Banks are conflicted.
Almost all of them block employee access to LinkedIn, Facebook, and Twitter. Yet the individual businesses within the banks all want to use those channels.
Beyond just advertising, those banking businesses recognize that they can engage people in new, more commercially effective ways.
Here are 4 examples.
This is the most obvious example. If you want to inform people, it makes sense to use the same channels they use. To go where they go. Online, for graduates, that tends to be Facebook. And for professionals, it’s LinkedIn.
These channels complement their company portal which has additional material and links to application processes. Being social, they make it easier for candidates to share that content with their networks (broadening the company’s reach) and to ask questions (increasing engagement).
Supporting retail customers
It’s hard to measure how effective this is. But it’s easy to see that doing nothing while customers trash your brand in public is a bad thing. Here’s a typical exchange on Twitter that turns a negative experience into a positive one – one that’s shared with the customer’s entire network.
@KUSH_MULLA: “#ShoutOut To Bank of America for letting my ATM card expire without sending me a new one in advance still waiting”
@BofA_Help: “I work for Bank of America. Did you call to check the status of your card? Anything I can do to help?”
@KUSH_MULLA: “They need to give you a raise. This is what I call outstanding customer service”
@KUSH_MULLA: “@BofA_Help yeah, I called they said my card should be here within 7 to 10 business day thanks a lot”
Generating leads for brokers
This is where it gets tricky. Having HR and customer service use social media is relatively benign. But when it comes to talking about financial products, there are significant restrictions on who can say what. Anything that seems like an advertisement or recommendation has to be approved by compliance beforehand.
The legal risk is real, and so most firms have shied away from it altogether.
So, Morgan Stanley created a bit of a stir when they announced their brokers would start using LinkedIn (and soon Facebook). In their own words:
“Many of our clients have been demanding social media,” said Andy Saperstein, head of wealth management for Morgan Stanley Smith Barney. “Many of our advisers have been demanding it….”
“The crux of social networking is building relationships,” said Lauren Boyman, Morgan Stanley Smith Barney’s director of social media. “That’s what financial advisors do, build relationships, build trust with their clients. This is a tool for them to do that in a more effective way.”
Ms Boyman added that both young and seasoned advisors had long been asking for permission to use these tools to market themselves and get referrals: “I talked to one financial advisor who said, ‘I’m 52 years old now and I know that if I ignore this, five years from now, I’m really going to be a dinosaur.’”
Morgan Stanley is taking it slow. They’ll open up LinkedIn to only 600 of their 17,000+ brokers. Then they’ll see how it goes over a few months before proceeding. But it’s a positive step that other firms are sure to emulate.
Even if banks have difficulty recommending specific products, it’s easy for customers do so. As for many retail products, consumers face a dizzying array of choices when it comes to asset management funds. And so referrals from friends are a particularly powerful way to cut through the noise:
“Nearly 70 percent of consumers said a positive referral from a “friend” on Facebook would positively influence their purchase decision. In addition to a tool that retailers can use to promote their brand, products and services, Facebook can also serve as a peer-to-peer comparison shopping tool where consumers can seek advice from their friends and family members.”
This is why social platforms are so relevant to commerce. Increasingly, they are a channel for recommendations that lead to purchases. Whether you’re a shoe company or a bank, you’ll have to use those channels to remain competitive.
“Willful ignorance” is not an option
With all these examples, blocking access or preventing businesses from engaging on-line is no longer a viable strategy. Even the regulators don’t recommend it.
Why? Because their own studies show that individuals at firms are already circumventing official policies to use the public social media channels. And the regulators want actual enforcement that works.
Pretending it’s not happening is not enough. So it’s time to work through the difficulties and the rules. To find ways to use the public channels in compliant ways.
It’s better policy. And it’s better business.