As with any new development regarding relationships and the technological progress enabling them, in an industry such as banking, there are hesitations. In the larger arena, businesses like Bank of America show a strong presence of a team with a specific focus on Twitter, but many community banks are hesitant. Understandably, there is concern about compliance with FINRA and potential future regulations set forth by the FDIC about social media. Establishing a solid team of people who are well versed in the regulations and who will stay on top of future developments helps to alleviate the risk. For instance, it is clearly imperative to ensure that users do not transmit confidential information through social networks and to remind online bank representatives that they cannot offer certain types of investment advice over these channels, but if a regulations-savvy team remains vigilant and aware of the gravity of a mistake here, this can be handled safely.
The problem arising currently is that some banks have been merely putting their toes in the water, leaving a ghost presence in their wake as they pull back on their engagement. These abandoned Facebook pages, Twitter accounts and lackluster blogs are not a positive first step – they are actually a counterproductive effort that reflects poorly upon the bank. Abandoned pages cause the bank to be seen as inattentive to client needs, so banks need to go 100% and do it right, or don’t do it at all.
At this point, however, it is rare to find a business that doesn’t think they should at least do something because customers expect them to be in the online spaces right now. Two main causes are driving banks to the new online communities:
- Expectations: In the 1990’s, online banking emerged as a “ticket to play” – a necessary prerequisite to retain customers. Now, a growing social presence is what is expected of banks. Otherwise, they are viewed as disengaged and inaccessible.
- Inevitability: In the future, presence in social networks will be a service offering that all banks will have, much like free checking and online bill pay were initially. Whether a bank develops this presence now and uses it to win customers (or in 3 years and uses it to stop losing customers), the capability is required.
The benefit of jumping on board now is the advantage of a head start over late adopters. In the banking world of relationship building, being in the first group to offer a new and unique service is a powerful advantage, and those groups historically win. Cultivating an online presence now will give banks a competitive advantage in search over those who delay, as well as in acquiring online community members who will, over time, provide insight about how to improve service. Waiting to join until most other banks are established on social networks will significantly damage a bank’s ability to compete with companies who have relationships and best online practices established. Ultimately, this social network presence will be mandatory. For community banks, it is just a matter of deciding whether to gain the advantage of being a leader, or waiting until a competitor has already seized the pole position.
