual game worlds (e.g., World of Warcraft), and virtual social worlds (e.g. Second Life). Technologies include: blogs, picture-sharing, vlogs, wall-postings, email, instant messaging, music-sharing, crowdsourcing and voice over IP, to name a few. Many of these social media services can be integrated via social network aggregation platforms. Social media network websites include sites like Facebook, Twitter, Bebo and MySpace. Mobile social media Social media applications used on mobile devices are called mobile social media. In comparison to traditional social media running on computers, mobile social media display a higher location- and time-sensitivity. One can differentiate between four types of mobile social media applications, depending on whether the message takes account of the specific location of the user (location-sensitivity) and whether it is received and processed by the user instantaneously or with a time delay (time-sensitivity).

* Space-timers (location and time sensitive): Exchange of messages with relevance for one specific location at one specific point-in time (e.g., Facebook Places; Foursquare) * Space-locators (only location sensitive): Exchange of messages, with relevance for one specific location, which are tagged to a certain place and read later by others (e.g., Yelp; Qype) * Quick-timers (only time sensitive): Transfer of traditional social media applications to mobile devices to increase immediacy (e.g., posting Twitter messages or Facebook status updates) * Slow-timers (neither location, nor time sensitive): Transfer of traditional social media applications to mobile devices (for example, watching a YouTube video or reading a Wikipedia entry) Mobile social media can also be used on the go when one is not near a personal computer, lap-top...etc. With all the new devices that are arriving at our finger tips, gadgets such as tablets, iPods, phones, and many other new products, there is no use for sitting at home using ones PC; mobile social media has made other sources of internet browsing obsolete, and allows users to write, respond, and browse in real-time. New media of social networking such as "Instagram" allows the world to interconnect and makes space and time much smaller. Instagram allows individuals to snap a photo wherever they may be and share it with the rest of the world instantly, delivering a social media site full of foreign accomplishments and strange scenarios. This feature was introduced by Facebook and other existing social media sites, Instagram is a recent addition to the social media scene, and has made picture sharing much easier. Mobile social media is a relatively new platform since it is contingent on mobile devices' ability to access the Internet. There are various statistics that account for social media usage and effectiveness for individuals worldwide. Some of the most recent statistics are as follows: * Social networking now accounts for 22% of all time spent online in the US. * A total of 234 million people age 13 and older in the U.S. used mobile devices in December 2009. * Twitter processed more than one billion tweets in December 2009 and averages almost 40 million tweets per day. * Over 25% of U.S. Internet page views occurred at one of the top social networking sites in December 2009, up from 13.8% a year before. * Australia has some of the highest social media usage in the world. In usage of Facebook, Australia ranks highest, with over nine million users spending almost nine hours per month on the site. * The number of social media users age 65 and older grew 100 percent throughout 2010, so that one in four people in that age group are now part of a social networking site. * As of May 2012 Facebook has 901 million users. * Social media has overtaken pornography as the No. 1 activity on the web. * In June 2011, it was reported that iPhone applications hit one billion in nine months, and Facebook added 100 million users in less than nine months. * If Facebook were a country it would be the world's third largest in terms of population, larger even than the US. * In June 2011, it was also reported that U.S. Department of Education study revealed that online students out-performed those receiving face-to-face instruction. * YouTube is the second largest search engine in the world. * In four minutes and 26 seconds 100+ hours of video will be uploaded to YouTube. * One in six higher education students are enrolled in an online curriculum. * In November 2011, it was reported Indians spend more time on social media than on any other activity on the Internet.
A brief overview of Indian banks-Pictorial statistics Facebook

