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The Real Risk of Social Media

With news that ING is to enable elements of banking over Facebook and Chirpify to allow users pay with Facebook comments, it seems that social banking has arrived. How ironic then that most banks are so caught up in regulatory concerns that they themselves don’t take full advantage of social networks, let alone social on mobile devices, to interact with customers.

While many banks are holding back, concerned over compliance, security and loss of reputation, others are picking up the gauntlet and talking not just to their customers, but to their competitors’ customers too. And the problem will only get worse. Already if your target demographic is under 34 and you’re not on social, you probably don’t even register in considerations of who they will trust with their money.

It’s a big gamble to take, so does the risk really outweigh the lack of action?

Risk in social media broadly comes down to four main areas, all of which are easily mitigated. Data leakage – deploy content monitoring just as you would do for email. Inbound threats such as viruses – ensure all entry points are covered by anti-malware technology. Compliance – archive and log everything, again just as you would for email. User behaviour – tie all social media and web 2.0 application buddy names back to an individual’s corporate ID.

The evidence is there to demonstrate that using social media leads to an increase in revenue, reduces contact centre calls and potentially lowers customer acquisition costs. In addition, engaging directly with your customers and prospects will provide in-depth data that can be used to enhance and develop future products and services.

When even your grandmother is on Facebook, you know it’s a channel that can’t be ignored.

People are always asking, what’s the risk of doing social media? Well yes, there are some big concerns, but they can be managed and mitigated. The real risk is doing nothing at all.

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Comments: (2)

A Finextra member
A Finextra member 03 April, 2013, 11:52Be the first to give this comment the thumbs up 0 likes

Another real risk of Social Media - your corporate Twitter accounts are protected only by an email address and a password. They're probably run by your press team, whose email addresses are publicly available. A few minutes social engineering and a hacker could have all they need to take over your Twitter feed and do a great deal of reputaional damage.

Just saying ...

 

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 04 April, 2013, 19:46Be the first to give this comment the thumbs up 0 likes

Some banks are already using social intelligence platforms to hone in their competitors' disgruntled customers and win them over with special offers. If the fence sitters need any more reasons to jump over the wall, they can find them here:

The Business Case For Social Media Customer Service

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This post is from a series of posts in the group:

Social Banks

Social Banks is a group that aims to discuss trends and debate as the financial services take their first steps into social media. Twitter, Facebook, LinkedIn etc..debate all here.


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