By now, you are either actively involved in social media for your bank, or seriously considering it. Key social media channels today include your web site, Facebook, Twitter, and blogs. Following are three ideas to help you leverage social media, while protecting your bank from both a compliance and reputation risk perspective.
First, you have to be “all in.” Commit to the required ongoing effort to maintain timely and accurate postings across all of your media channels. Having a Twitter account, Facebook page, or web site that is only infrequently updated is as bad as a stale billboard. Doing so requires two main efforts – identifying and supporting a point person (I prefer “social media manager”) to manage the technology, and ensuring a steady flow of information from your various departments and locations that allow this individual to make frequently, pertinent posts via social media sites.
Second, address the matter of managing feedback that you receive. Unlike virtually all other forms of advertising, social media allows, even encourages, feedback. Your social media manager must have the skills, and a support group, to segregate responses into three categories. First, there are those responses that we like because they are positive toward the bank and its activities. Second, there are those that require discernment in handling . . . while the post may be negative, is it objective enough that we should deal with it from a customer relations standpoint? Some of the posts you receive may contain a specific complaint. If you can, without divulging personal data, publicly address and resolve the issue, this becomes a great opportunity to demonstrate your focus on customer service.
Finally, there will be posts that must be immediately removed, because they are obscene, offensive, or otherwise inappropriate. Examples of inappropriate posts may also include those where customers (in spite of your admonitions to the contrary) may reveal account information. Ensure that our social media manager is monitoring ALL activity, on a timely basis, by receiving email or text updates when posts are made to your sites.
As an executive, be sure that you are at least basically familiar with current and future social media channels, so that you can provide guidance and insight to your organization in these areas.
Bank of America (BofA)’s announcement that it will impose a fee on the use of debit cards is probably the first of many by large banks. Rather than setting a precedent that all banks should follow, this move provides a tremendous opportunity for community banks to strengthen existing relationships, and perhaps attract new ones, by continuing to make debit cards available as a part of low cost checking accounts. Don’t let the noise over the “loss of fee income” distract you from an important fact: from a cost standpoint, every debit card transaction (whether PIN or signature) costs less than processing a check. Whether BofA customers will grudgingly pay a fee, revert to check writing, or move their accounts to another bank without such fees, the imposition of a fee (effectively creating an economic barrier to the acceptance of debit cards) is a bad move, period.
The need to offset the loss of fee income is frequently given as the motivation for imposing such a fee. If the result of the fee is increased operational costs, this will certainly impact a bank’s earnings, to the negative. There is much confusion over the reduction in interchange fees for banks over 10 billion in assets. This interchange fee only applies to signature transactions, which are already being threatened by the determination of merchants (through configuration of POS devices) to force customers to enter a PIN.
I want to encourage my friends in community banking to do what many have begun to do – promote your already free debit card more heavily – encouraging even more use, so that both your and your customers benefit from this popular, cost effective transaction tool. My twitter feed @techadvisor has been full of such posts from right thinking community banks doing just that.