Twitter

The Why and How of Social Media w.r.t Banking
Why Social media matters to Banks?
Whether a bank’s ultimate goal is enhancing its brand, reducing costs, increasing customer satisfaction, boosting innovation ,or driving revenue ,social media can be a valuable pursuit.
Enhancing the brand
Social media can play an important role in differentiating brands and making them more relevant to consumers. Much of its power in this regard derives from the fact that in a consumer’s mind, the most credible spokesperson a company can have is a “person like me.” In fact, research shows that the number of people who trust such a hypothetical person more than they trust brands or organizations increases around the world each year.
How can banks take advantage of “people like me?” American Express, for one, created OPEN Forum, an online community dedicated to connecting businesses with each other and providing valuable content to customers with which the company wants to have relationships. Today, OPEN Forum has more than 10,000 businesses involved, monthly traffic has reached as high as 1.5 million visits,5 and the majority of content is produced by the community.
The result is a new touch point that drives brand affinity, provides American Express with an immense opportunity to create brand impressions, and gives the company a chance to be at the center of important conversations among its customers.
Reducing Costs
Social media can be a major contributor to banks’ ongoing cost reduction efforts, especially as they pertain to service, sales, and marketing. For instance, banks can use social media as a low-cost channel to distribute messages, host conversations, provide customer service, identify dissatisfied customers, and increase the impact and reach of traditional media efforts.
Consider Bank of America, which was the first and largest bank in the world to use Twitter for customer service. The bank uses a dedicated Twitter page on which a wide variety of real people—with their actual photos— help customers solve their issues. User feedback reveals the sentiment among customers that receiving help through this page is easier and faster than traditional customer service. In addition to driving customer service costs down, the page creates brand impressions across consumers’ social graphs, thereby allowing other consumers to see the value of the channel for a variety of goals.
The channel also can enhance the impact of marketing. Consider, for example, how Discover Bank recently created a Facebook identity for “Peggy,” a character from its popular series of TV ads. Today, that character is “liked” by nearly 9,000 consumers, and interacts with them several times a day. Such campaigns create millions of additional brand impressions inside of Facebook, as well as new opportunities for brands to interact with their customers in a low-cost format.
Creating and improving innovation :
Banks can use the channel to create better, more innovative products and services that reflect real-time consumer demand. Chase, for example, created an online community of mass-affluent consumers and tasked the group with designing a credit card purpose-built to their specific wants and needs.
The result: its highly successful Chase Priority Club Rewards card. Chase also created a Community Giving program that allows consumers to direct the bank’s donations to specific charities. As of this writing, that community had directed more than $5 million to 100 local charities. Through this initiative, Chase’s philanthropic entity is opening up its decision-making to crowds and involving millions of people in the process Increasing revenue While the use of social media to drive revenue within banks is still in its infancy, results from other industries further along the growth curve are encouraging. Avis, for example, has been able to use a variety of coordinated social media efforts to boost its sales by 9 percent—in a competitive, commoditized industry with flat or declining revenues.
As an example of a more specific and successful effort, USAA, a financial services provider for members of the US armed forces, allows site visitors to rate products like auto insurance or home equity lines of credit and add a written review. In fact, USAA customers have added thousands of reviews to products, and consumers have responded strongly: In the first year of adding product reviews to the site, USAA claims incremental sales of over 15,000 products. This tactic clearly shows a direct impact on growth and demonstrates the value of “people like me.”
In both cases, using social media to unlock increased revenue requires firms to focus on fundamentals. Providing service that customers want to talk about and delivering products that are worth recommending. Once those conditions exist, the chance of successfully using social media to drive revenue goes up exponentially.
A uniquely challenging industry
For many banks, all of the examples in the world are not enough to get off the starting blocks.
Typical challenges include:
• External communications are strictly governed by a host of rules and regulations that limit what they can and cannot say.
• Banks must observe strict rules regarding consumers’ personal information and data security.
• Sanctioned employees, whether from customer service, marketing, or another functional group, must be knowledgeable about products, services, rules, and how to get things done within the bank—and they must be mature enough to make decisions and craft responses to difficult questions.
Plus, all this must be done within the strict legal and regulatory framework that banks inhabit and occur within real time in order to be effective.
For many banks, technology itself is a major concern when it comes to implementing a social media strategy. Banks must identify and implement the tools they will need to be active in social networks, from simple listening platforms to sophisticated tools that enable the integration of social media with legacy CRM systems, customer service tools and workflows, reporting and record keeping requirements, and overall marketing analytics.
Finally, some banks will need to overcome a lack of organizational structures and in-house talent to derive full business value from social media. More specifically, many banks may find they have to close talent gaps and bridge internal divisions between product-oriented teams, all while gaining senior leadership support for a company-wide approach to social media. This is no small task, especially given the fact that most senior leaders are not well-versed in social media.
A path toward social media mastery
While the preceding paints a picture of industry-wide challenges, there is a path that banks can use to begin their social media journey. It starts with gathering critical knowledge that will guide the development of their strategy and assure positive outcomes.
To begin, banks must strive to understand what their customers, prospects, and competitors are discussing online, as well as the social technologies that seem most relevant. This includes developing profiles of how various customer segments actually use social technology and understanding the practical implications of those uses.
For example, strategies for student loan customers may vary widely from those designed for private wealth management clients in areas of execution, content, and technology.
Banks also must assess their current social media capabilities and activities: All too often there are separate, potentially conflicting social media initiatives under way, as well as underutilized technology, insights, and experience. Banks must begin to consider their collective presence versus that of individual lines of business. Consumers don’t make those distinctions, and neither should banks.
It is critical for banks to get a firm grasp on what competitors are doing in the social media space, and where “white space” exists. Bank of America, American Express, and Chase all have done this with their respective social media efforts, but that does not mean no space is left to establish a presence.
To find this space, banks have to ask two questions of themselves : What can we deliver to our customers that we don’t offer today, and how will it provide them with value?
Social media sponsors must critically review risk. Specifically, they must identify specific social media concerns, assess their likeliness, and establish processes to handle adverse events.
Prior to involving senior management, it is necessary to have answers to these questions, examples of how others have navigated similar waters, and concrete ideas on the trade-offs between risk and reward.
And as mentioned earlier, banks must establish clear business objectives and map them to specific areas in which social media can generate value. All of the above becomes a moot point if efforts are not driven by real business goals. By addressing each of the preceding areas, social media teams can build senior leadership support for and sponsorship of overall social media efforts. In Accenture’s experience, successful initiatives typically involve one or more executives with deep passion for and experience with technology and social media. It is crucial to find and engage these people and use their influence to open the eyes of the broader C-suite.
Crafting a Social Media Strategy
All of this work will prepare banks for the successful development and implementation of a comprehensive social media strategy.
To be effective , such a strategy must encompass the following areas:

