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An article relating to this blog post on Finextra:

Co-Op Bank tweets taxpayer bailout denial

The UK's Co-operative Bank has been tweeting twitchy customers today promising that it is not seeking a government bailout in the wake of its debt rating being downgraded to junk by Moody's.


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What the financial industry can learn from Co-Op Bank

Last week, the Co-Operative Bank experienced a six notch downgrade by Moody’s rating agency, based on an increased “problem loan ratio” – launching the financial world into concerns around a potential imminent taxpayer bailout. The bank immediately turned to Twitter as the communication channel of choice to reassure the public. Their approach was pro-active, issuing a statement directly following the decision and  being very clear on the fact that there was no risk of seeking government help.

 

In times of turbulence and particularly in light of the global bank collapses we’ve seen in recent history, businesses in general and specifically financial institutions are forced to learn the skills of true customer engagement and communication in the social network era. As the fundamentals of a business go through change, the importance of communication increases. This applies both internally and externally. Failing to communicate clear and strong messages to staff and customers will lead them to seek information elsewhere – information potentially crafted by competitors, disgruntled suppliers or misinformed stakeholders who then start driving opinion.

 

When your business goes through substantial change, you inevitably face two challenges. You want to become aware of what is being said about you, in order for you to address any misconceptions, and you want to communicate a clear view on events. In the world of social media, this needs to happen without delay. Timing is crucial. If you’re not talking about it, someone else will be – and they may not be saying the things that you want.

 

Business is increasingly influenced by the online commentary which takes place on the public social media networks. In a report from Colt Technology Services, more than 60% of the 350 financial professionals surveyed stated that public opinion on social media sites affected stock performance. The report also indicated that a third of respondents worried about their ability to respond quickly enough to social media impulses. This data mining and analysis can no longer be a manual process, or one delegated to marketing functions or customer support departments alone. The modern business needs a suitable IT infrastructure in place to ensure this information flows freely and becomes part of underpinning key strategic decisions.

When it comes to using the power of Twitter, the Co-Operative Bank are ticking a lot of the right boxes. Whether they will do enough to walk unscathed from the avalanche of news reports remains to be seen.

 

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Comments: (3)

Melvin Haskins
Melvin Haskins - Haston International Limited - 15 May, 2013, 10:08Be the first to give this comment the thumbs up 0 likes

I would be interested to know just how many Co-op customers use Twitter (or FaceBook). I doubt that the majority do.

My teenage son uses niether, having been bullied at school. He tells me that Twitter and FaceBook are relentlessly used by bullies. He has Skype and e-mail and seems very happy to communicate that way.

As a result, your last paragraph talking of 'the power of Twitter' does not ring true. It is one of many tools that banks need to empower, but certainly not the only one.

A Finextra member
A Finextra member 15 May, 2013, 12:02Be the first to give this comment the thumbs up 0 likes

A good article and with nearly 6,000 followers @CoopBankPR are getting their messages out to customers, the press and the market as a whole.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 16 May, 2013, 13:47Be the first to give this comment the thumbs up 0 likes

In all this praise for Co-Op Bank in Twitter management, are we forgetting that it has done a lousy job in its loan management? A onetime six notch downgrade is not a great way to run a bank. This one fact would keep me away from Co-Op if I were planning to open a new bank account or think a hundred times whether to continue to keep my money there if I were its existing customer.

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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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