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Gary Wright

Gary Wright - BISS Research

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EBAday

EBAday is the annual event for European payments professionals run by Finextra in conjunction with the Euro Banking Association. This community has been created to deliver a forum for EBA delegates to exchange views on Sepa and new developments in payments processing.

Social media within financial services

23 October 2012  |  6979 views  |  2

The explosion in members of social media sites shows no sign of slowing down and with Twitter now well established and introducing further expansion, the time may soon be with us when all the world’s population will be connected. There is of course quite a moral argument about privacy and the risks that multilateral connectivity can bring, not least the protection of people and their human rights. However, in financial services the opportunities afforded by social media have been less than well recognised and fear prevails in many cases; fear of leaked information and data, and as we have already seen, whistle-blowers utilising social media facilities to damage former employers.

The use of social media for financial services firms appears to be mostly centred on marketing to their customers. Although I have serious doubts of a sustained success if customers find the Banks marketing directly through social media just as irritating as cold calling or junk mail.

The Financial Services Industry has never been held in such low esteem in the eyes of society and so there is a very important task ahead to try and regain its former glory. Trust is easily lost and hard won and with social media there is an opportunity to directly rebuild bridges with customers. However, marketing products and pushing corporate messages and brands is not the way to do it. There is a real need to open up communication channels to listen to customers, rather than simply pushing the corporate message.

Listening is a hard skill understood by many but performed by few. Certainly corporate listening has been virtually non-existent to date. As soon as a complaint or a problem is reported by someone most firms seem to go into defence mode and then either try to dismiss or disregard the problem or worse still place doubt on the credibility of the complainant, rather than working on a satisfactory resolution of the issue for all parties. This is entirely the wrong thing to do if the financial services industry is to recover its ancient philosophy of ‘the customer is always right’ and ‘my word is my bond’.

Social media only works if it is controlled by society that can utilise global connectivity to discuss or present the individual view, which may well create a groundswell of opinion and movement on a revolutionary scale. It does not work if it becomes an Orwellian tool for Big Brother.

Financial services firms would do well to introduce social media policies in their organisation that actually enable employees and customers to provide feedback and where necessary responses or suggestions about areas of business that are problematical or need improvement.

Until recently financial services firms have traditionally kept their business shrouded in mystery and their customers have had to battle to gain a little understanding. However, social networks are the new shields and swords for the customer and firms must beware that the age of transparency and enlightenment is here.    

TagsMobile & onlinePayments

Comments: (2)

Mark Pavan - mapa research - London | 30 October, 2012, 17:01

Great blog that touches a wide range of topics in respects of banks and their communication. From a bank watchers perspective I think the Social Media issue is more one about what is the converstation that people want with their banks.

Frankly I dont think people know or think about it very much.In fact most would say :" I dont care". Yet the banks intrude on every and all aspects of our lives.We all use banks because we have to. If we don't we are classed as socially excluded! So we have to care.

Unfortunately retail banks (as a result of doing things succesfully ) have grown into self feeding monsters that just need to keep feeding. More products,more sales etc.,with the only way to keep them in check being regulation: which we all now doesnt work very well.

As a result I can't see,certainly within the current existing structures, social media finding a role in banks. I think your blog doesnt address that missmatch. Before looking for their social media voice I think banks have to first refind their role in society. And that is a challenge

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 01 November, 2012, 18:31

Take any major bank, you'd find hundreds of social media mentions about it every day. Most of them are not actionable in that they convey a neutral sentiment. Imagine the tedium faced by someone having to review scores of such messages before they can spot one that calls for action. This highlights the challenge of "listening" on social media.

Fortunately, a new crop of social media sentiment analysis apps uses natural language processing techniques to separate the "wheat from the chaff" by discarding a bulk of neutral messages and honing in directly into messages with a distinct positive or negative sentiment. I know a couple of banks who use such tools to listen to what people are saying about them and their competitors on social media and tailor their responses individually viz. encourage brand advocates to spread the good word around and entice disgruntled customers of competing banks with special offers. The tools are there. It remains to be seen how many banks use them to ensure that their prospects and customers find their social media communications valuable or at least interesting, instead of ticking them off with pesky junk mail or cold calls.

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name

Gary Wright

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Analyst

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BISS Research

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2007

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London

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