Crafting the Vision:
With an overarching framework in place, social media can be designed from the ground up , versus as a collection of disparate tactics .It also can focus on a specific segments and experiences, as well as on the necessary internal ‘piping’ to implement social media connections across channels. Indeed, every good customer experience is carefully designed and good social media experiences must follow suit.
Defining and Measuring Success :
A Bank’s Social media strategy must encompass well-defined metrics that reflect progress toward the bank’s business goals ( as defined in the vision).
However, first and foremost , they must align with the same type of metrics that drive business today .
For Example, a social media strategy focused on sales as an outcome should look at driving traffic from social media, converting that traffic into leads, and successfully cross-selling and up-selling customers that are interacting across social media channels. In effect, viewing the efforts through the same eyes that traditional channels evaluate success.
Governance:
A social media strategy should include clear governance and effective organizational structures, whether that means establishing a dedicated social media center of excellence or appointing social media champions across the bank’s functional groups and/or product lines. Regardless of the specific measures or structures in place , the bank’s goal should be to support efficient , effective engagement in social media with the right skills, staff, and controls . this Structure must be nimble, include processes for iteration ,and have senior leadership included.
Technology:
Perhaps counter-intuitively, it is only when the vision, metrics , and organizational structures have been defined that the bank should start thinking about technologies and the tactics they dictate. Banks Should start with basic learning and listening platforms that allow them to “test the waters” and identify areas of potential engagement, and then progressively integrate that platform with existing CRM tools to achieve a single view of customers. Banks must also consider what technologies are appropriate for record keeping and adherence to the policy.
Recognizing that not all starting points are the same:
The level of Social Media experience that a bank has plays an important role while crafting a social media strategy. The scope of the social media strategy depends on the relative social media maturity of the bank. The strategy used by a bank that has significant experience in social media will differ in some aspects from the strategy used by a bank which is new to social media.
Banks with less experience in Social Media: The social media strategy used by the banks with no or relatively less experience in social media should address the following questions: * They should pay attention to the scope in terms of the functional areas covered by the strategy, important business goals, and the business processes used to achieve those goals. * They should also focus on building engagement among key stakeholders and assessing their willingness to participate in the initiative This is as much about creating an initial “coalition of the willing” as it is about telling a compelling story on how social media can positively impact business results. * They should also learn from lean on agency partners and others that have been through the fire before.
Banks with significant experience in Social Media: The social media strategy used by the banks with significant experience in social media should address the following questions: * The Social media champions within these banks must know when it is time to seek help from inside and outside the firm. This is needed because the expanding range of social media analysis and reporting will begin to overwhelm marketing staff and merits the involvement of dedicated analytical and technical staff. * As these banks begin to expand the use of social media across product lines, they have to design governance models that can keep pace, as well as focus on integrating social media technologies with CRM systems to achieve a truly holistic view of cross-channel, multi-product customers.
Successful Integration of Social Media into the Operations:
Banks that have been successful in integrating social media into their operations often have grass-roots efforts to thank. These banks have passionate leaders who have led social media efforts for individual product or service lines. The key to moving beyond grass roots and getting the entire organization pulling in the same direction is actively engaging senior leadership. Only then will the full brand-building power of social media truly be realized.
How banks use social media
According to the survey conducted by MHP Communications amongst the heads of communications and public relations specialists at more than 35 global banks to gain an understanding into social media habits across the banking industry. In broad terms, use of social media is high with the majority of respondents (53%), using social media both in a private and a business capacity. 30% use social media outside of a work context and 3% for business purposes only. 15% of all respondents do not use social media at all, which is a high percentage given that social media generally sits under the communications department’s remit. Whilst social media has become a mainstream activity, it is notable that more respondents use social media for personal means than in a business context.
When looking at the purpose of social media, it is widely seen as a good source of information on what is happening in the media (75% of respondents). Interestingly it is less seen as a direct route to the customer, but more to communicate broadly and advertise products and solutions: More than two thirds say they use social media for communications and public relations purposes, whereas 42% use it for marketing and sales activities. Customer service is a key purpose for 25% only.
In the retail banking sector social media has a more established footprint than in the investment banking world. This follows the logical conclusion that for customer service and customer engagement purposes the mass consumer market is appreciative of being able to communicate with banks through these new, yet very much established platforms. And banks are increasingly keen to appear more customer-friendly whilst tackling the image the sector has as consisting of traditional and staid organizations.
In the investment banking world social media takes on a different purpose, and has even become a platform to be feared and avoided. It is also not seen as a traditional direct route to clients. This is changing however, and one senior PR manager commented that the bank’s trading desk recently received a client request for traders to be given access to Twitter to monitor and engage with client comments throughout the trading day.
The use of social media within the internal communications function is relevant for around one third of respondents (36%) – which represents a vast untapped potential given the range of opportunities to share knowledge and information internally that social media creates. Free tools such as Yammer, Twitter with protected tweets or Google+ with individual circles make information available only to a selection of people, so they can be used to streamline internal communication processes. However, and this is a key problem for a heavily regulated industry such as the banking sector, social media platforms are provided by external third parties. Any shared data which is of a sensitive or confidential nature will in many cases be stored on the provider’s servers which may not provide sufficient protection or peace of mind for the banking sector.
Most providers are based in the US where legislation may, under certain circumstances, require them to reveal their clients’ identities or other data. Also, social media platform providers are commercial operations and there is the risk that data is misused, misplaced or falsely allocated. Many banks feel that sensitive data should only be stored and transmitted on their own infrastructure to ensure full compliance. At the same time, regulatory bodies such as the Financial Services Authority (FSA) in the UK aim to make social media more widely user-friendly for banks by publishing guidelines and recommendations. As a consequence there is a high level of insecurity as to what can and cannot be done.
Despite these issues, social media is now seen as forming a strategic part of a communications program rather than representing solely a tactical activity, with 84% of banks now having a specific social media strategy. Nearly one third has started to execute a strategy, and 15% have a fully developed strategy in place. More than 40% are currently in the process of creating a strategy, and only 16% have not started thinking about or have decided not to have a social media strategy in place.
A number of banks do have a social media strategy, but no defined goals for the strategy: 27% responded that they have not established specific goals for their social media strategy. Measuring the success of a social media program is perceived to be more complicated than for traditional PR which may explain why metrics and, in effect, goals remain vague.
Why banks use social media
For the majority of banks, social media is about building awareness with customers (63%) and creating visibility with partners and investors (55%). Nearly 50% see social media as an extended PR tool or one that should help strengthen relations with the (traditional) media. This shows a sound understanding of the influence social media has in a communications environment. There are now thousands of journalists in the UK using Twitter and Facebook, and both have recently launched official guides for journalists. It has become increasingly common over recent years for traditional media such as print publications, TV and radio stations to mention blogs and bloggers, or to quote tweets. In addition, Twitter, Facebook and Google+ are additional channels to engage in a direct dialogue with journalists. This enables banks to interact and offer spokespeople for commentary and background information, invite journalists to events and retweet or “like” their status, thus building on existing personal relationships.
For 46% of banks, social media is about attracting talent. Many employers now seek their employees purely on platforms offering direct contact, such as LinkedIn, where potential candidates can be easily identified and filtered. 45% want to use social media to raise their profile across the board, and 36% aim to generate direct sales. Success stories such as Dell’s increase in sales through Twitter - which was tracked by directing users to specific URLs - may not be easily replicable in the banking industry. But they demonstrate how a well planned and executed strategy can have a measurable positive impact.
Around one third of bank respondents agreed that social media would help them with, and pre-empt their need for, crisis management activity. This seems a fairly low figure given the high level of uncertainty in the industry and the real-time impact that a statement on Twitter could have in stopping the rumor mill grinding and contributing to a downward impact on share prices, for example. Whilst it may not replace traditional routes of communication, social media can certainly supplement them. Any direct engagement can be beneficial in a crisis situation, and those banks already doing so have taken an important first step which they can use to improve their crisis management strategies and processes.
Nearly all banks think that social media gives their corporation a competitive edge. 55% said they can respond more quickly to enquiries and market rumors, and 48% said they can engage with journalists and traditional media more easily. 41% think social media is an effective way to deal with skeptical customers. For one respondent, social media is a good way to deal with happy clients, therefore creating an additional channel to strengthen the customer relationship rather than a route only to be used in times of crisis.
However, a quarter of respondents think that the impact of social media is limited, and several also cited loss of control as an issue. As one respondent put it, “social media are much less scrupulous about the truth, hence [it is] much more difficult for PRs dealing with unsecured rumors that crop up on blogs”.
Loss of control and regulation as barriers
When it comes to perceived barriers to banks further engaging with social media outlets, 52% mention regulatory issues, whereas 40% cite time and budget constraints as the main obstacles. 36% say that social media does not naturally fit in their current organisation structure and requires additional resources to create and curate content. 12% said they do not know how to identify “real” customers within social media platforms so they cannot properly engage with them.
The loss of control over the message and story however is the main concern for communications professionals at banks (56%). Another 20% said that their greatest fear is social media platforms taking content out of context. This brings to light a dilemma for communications professionals. Most of the time a press release is re-written by a journalist working for a traditional publication as they add their own take on the story, and a live TV interview may lead to unexpected questions from the interviewer. In other words, there is no full control over the message in the traditional communications business, and this is similar to social media activity. Most bloggers adhere to journalistic conventions, and the ones that do not and take stories out of context are usually regarded to be irrelevant. Bloggers need to work according to journalistic standards if they want to build a trustworthy reputation. This in turn is necessary if they intend to monetise their work. In most cases the loss of control in social media seems to be a perception rather than a fact based on personal experience.
Loss of control can also be caused by unclear messaging guidelines or employees breaching security policies. Strict guidelines regarding the use of social media are common in banks, and social media is generally banned from desktops completely: “Not everyone in the organisation has access to social media; it is granted only to those whose job requires it.” This may however stifle innovation and prevent banks from adopting new technology. According to recent research by internet security company Clear swift, 18% of employees would be de-motivated by a stricter policy on social networking introduced by their employers, and 19% would try to work around the rules. 4% would even consider leaving; indicating that many employees have now become fully accustomed to using social media as a means of sharing information and data, and feel entitled to access it.
The vast majority of banks (73%) think that compared with other industries they are behind but catching up in their social media engagement and activity. 13% of banks think this is the case because social media is not relevant to their business, and 13% think their social media engagement is not really different to other industries. No bank thinks they are doing a better job than most, reflecting the cautious attitude and insecurity towards social media that is deep-seated within the industry. Asked for the reasons why banks have fallen behind, one communications expert said that the US is ahead of the curve as there are whole teams handling interaction with social media, but it’s less relevant in Europe. According to another PR specialist, “we have regulatory restraints other industries do not have. We’re behind mainly because of regulation.”
These concerns are not necessarily perceived as insurmountable obstacles: “We’re less advanced because social media policy is generally driven by a very risk adverse compliance structure and culture”, said one senior head of communications. Actually, 50% of banks are either fully aware or have at least a basic understanding of regulatory requirements, whereas 27% said they are aware that there is regulation but they are not sure what it looks like and how it affects them.
Against this background it is surprising that 35% think that the industry is under-regulated. Regulation is already seen as a barrier as it requires additional resources to understand the different requirements, track frequent developments and to make sure everyone in the organisation uses social media in compliance with the relevant rules. The demand for more regulation shows that existing guidelines do not sufficiently clarify what can or cannot be done in the social media sphere, and that there is a need for action. It also means that banks are prepared to invest more in additional resources if this ensures they are compliant. Only 23% think the level of industry regulation is well balanced, and for 8% the industry is over-regulated.
Keeping an eye on digital conversations
Nearly one third of banks (31%) say that there is little conversation about them or issues of relevance to their organisation taking place on social media sites. This is a surprisingly high figure, and either indicates that the visibility of banking brands across social media outlets is low, or that banks fail to fully engage with their stakeholders. In addition, 27% said that there are ongoing digital conversations about them, but that they are not actively involved in engaging in these conversations. 15% said that they are well discussed and referenced in ongoing social media conversations. A very active 4% said that they drive most of the social media conversations about their brand themselves – which requires a social media strategy including tactics, metrics for evaluation as well as monitoring infrastructure.
When asked how they monitor online conversations, 39% of respondents referenced Google alerts, which is a surprisingly low figure. Google is apparently not seen as an appropriate tool to efficiently monitor online conversations, but rather as one to get an overview of a brand’s online mentions. Given the free and real-time nature of Google alerts this is one avenue that the banking sector should investigate as an easy method of monitoring online mentions. 27% use free tools such as Social Mention, feed readers or Twitter’s search function, and 11% and 12% respectively use paid-for tools such as Radian6 or proprietary in-house technology. 23% have outsourced the monitoring of online conversations to their PR agency, whereas 15% do not currently monitor conversations in the digital space at all. Also, nearly one fifth (19%) do not know whether and how their corporation monitors conversations. This is a very high figure given that the communications function needs to be up to speed on where their brand is mentioned so they can react and influence messages.
A combination of free, paid-for and proprietary technology can help to provide a detailed insight into online mentions which can be aggregated and displayed in the most effective way. 79% use their own brand and/or company name(s) for online monitoring, and 73% track mentions of the issues related to their companies. 59% search for names of their own key staff and 56% for their competitors. Only 8% monitor names of key staff at competitors. Respondents also mentioned they search for key deals, key journalists, products and services offered by their company and industry-relevant keywords.
The importance of media outlets
When asked which platform has the most impact on their brand, the results are clearly the ‘traditional’ media. Mentions in traditional media are - still - seen amongst the banking community as more important than digital coverage or online conversations. For the majority of respondents, print coverage in national newspapers such as the FT has the highest impact on their reputation and brand. For one senior communications manager, “a printed article in the FT is more important than anything else – this is different for other audiences though.” A broadcast mention in a TV or radio show has the second highest rating. Print coverage in relevant industry trade publications comes third, followed by a mention on an influential blog. Twitter mentions and retweets (that can generate web traffic) are seen as having a lower impact than blog mentions, but are valued as having a higher impact than wall posts, viral videos and other social media “buzz”.

