Companies have come to realize that social media has potential for most any industry.  Most organizations are learning by example, watching what industry leaders do with social media and then attempting to move along similar lines if the strategy is applicable to their organizational goals.  The usage of social media by financial institutions has slowly increased with the realized potential of it.  Many banks and credit unions have hopped aboard and are now using social media for not only promotions, but to service their customers/members as well.

Here is an example of two different banks using social media to provide service to their customers, while also performing damage control for their brand’s image.

Bank of America and Chase:

Many consider both Bank of America and Chase leaders for the way they are utilizing Twitter.  Each bank has staff that monitors and responds to mentions of their brand (positive or negative).  Their Twitter accounts serve just as any other channel for customer service, except they are also able to catch many issues preemptively or after the fact (if a customer was dissatisfied with another channel’s resolution).  When a customer goes on Twitter to vent their frustrations, their Twitter team is able to find these comments and assist the customer with any problems they might be having.  Ultimately by doing this, they are able to leverage the bad comment and turn it into a positive experience by showing the importance they place on resolving customer issues.

See these pages for real-time examples:

• Bank of America: @BofA_Help
• Chase: @ChaseSupport

Customer service aside, social media is also beneficial in other ways.  One way is Google’s increasing emphasis on social media, making search results friendlier to brands that utilize social media to promote their site and engage their audience.  Also, financial institutions are using their Facebook pages to provide their customers with a face and personality, typically by featuring photos of key events for the bank or photos from sponsored events that show the bank’s involvement in the community.

A survey conducted in 2010 by Aite Group found that 90 percent of financial institutions expected to have a budget dedicated to social media by 2012.  However, there still seems to be a portion of banks and credit unions that are hesitant to embrace social media, likely fearing they may lose control over their new online presence or pondering the implications they could face due to the privacy and legal issues that come along with operating in the financial industry.

While not all banks and credit unions can or even want to establish the same presence as financial behemoths Bank of America and Chase, smaller financial institutions still benefit from engaging their customers through social media.  Social media serves as a point of contact, an additional outlet for promoting new products and services, and a way to engage customers by providing information on sponsored events.  Case studies can be found online that show the success of social media usage by smaller community banks and credit unions, which can be a great starting point for piecing together a social media marketing strategy.  However, in addition to this, it is important to know that each and every bank and credit union has a unique customer base.  When working with multiple social media channels, it is important to have a proper understanding of an organization’s customer-base and how the customers interact with their banking services and social media.

As always, market research (customer surveys, interviews, focus groups, etc.) can be a great way to understand how often customers utilize these services as well as how they would potentially use these services to interact with a financial institution. See the right toolbar on this blog for information to contact the RMS Business Development team.