Banks seek admission into social media’s inner circle

Banks are trying to regain the trust they lost when the recession gripped the UK by using social media to engage with consumers. But they muct adhere to strict guidelines. By MaryLou Costa.

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Banks have been cast as villains, whether they like it or not, according to The Co-operative Financial Services head of brand and marketing Louise Fowler.

Addressing the Marketing Week Financial Services Summit last month, she said: “Not everything that occurred during the recession was down to us, but there are things we could have done better. It’s in our power to change some of these things and tell consumers that we are interested in them.”

Statistics from The Co-operative Financial Services Brand Positioning Study last year reveal that 56% of consumers think financial services companies are responsible for the economic downturn.

Fowler’s frank summary of one of the challenges that marketers in the financial services industry face set the scene for a debate about what measures they can and have been taking to improve the emotional engagement between brands and their customers.

While case studies of product and marketing initiatives designed to meet this hurdle were universally welcomed at the summit, there was debate about the role that social media has to play in the customer engagement strategies of financial services providers.

Customer queries

Regulation around security makes it difficult to respond to customer queries and feedback via social media. But Brett King, banking consultant and author of Bank 2.0, has said this is merely an excuse. Sitting back while social media use and capability develops should not be an option.

Speaking to Marketing Week after the summit, The Co-operative’s Fowler says that while the role of social media in finance can’t be ignored, it has yet to become her top priority as it is still in experimental stages.

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“It’s something we’re wrestling with,” she admits. “We want to embrace anything that will give us a closer relationship with our customers but we know we need to understand this better.”

Fowler adds that there are customer expectations banks must be able to meet before committing to interacting effectively with them via social media channels.

“The minute you open up a conversation, you need to take action on what people ask you for. There is quite a big operational issue if lots of people are using Twitter or Facebook to talk about an issue. We then have to be ready to respond with assurance that we are working on it, or a reason as to why we can’t change it,” she says. “But at the moment we aren’t confident that we could deliver excellent service through this channel.”

Exactly what consumers want to be able to do and discuss with their financial services provider via social media has yet to be determined, according to Barclays associate director for insight and propositions James Wycherley. “They want a professional relationship with their financial services organisation in addition to having the ability to access advice and more complicated services at a time they want it,” he says.

Wycherley notes that the challenges social media pose don’t differ dramatically from those that arise when other new channels have been launched, such as telephone and online banking. “As with any channel, until there’s been a decent period of use there is going to be a limited amount of data for us to be able to analyse what works well and what doesn’t,” he reasons.

“When online and telephone banking were launched it took time to get sufficient data for the provider to understand what consumers expect. It takes time for consumers to adapt to having conversations with providers in this way,” Wycherley says.

People

As customer insight gained from social media increases, Wycherley says financial brands will be able to gain more knowledge around different customer segments and will learn more about meeting their needs via all channels.

Sarajit Mitra, HSBC’s global head of marketing and client experience for global banking and markets, says that high wealth customers are unlikely to engage with social media. “You would never have a conversation about investing £50,000 over social media,” he says. “People with that sort of money to invest would much rather sit in a private room with an adviser. They might do some research online to find out what opportunities exist, but they would definitely not accept advice from a bank on a public platform.”

While Mitra confirms that social media monitoring is an important insight tool for financial brands (see Viewpoint, below), he says that when the time for more active participation arrives, financial services providers need to consider the kind of communication their brand identity allows.

“If you are an NGO, then participating in social media is expected. You have brands like The Co-op, or even credit card brands, which have a natural right to participate in social media debates, and other brands that might not have that natural right. It comes down to identity, and who the target audience is.”

Financial brands must consider their purpose before launching social media initiatives, he adds: “If you are a business entity that has a social component to it, it’s only in that component that you are allowed to participate.” He gives the example of energy companies, where appropriate social media discussion could revolve around cutting energy use around the home, but less so for discussing actual products and packages.

Financial brands must consider their purpose before launching social media initiatives

Social media may go some way towards increasing the public’s emotional attachment to their financial services provider, but Fowler, Wycherley and Mitra all argue that other channels shouldn’t be neglected in favour of bigging-up digital heroics.

“People’s feelings towards financial services brands have nothing to do with social media. Social media isn’t necessarily a way of solving that – the medium you do it through depends on the customer,” says The Co-Operative’s Fowler.

During the Financial Services Summit, all three highlighted strategies for creating a more positive perception of their brands that did not involve social media.

Fowler revealed that in the past year, overdraft charges have been halved and an insurance policy specifically for young drivers has been introduced. She says that it is important to communicate just what it is a bank has changed to become more trustworthy in the consumer’s eye.

HSBC’s Mitra revealed how the bank used emotional scoring in individual branches in Brazil, New York and Hong Kong as a way to improve customer service. Customers were asked to rate how they felt emotionally, such as angry, disgusted, happy or surprised, rather than give a score out of 10.

Emotional effects

Mitra explained that as the feedback was gathered week to week staff became more emotionally driven to improve their service levels, and in turn their scores rose. “As it was done branch by branch, it was in the power of each one to individually improve their service levels,” he said. “This is one of the first steps that we have taken to improve our understanding of the emotional effects of service on our customers.”

Meanwhile, Wycherley described how Barclays leverages insights from the bank’s customers to develop PR angles to feed light news stories into the national press.

For example, Barclays’ connection to Premier League football has seen it generate media interest around revealing the spending patterns of various groups of supporters, such as how much Manchester United fans spend on fuel travelling to away fixtures.

The Co-operative’s Fowler doesn’t believe that financial brands are lagging too far behind their counterparts when it comes to social media strategies, and that banks will gradually develop their positioning in this space.

For now, though, Mitra at HSBC says it is a journey that for most bank brands is beginning with listening to and analysing what consumers are saying about financial services providers online, before communicating with them via social media.

Viewpoint

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Sarajit Mitra, HSBC’s global head of marketing and client experience for global banking and markets

Like other financial institutions, we are still listening to what is being discussed in social media. This gives us a fair idea of the key issues that we need to address to give our customers a better experience with the brand. Unless we are listening to what people are saying about our service there’s no way we can think about how to improve it.

Social media is a channel through which organisations can develop insight and an understanding of what matters. The marketing team then needs to translate that to an appropriate benefit for the customer.

Social media is just one forum where people meet. If that is the right place to be communicating your brand, then you can do it. If not, then you find another medium. That gets dictated by what you are as a brand and who your customers are and what they want from you.

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