Looking into this in more detail, three different trust categories have emerged: LinkedIn and Wikipedia are seen as being very reliable resources; Twitter, Facebook and YouTube tend to be seen as more unreliable; and Quora and Four Square are too unknown to be significant. 64% think LinkedIn is a trustworthy source. Equally 64% of respondents say that Wikipedia is very reliable or reliable. One senior respondent commented: “Inaccuracy is the biggest headache and Twitter is much more based on rumor than fact. I am more likely to trust Wikipedia as a factual source of information.” However, given the nature of Wikipedia to be edited by anyone this can be a dangerous approach. Wikipedia entries are in a constant state of change which requires constant monitoring and, when necessary, editing to restore facts and delete rumours or inaccuracies. 25% of banks think Twitter is reliable, for Facebook the value is 17% and YouTube is being seen as reliable by only 9%. One third said that information on Facebook is unreliable or even very unreliable, whereas 42% think that Twitter’s value varies greatly. For YouTube this figure is 30% and for Facebook 29%. Newer platforms such as Foursquare (83%) and Quora (91%) are unknown or not used by the majority of banking communications professionals, so most respondents are unsure about their significance.
When it comes to assessing the importance of the various platforms over the next 12 months, Twitter is the clear winner. 50% of banks think the platform will become more important, and another 8% think it will become much more important. 48% think LinkedIn will become much more or more important, whereas – despite its lack in trustworthiness – the value for YouTube is 43%. Over a third (36%) said that Facebook’s importance will grow in the next year; however 4% also thought its importance would reduce. In general however these responses show that the vast majority of respondents think that most social media platforms will become more important in the future. Very few communications experts think that social media will become less relevant. However, one respondent clarified that these platforms are probably more important in the retail banking world. As highlighted earlier, it is important to engage the target audience in the most appropriate way.
How content is created
Typically, the responsibility for creating and publicizing content on official social media platforms lies with the communications/PR department (61%). 48% said it falls to their sales and marketing departments, whereas 30% have a dedicated digital/social media team. Senior management involvement is very low, with just 4% of bank CEOs creating content. In addition, 4% and 9% respectively said that their IT department and other individual employees look after social media execution. Another 9% have outsourced this to their PR agency, and there are a few banks which employ specific research teams for this task. 17%, a relatively high number of respondents, do not know who is responsible for creating content – “we haven’t defined it yet”, says one senior communications officer. Another respondent pointed out that responsibility for content varies by media platform, suggesting there is a range of people involved in the process which may make it more difficult to control messages and timing – especially across multiple jurisdictions.
In this respect, language is a widely discussed issue. A large number of journalists globally speak English to a certain degree which allows them to understand and reproduce a press release or commentary. However content in a local language generates far more coverage than content produced in English for a global audience, and most banks have their local operations create local press material. This does not automatically transfer into the social media sphere, where journalists are just one stakeholder: 40% of banks undertake all social media activity in English only to reach the widestpossible audience – including media, customers, partners and employees. However, a significant 35% translate and localize all content – “every community has its own language”, said one PR manager. A further 30% translates selected content into local languages.

