By: Nancy Steadman
Financial institutions of all sizes have adopted popular social media websites, such as Facebook and Twitter, as part of their marketing and sales strategies. These channels are becoming more crucial for banks and credit unions, because they enable institutions to reach out to a broader demographic of consumers while keeping costs low in a tighter regulatory environment. While social media allows banks to portray themselves to customers as modern and tech-savvy, there are some uses for which financial institutions should steer clear.
A recent article in The Financial Brand highlighted banks' use of social media in conflict resolution. The benefits of the social media tools in discussing and resolving issues is evident. Banks have easy access to customers via this method and can respond quickly to problems. The nation's largest banks - including Bank of America, Chase, Citigroup and Wells Fargo - all have Twitter feeds and other social media platforms that are specifically devoted to providing customer service. However, the ramifications of allowing criticism and scrutiny of a bank can do more harm than good over time, the news source notes.
Allowing customers to voice their discontent via public forums can impact other customers or potential customers' perceptions of an institution. Studies show that consumers are more likely to trust other individuals' opinions of and experiences with a bank over web resources and advertising campaigns. For this reason, opening criticism up to the public - and allowing them to scrutinize bank responses to issues - can backfire.
Personalize resolution strategies
Mystery shopping findings demonstrate that customer experiences weigh above all else when it comes to loyalty. For this reason, resolving account issues in person or by phone, and providing creative solutions to issues may have a more positive effect on customers because it suggests that they are valued. Social media can be effective and favorable for marketing, but when it comes to managing sensitive financial issues, working directly with customers is ideal.
Lastly, social media can be cost-effective tool to engage with customers, but financial institutions must also consider compliance factors in their dealings. Seemingly harmless communications about issues involving a single client can lead to privacy and security concerns if made public on social media sites. For this reason, utilizing existing tools - such as online chat - may allow banks to continue using online technology without opening potentially sensitive details up to the public.