Most Banks Behind The Curve On Social Media

The folks at Social Media Today have posted a paper online entitled "Social Media and the Banking Industry" that contains some interesting findings and observations about the "new social media" and banks. First, and foremost, most banks don't "get it." At least other than Wells Fargo, which appears to be leading the pack by eight furlongs when it comes to understanding the use of blogs and wikis internally, although Deutsche Bank appears to be making strides. Most bankers apparently wouldn't know a wiki from a wombat or a blog from a bog. On the other hand, a few savvy readers of this blog appear to be bankers, at least the ones that threaten to punch my lights out for some snarky comment sent their way all appear to be bankers.

Among other "key finding" are the following:

• Financial services firms with aggressive marketing programs (like American Express, Visa and so on) are much more likelyto use social media tools in customer-facing situations than are more conservative banks.
• Community sites are becoming popular both for relationship building and as hubs for innovative financial services.
• Social media can adversely affect brand and reputation. The number of consumer-driven anti-Bank of America blogs, for example, is a public relations disaster.
• There are many good independent blogs on banking issues now being published on the Web (they list this one, so that proves their insight and good taste).
• The industry-leading American Banker publication does not appear to utilize online social media (nor does it list this blog in its blog watch, which proves lack of insight and good taste).
• For media companies, the transition in reader preference from a single-voice, authoritative, read-only model to a hybrid approach that also includes multi-voice, conversational “community” elements has created significant challenges.

The evidence presented seems to indicate that one of the main benefits in engaging in social media is that it makes customers who use it "sticky" ("Community users remain customers 50% longer than non-community users."). Also, they tend to need less of the expensive "hands-on" technical support in solving their issues with online banking ("43% of support forums visits are in lieu of opening up a support case."). They also tend to be more affluent, or at least they spend their money like they are ("Community users spend 54% more than non-community users.").

Sure, this is marketing and customer management rather than legal "stuff" (although the use of social media opens up some legal risks that must be considered), but since it's obvious that this blogger is knee-deep in the new social media, it's interesting "stuff" to me. There's also a list of  bank-related blogs, some of which I hadn't been aware of, locked in this bubble of insanity in which I float.  Some of you may find one or two that might grab your attention, or something else in the paper to pique your interest. Or, at least, waste a few more minutes before you have to do some actual work.