Social media & banking – Examples
Indian markets
In India, the need to socialize is one of the primary needs among the urban and semi-urban population. This has led to the popularizing of the social networking site Facebook. The benefits of tapping the social media for the banking sector started gaining recognition as early as 2010, when banks like YES bank started having official facebook pages. It is an effective way of promoting a bank amongst the masses. It also facilitates a platform for the existing customers of the banks to share their views and experiences about the respective banks and provides a platform for discussion. This technique works just fine, and serves majorly two purposes; firstly it provides free publicity to the bank regarding the services it provides, secondly it allows the bank to understand its customers better through their feedbacks and discussions.
Some of the Indian Banks are effectively using social networking sites to listen and engage with customers that will help them in improving their marketing focus & target customers effectively, capturing consumer perceptions, brand building & increased product research. According to Facebook, its India user base has more than doubled in a year to 51 million at the end of March 2012 and Twitter has around 15 million users in India. Most of the social media users in India are younger generation in the age group of 18-34 years, predominantly male and are mostly inclined to use social media for doing banking transactions. Private Banks are the most active in using the social media with IDBI Bank (637K Likes), Axis Bank (545K likes), ICICI Bank (475K Likes) and HDFC Bank (109K Likes) as of May 2012. Public sector banks like SBI, etc are yet to start actively using the social media platforms but they still have presence.
ICICI:
In January 2012, ICICI Bank, India's largest private bank, launched its Your Bank Account Facebook application, which allows users to check their account balances, apply for debit cards, and other tasks like request statements and cheque books without leaving Facebook. ICICI assures its Facebook users that the app is hosted on separate ICICI bank servers and no data is transferred to Facebook as many of the social network users are concerned about privacy and data security which is hindering the active usage of banking applications on the social networking sites.
HDFC:
HDFC Bank, one of the early adopter and with an active presence on social media space, runs the Money Matters section on its Facebook page. The bank through its Facebook page engages visitors by putting up interesting news articles, small puzzles and games to educate users about various banking tools and even posting latest offers on cards and loans at the bank. HDFC Bank even lets its customers voice their grievances on the bank’s Facebook page and responds to them within 24 hours.
AXIS BANK:
Axis Bank has an active presence with highest number of likes, has interactive apps & promotional offers that allow the bank to communicate with its target audience. Brand campaign apps like Meri Zindagi ka Safar and Meri Zindagi ki Picture both have seen more than 20,000 monthly active users and bank is promoting its platinum credit cards on Facebook by integrating a movie ticket-booking transaction engine.
IDBI Bank:
IDBI Bank is the largest socially networked bank in the country in terms of official presence on four platforms namely Google+, Facebook, Twitter and YouTube with the largest number of fans/followers/subscribers/circles across these platforms as compared to any other peer bank in India. IDBI social media success formula is because of their approach which is an interesting mix of informative content, product awareness and grievance redressal. Social Media Platforms are an active part of IDBI marketing strategy.
Despite the fact that many Global banks are still apprehensive about offering their services and allowing customers do banking transactions using social networking applications due to data security and privacy concerns, Indian Banks majorly private banks are actively using the social media platforms to engage with customers and allow transactions through the applications. Apart from offering a low cost, effective customer engagement & marketing platform, Social Media usage through the mobile devices is also on tremendous rise as more people use their phones or mobile devices to make payments or other banking transactions through social networking sites. The following social media grade shows how active the banks are on social media space.

