What’s on Their Mind? Transparency in Social Media for Financials

| March 9, 2013
Social Media for Financials

Social Media for Financials

For some reason, certain banks and other financial institutions will still avoid thinking about or implementing social media strategies. Here are four situations in which a transparent approach to a bank’s online presence might prove useful.

Mergers, Acquisitions and other Crises

A crisis situation is paradoxical, in that it will require more transparency than usual, but it will also need to be sensitively handled, so that no information that could sent staff and clients into a panic transpires. In other words, crises are the best types of scenarios in which to exercise one’s diplomacy. The global financial crisis, for instance, abounds with examples of banks that failed to transparently communicate with their clients and ultimately lost all trust – even though not all went belly-up in the process, from the point of view of solvability and liquidities. Similarly, in today’s day and age, a merger between two financial institutions could raise some questions regarding the stability of the bank being bought and assimilated. As such, the manner in which American bank Wachovia approached its recent acquisition by Wells Fargo is exemplary. Throughout the process, its social media expert, Tim Collins, kept the bank’s Twitter followers updated and answered relevant questions. It’s worth noting that Wachovia has been implementing online client support for a long time now, via social media.

Countering Mistrust

The GFC mentioned above also planted the seeds of deep-seated mistrust within the minds of the general public. As several major banking institutions collapsed, bank clients became weary of placing their trust in them. One direct consequence of the recession was the increase in use of social media resources and tools, by companies in all fields, in order to maintain proper communication and initiate the process of rebuilding that lost confidence. In its turn, social media has been evolving and adapting to accommodate this trend, with the latest policy changes to Fan Page visibility being one of many recent updates that point to increased focus on corporate communication via Facebook. Social media has the major advantage of re-empowering members of the general public, by allowing them to speak their mind and that is one advantage no ad investment in old media could buy.

Client Support

Providing client support via Facebook or Twitter can be a tricky issue, since clients would most often have to disclose sensitive and confidential banking information. That being said, responding to more generic questions via social media can prove extremely useful, since it will render the bank all the more believable in terms of expertise and know-how. One small American bank has even gone as far as to broadcast live Q&A sessions with some of the members of its top management. The result: they have created an online hub of useful banking information and drawn in numerous followers, with little to no budget.

Risk Relief

A recent poll by the American Bankers Association indicates that 48 per cent of all banks will not talk about their products and services on any of their social media profiles. Some may be doing this out of fear of sounding overly self-promotional. While this is a genuine faux pas in online media communication, it is equally plausible that most will avoid addressing such issues because they don’t want to bring negative feedback upon themselves. What they are failing to understand is that negative feedback is not the end of their credibility – on the contrary. In Australia, Bankwest uses their Facebook page at http://www.facebook.com/Bankwest to address all sorts of issues, from new product launches to bank-supported events. If anything, their users appear to be generating more positive communication than those of their competitors. This can be attributed to their appreciation of transparency and it is an aspect that, in turn, has led to an organic growth in visibility for the bank’s page.

What’s on Their Mind? Transparency in Social Media for Financials

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