Bank marketing and social media. Does it really fit? Marketing consultants and agencies worldwide push social media buzzword into banking and financial services for years.
If you read, as we do, some prominent blogs related to bank marketing, you already know that. This year will finally bring benefits digital marketing to banking industry, and amongst other tactics social media will be crucial or at least a prominent tool that is what most consultants say. The same was written year before, and we can bet in the next 12 months you will read similar headlines.
Is there any true in those statements, or is just a way to sell unmeasurable services to the rich guys, as it is with mobile applications that are outdated right after release? At K-message we believe that social media indeed deserves a place in bank marketing strategy. But it is not magic and it can be easily made not only useless but also very dangerous. JP Morgan’s recent failure on Twitter should be a lesson for all marketing managers in the banking industry.
What is in social media for bank marketing?
The answer is very straightforward. Your Clients are there. Regardless what you sell, B2B, retail, investment banking, insurance, credit card or payment processing. Your end-user is already on Facebook, Twitter, Google+ or LinkedIn. If you are not there to listen to him and respond when needed, and someone else is, you just lost the game.
Accenture says that 74% of banking customers is active in social media and 30% declares that they want to reach customer service and financial education via this channel. Probably every marketer in bank industry is already aware of digital shift and consumer empowerment. The thing is that offering website and mobile banking is not enough anymore. If you want to catch leads online, there is no better strategy now than engaging in social media. It will bring traffic to your website, it will increase loyalty and, maybe most importantly, will provide you immediate insight directly from the market.
Main risks of using social media in bank marketing
- Regulatory compliance.
One has to be aware, that financial services and bank marketing plays the game with many rules unknown for bystanders. It is a regulated industry, and compliance is the main risk of every marketing activity. Regulations depend on the market you operate in. In USA you need to follow Social Media: Consumer Compliance Risk Management Guidance issued by Federal Financial Institutions Examination Council (FFIEC) as well as SEC Investment Management Guidance that covers requirements regarding social media entries by investment companies. For UK you need to follow PRA Handbook and FCA regulations. The former regulatory body, FSA, has issued an update covering financial promotions in social media in June 2010. New guidance from FCA is expected in Q1 2014. If you have any doubts, you should reach out to your local compliance officer of your organization before engaging in social media or signing any contract with third party agency. Additionally certain social networks have their own internal limitations regarding marketing of bank and financial services. Ie. Twitter restricts promotion of financial services and even bans some of the products from being promoted. It also limits financial services marketing to specific geographies.
- Unexpected response from the public
Even before you post anything or establish any presence in social media, your company and its offering is discussed there. Try for yourself by entering your brand in SocialMention search engine. Still, if you decide to enter the conversation, you will face users under you have no control whatsoever. Actually, it is better to have some channel to mitigate any negative comments than to be not aware of them until the story reaches mainstream media, but you should be aware that the message you will receive from social media will not be polished like your assistants presentation.
Main benefits of using social media in bank marketing
- Risk mitigation.
While you may be scared of bashing like the one received by JP Morgan on Twitter, it is actually better if you hear negative voices from the very beginning. You gain valuable time and opportunity to address those before they rise to the level of big PR crisis.
- Better Customer Service
Social media are perfect for the first line customer service. As long as no personal information is shared you may help your customers by answering their questions.
- Improved Brand Image and Awareness
Social media provide opportunity to improve your brand presence, show your company values and give it more human face.
- Real-time market data
Social media monitoring allows you to have real time insight on your (and your competitors) campaigns efficiency. You can also try to crowdsource new offers and services with customers in your network. Social media monitoring cannot replace professional market research, but it may give you very valuable hints and warnings faster than any other tool.
- Lead generation
Last but not least, social media used in bank marketing is probably the best digital channel to present your offer and generate leads. Google+is a shortcut to the first results in Google Search more efficient than any other SEO technique. Whatever is recommended by a friend counts more than even the best advertisement. Any request coming from social media can be tracked back to the person who made it. It is not possible with phones or websites. If you are able to build community and integrate your social media with CRM, you get the information worth more than anything you can buy from Experian or ChoiceScore.
We do not know if it is 2014 that will be a year of social media in bank marketing. It seems however, that no successful organization can afford to skip this tactic in its marketing strategy. Therefore we believe that social media does fit to bank marketing very well. What is your opinion?