Banks | No of Channels | Social Grades(on a scale of 5) | HDFC BANK | 8 | 3.06 | ICICI BANK | 8 | 2.81 | AXIS BANK | 5 | 2.28 | CITI BANK | 5 | 2.02 | YES BANK | 6 | 1.97 | KOTAK MAHINDRA | 5 | 1.62 |

The International scenario
The importance of social media in the banking sector was realized long back in the western countries as compared to its Indian counterparts. Bank of America was the first and the largest bank in the world to use Twitter for customer service. The bank uses a dedicated Twitter page on which a wide variety of real people, with their actual photographs help customers solve their issues. The feedbacks obtained from these customers revealed that it was easier and faster to obtain customer service through the page rather than the traditional customer service. An increasingly popular perception among the customers known as the “people like me” found prominence in the social network scenario. According to this concept, in a consumer’s mind, the most credible spokesperson a company may have is a hypothetical person can make the brand or organization more relevant to the customer understanding his needs.
AMERICAN EXPRESS:
Taking advantage of this perception, American Express created “OPEN Forum” an online community dedicated to connecting businesses with each other and providing valuable content to the customers with which the company wants to have relationships. Today, OPEN Forum has more than 10000 businesses involved, monthly traffic has reached as high as 1.5 million visits, and the majority of the content is produced by the community. The result is a new touch point that drives brand affinity, provides American Express with an immense opportunity to create brand impressions, and gives the company a chance to be at the center of important conversations among its customers.

