A truly social bank advisor is the key

This week has been fascinating with lots of discussions about branch versus no branch and financial advisor versus product seller.

I was going to leave it at that, but feel one final blog post worthy of discussion and this is about the role of social media.

We all talk about Facebook and Twitter in the abstract whilst, for most banking people, it's an alien world that is firewalled away from them.

This is brought home to me regularly when I ask how many people use twitter.  In most banking audiences, it’s one or two.  

By way of illustration, I presented at two conferences this week.  One was for bankers with four people on stage, and I was the only one with a twitter account.  The other was for innovators and every presenter had a twitter account.

I’m not saying this proves anything, but it is fairly consistent that,  for most bank employees - Gen Y or otherwise - using Facebook at work is seen as 'wasting time'.

Complete baloney of course, unless they are just conversing with their girlfriends about make-up or boyfriends about soccer, but there's the rub: banks don’t want to be in the social media space.

That may change.

For example, American Express (AMEX) has heavily invested in social engagement as a channel.

This is because AMEX realise that for every person on Facebook who likes their page or updates, 235 people will see their news.

With an average ten thousand or more people viewing their news at any time of the day, that’s over two million people engaged with AMEX 24*7.

So why have the banks missed this engagement channel?

Because it’s viewed as flakey and new, and because it’s viewed as purely for PR and marketing purposes.

That’s the mistake as social media can be used as a customer advisory channel.

And this is where it gets interesting, as we talk about the customer advisory bank.

A bank that truly engages with advising customers via Facebook and Twitter would be different.

This would be a bank that wants to be part of the social community, not just using these capabilities as PR or marketing mechanisms.

And that really is the difference.

The best way to illustrate this approach is using someone like myself, who really believes in social media as an outreach tool.

You are purely reading this because you know me through social media: the blog.

Blogging, facebooking, linking in, twittering and more are all ways to really socially engage a community via remote channels.

If only viewed as a marketing or PR stunt then I could part-time it, but this is not the case. Instead, this is a core community of interest, which is networked as much through remote channels as through direct channels.

Hence both have equal priority and, in some ways, remote channels get higher focus as they have far greater activity.

So people trust a remote presence.

And that's where banks are missing an opportunity,

If a bank viewed social channels as of equal importance as their call centre and branch, then they could really engage customers as a remote trusted advisor.

Imagine if you will, the bank that picked up on your everyday financial needs as you text, tweet or status update.

"Oh I wish I could go to the scissor sisters concert tonight", you place on Facebook.

And your bank says, "you can afford a ticket, and I've found one for you".

Wow.

Or you tweet "thinking about buying this used Aston Martin", and your bank sends you a direct (private) message saying: "are you mad, you're already $20,000 overdrawn".

Shucks.

Now I know a whole bunch of you are going to say, "this is awful - it's big brother bank in reality”, and the answer is that this has to be based upon permissions based marketing.

But if the customer has accepted that their bank can share their personal updates for ‘concierge services’, then sure, the bank can proactively and contextually advise me.

“Just arriving in Rome”, you foursquare.

“Best exchange rate is €1:25 and the nearest branches are here ...”

... responds  my bank.

Love it.

This is really getting my bank to advise me on my spending and saving - its called PFM – and now I have a truly engaged, permissions inclusive bank relationship, socially enabled through remote channels. 

Fantastic.

And so, if you really want to see how social media can move from social marketing to social advisor, then banks that leverage these remote social channels for social relationships will be the ones that really excel.

Now the only question is: where are they???

 

The is part five of a five-part series:

• Part One: One banker knows his industry is trashed, and here's his plan
• Part Two: Do banks need branches?
• Part Three: Why you really need a bank branch
• Part Four: Building a customer advisory bank
• Part Five: A truly social bank advisor is key

 

Comments

[Nick Bush]

Absolutely spot on that the banks are not engaging correctly with social media. What's more frustrating is that social media works even better when your physical presence reinforces a trusted brand. Innovative social media use and local branches are the future for successful banks

[Peter Fletcher-Dobson]

Agree totally on the power of social media engagement. The challenge in my mind is how to seamlessly manage the shift from public conversation to private. At Kiwibank we've been rolling out Online Relationship Managers to all of our personal banking customers for the past year. Customers engage with them on desktop, tablet and mobile apps. They also use social media ( Twitter and Facebook) but the really good conversations can occur securely whenever and wherever the customer wants. There are a variety of smart tools used to help manage relationships across the entire online base but the key (and the bit we know customers love because they have gone as far as proposing marriage to two of them!) is that a real person is always one touch away. It's secure social if you like but which can extend reasonably easily to the public SM platforms.

[Thebankwatch]

I have to step in and disagree on this post. The example of:

"Or you tweet "thinking about buying this used Aston Martin", and your bank says, "are you mad, you're already $20,000 overdrawn"."

.. is the perfect example of the juxtaposition of personal outreach and bank confidentiality. The two cannot operate together. Even the most socially connected Gen M will not accept confidential information over social media.

Its too contrite to speak of banks lack of outreach to customers in social media. This is not a defense of banks. Its a reality of shouting customers personal information across the branch. Its just not on.

This is an old argument we had in 2006 and its still not clear.

Banks need to carefully scour social media for information on what customers think but it is not clear how they would use social media to respond.

[Chris Skinner]

Colin

As mentioned, it needs to permissions based and layered according to confidentiality. In the example I gave above, now amended, the bank would DM you which means the message is only visible to you privately.

Chris

[Edward Harkins]

Two comments. First I suggest that, with respect, Thebankwatch's comment is one example of 'just not getting it' on social media and where it is now in terms of functionality; in this case with banks.

Second, the problem is a long way away from just to do with banks in the UK. Much of my work impinges on the UK public sector which can be categorised as highly variable in its approach, application and use of social media. There are some remarkable exemplars, but they are mostly small scale and very localised or very task specific. Interestingly, the nature of the problems I have witnessed in the UK public sector are almost parallel in nature to what Chris describes - especially in the heavily contested fields of BYOD and use of social media by line staff.

[John Gilbert]

For the first time in the latest UK Financial Activity Barometer I believe that social media may have played a part in directing people (especially women) to move to a bank that was offering a very good mortgage deal. I do agree with Chris I think social media is a potentially very powerful channel as the MumsNet is showing.

[James]

It's only a matter of time before social media engagement becomes the norm but I do agree that the financial sector seem to be slow in embracing it. Many of the Financial Advisors I deal with seem to think they can leave it to others and I find that the more social media savvy have a better portfolio of clients.