DISCOVER BANK:
The social media can also enhance the impact of marketing. Consider, for example, how Discover bank recently created a Facebook identity for “Peggy”, a character from its popular series of TV ads. Today, that character is ‘liked’ by nearly 9000 customers, and interacts with them several times a day. Such campaigns create millions of additional brand impressions inside of Facebook, as well as new opportunities for brands to interact with their customers in a low-cost yet effective format. While the use of social media to drive revenue within banks is still in its infancy, results from other industries further along the growth curve are encouraging. Avis, for example, has been able to use a variety of coordinated social media efforts to boost its sales by 9 percent; in a competitive, commoditized industry with flat or declining revenues.
MISSOURI BANK:
In certain cases, the image that the bank carries in the minds of the people also helps it in adopting the social media for marketing and branding purposes. Missouri bank, popularly known as the MoBank is one such financial institution with a trendy vibe that makes them a natural fit to utilize social media. They serve a customer base of visionaries and artists – people known to take chances, and though they have only three branches, they are located in places where people are invested in the community. They are not utilizing social media to ‘sell’ anything, but instead utilize social media as a way to build upon the community minded philosophy that they have spent years developing. The bank parlays their hip, young and cool image on a Facebook page that acts as an online neighbourhood for their customers to interact with each other and the bank – much like their branches.
WACHOVIA BANK:
Often banks have to face criticisms and negative publicity from enraged, dissatisfied customers, which if ignored or handled casually may lead to catastrophic results for the bank. This problem can be controlled and monitored on a large scale by the banks by entering the social networking sites. A classic example of this was Wachovia. Wachovia started actively using Twitter to help mediate its merger with Wells Fargo. In this case, Twitter quickly evolved into a customer service tool. In one case, a woman was angry about an overdraft fee and was voicing her opinion via Twitter. Wachovia was quick to reply back and asked to connect the user with a specific person from the organization who could help. By using the Twitter feed, the users not only see the complaint, they can also see how Wachovia has reacted to it and offered help.
BANK OF AMERICA:
Bank of America, one of the largest financial institutions in the US introduced novel techniques after entering the social media. Their Twitter feed is almost nothing but responses to customers’ needs. One unique feature of BoA’s Twitter feed is that they have used the customizable background feature to upload photos of their Twitter responders. Each tweet on their feed is initialed by one of the brand’s official representative and this helps in building customer relationship. BoA has also created its own micro-site geared directly to small business owners. This online community positions BoA as a resource for small businesses and provides information, industry experts and up to date market news. The online community also allows small business owners to connect with each other and share experiences. With innovative efforts across the board, BoA is making impressive strides in maintaining an active and large online presence that is engaging and interactive for both BoA and its customers.

The Grey Side of Social media usage
Challenges faced by Banks on social media:
Currently, there is no regulatory guidance on social media, but a quick search on Facebook reveals that even the FDIC has its own Facebook page. While several banks clearly display their own Facebook pages, as is true when embracing any new technology, there are risks involved.
One of the features that can make your website more socially interactive on Facebook is the “Like” button, which acts as a notice subscription feature. When a user clicks on the Like button from the bank’s webpage or Facebook profile, that user becomes a subscriber or fan to the bank’s Facebook page. Whenever an item is posted on the bank’s Facebook “Wall,” it will also appear on that user’s news feed. This allows users to receive an up-to-date notice about any new information, products, or services the bank wishes to share with them. In addition, what users Like will also appear on their own personal Facebook Walls, essentially sharing the bank’s Facebook page with the users’ friends. As mentioned above, the Wall is another intriguing feature Facebook offers. Not only can banks use the Wall to communicate with the outside world, but they can use it to interact with that public as well. However, because a clean white wall irresistibly invites taggers, we highly recommend banks restrict the ability of users to post comments on the Wall. An unmonitored Facebook Wall can lead to bad publicity or worse, such as leakage of confidential or non-public personal information. For example, customers can inadvertently post sensitive information, and disgruntled employees or unhappy customers can leave very negative comments.
Another less obvious risk resulting from giving Facebook users the ability to post on the Wall is the problem associated with social engineering or phishing. It isn’t hard for a hacker to become friends with customers or employees who have made comments on a bank’s Facebook page. Once hackers befriend a customer or employee, they can then mine Facebook profile information to launch targeted social engineering and phishing attacks using a bank’s name and inside information.
It’s also important to maintain control of the employees who manage your bank’s Facebook account. A disgruntled employee can do much reputational damage with social media websites such as Facebook. Facebook allows multiple administrators to a Facebook Business page, but additional permission settings for administration of the page are few and not very granular. There is one serious risk with this feature: an administrator can remove any other administrators at will, and as of the time of this writing, there is no notification when an administrator is being removed. It’s obvious how troublesome this can be if a disgruntled employee has administrative access to a bank’s Facebook page. In the end, it is up to banks to determine whether the risk of having a Facebook page is worth the reward.
Opinions are mixed on whether Facebook can actually help add to the bottom line, but then again, it depends on the individual bank’s marketing strategy. Some banks might be seeking the rewards gained through increased brand name recognition while others are seeking more quantifiable returns.

Disadvantages of social media on banking
We have seen how banks can benefit from entering the social media and how it can help it solve various real time problems. However, social media comes with its own share of disadvantages. Let us look at some of the threats that the banking institutions may face by entering the social media.
Commercial banking or business accounts are often more expensive than traditional bank accounts. Banks may charge fees for night deposits, for processing a certain number of checks and for the payroll services. Depending on the size of your business, some of the services offered may not be needed, and you may still be charged for the services even if you're not fully using them. Different banks may offer different services and charge different fees, and it can be difficult to compare the services. Signing up for a commercial account before your business is ready for one will cost you and may slow the growth of the business. If you choose the wrong bank, you may have a difficult time opening a new account and transferring all of the services to another bank. This can cost you both time and money.
While it's beneficial for banking organizations to get feedback from their customers, social media makes the feedback public. For example, every post on Twitter is public and you have no control over what people say. Bad news can go viral as easily as good news and can do your business irreparable harm. IT governance group the Information Systems Audit and Control Association released a report in June 2010 ranking viruses and malware, brand hijacking, lack of control over corporate content, unrealistic customer expectations and non-compliance with record management regulations as the top five risks of social media.
When a business sends an email marketing promotion to its customers, using an email marketing program such as MailChimp or ConstantContact, the business can track how many emails are sent, how many people opened the email and the number of sales generated as a result. Social media doesn't offer the same measurability, so business owners find themselves wondering if it's worth it to invest time and dedicate human resources. Business owners who want immediate marketing results may realize that if they use social media as a tactic, they may not be able to track results until months later.

Suggestions * Lack of Access to Banking Basics: It is an alarming statistic, but according to the Better Banking Campaign as many as 7 million people in the UK are unable to get access to basic financial products, such as overdrafts, credit cards or personal loans. Even more disconcerting is the estimate that more than 1.5 million adults do not even have access to the most basic bank account. Better Banking Campaign was created to help the socially disadvantaged gain better access to the basic financial solutions to everyday problems that most of us take for granted. They have been putting pressure on banks to look more favorably on people with lower incomes, and give them the tools to prevent them from getting into serious problems with debt.

* Regulatory Features in Social Networks: Proper monitoring of the Wall Pages has to be done. This can be accomplished by having a regulatory authority for regulating the banking in social media.

* Privacy control: Social media is all about publicity, while banking is all about privacy. Social media is about collectivity, while banking is restricted to individuals. So proper initiatives have to be taken to handle these problems.

* Foster Sustainability: Social banks are likely to increase their outreach and indirect impact way beyond what their limited size would suggest. With more and more new deposits coming in, social banks might also increase their direct impact by funding more and larger projects and initiatives that aim to foster sustainability.

* Indian Banking Sector & Social Media: They seem the perfect misfit – social media and the Indian banking sector. What else can you say in a country where half the population does not have bank accounts? But with the number of people in the country on the internet, and more importantly on social media rising, it is one area that the Banking sector cannot ignore for long, especially considering that the 50% mostly rural Indians not in the banking radar, are also not on the internet, which is another way of saying that a large section of those who are using banks, are also on the internet and on social media. When a person entrusts a bank with his or her money, she gets into one of the highest levels of trustful relationships in his life that often outlasts his normal everyday relationship. Hence, going all out to ensure that that trust is returned is not just an option, but should be a mandate for banks. And in the age of internet proliferation, one of the best ways to do that is through social media.

Some tips banks may find handy: * Create a Facebook page – be sure to continuously add engaging content and respond to posts.

* Actively involve yourself in a Twitter account & show participation by following others.

* Create a blog where your audience can find industry- related tips and trends while communicating their opinion on current topics.

* Use multimedia sites, such as YouTube or Flickr, to personalize your brand. Show your employees involved in the community with event photos or videos. Your bank will look less like a corporation and more like a part of the community.

* Create an internal social media policy that details how your brand should be handled by employees in the online space, as well as addresses legal requirements for banks using social media.

Conclusion
Social media is changing the way every industry engages with customers right now, and the financial industry is no different, though security is something to think about.
It is clearly understood that social media became the platform between the Banks and people. Social media is a low-cost channel in enhancing brand building, crafting a vision, boosting innovation and other strategies. For banks considering their presence in social media, the time has come to get serious. Indeed, because of the social media activities of leading brands outside of financial services, the growing expectations of customers, and the already-existent level of chatter regarding banks across the open Web, banks must get their strategies in motion now.
Any well-executed business is necessarily built upon robust strategy and leadership. With such a foundation in place, banks can find a successful way to design social media into their business and reap its benefits. And while it is likely that many banks will find themselves playing catch-up in this area, others will establish themselves as leaders. Indeed, those banks that place big bets and dive into this powerful channel will long be recognized for their innovation. For successful performance they have to follow the four steps of engaging, energizing, analyzing and interpreting.
As the world becomes more and more digitized, new technologies will become particularly attractive to the next generation of “Prosumers” — those professional, productive, and proactive consumers who typically offer the most long-term value to retail banks. Social media will, in effect, be part of their DNA, and will make positive contributions to the customer experience and to the bank’s brand. In other words, social media will play a central role in their pursuit of high performance. If a person is not actively involved in a range of social outlets, he is missing out an essential feature of life in the digital age. It spells mass marketing and will be the game changer for the banks.
To summarize, social media should be seen as a new channel to communicate with clients and strengthen relationships. While it may not be possible to address all banking needs of corporate clients through social media, it is definitely not a paradox. There is a lot of scope for value creation for the clients through this channel. Banks should iteratively define a client-focused nimble approach which will ensure greater success in lead generation and conversion.

Additionally, implementation of social media initiatives requires a holistic approach involving buy-in from all lines of business and departments. Social media strategy cannot be implemented in isolation by the social media team without the active participation from all the other departments in a bank. To be successful in their client communications, banks should regard all channels as integrated, relationship-focused venues, working in tandem to enhance the client experience
Social media remains a controversial topic for communications experts in the banking industry. Whilst the usefulness and growing importance of digital platforms have been widely acknowledged, banks are now faced with the challenge of how to best execute social media strategies. This research highlights how thinking and knowledge across the industry globally is more advanced than commonly assumed, which can only be a good thing. The level of engagement with social media platforms is for individual institutions to determine based on their needs, priorities and perceived threats. However, all communications professionals in the banking sector must at a minimum have a fine-tuned understanding of the social media landscape to allow them to identify the correct level of engagement and deal with negative online activity in the most effective manner. Social media empowers users in a new, exciting and sometimes threatening way, but its presence and growing importance is ignored at your peril.