How banks can harness the power of social media

Imposing architecture, clinically cold interiors, people pounding away on keyboards, glued to their screens, and an overtly friendly-to-the-point-of-seeming-hostile teller taking you through your transactions. Till about a decade back this picture is what came to mind when one thought of a bank. There was a sense of awe that people felt and along with it came a marked feeling of detachment.

Banks since then have tried to repaint this picture and come closer to their customers. What has changed is that the use of information technology is being extended from a mere facilitation of transactions to integrating the bank in the socio-cultural structures which the consumers exist in. This is where Social Media comes in.

Tips for Banks on Using Social Media

Adoption of Social Media has been slow as doubts are raised about issues of returns on investments, risk and management of the Social Platforms. However, many banks have started to increase their presence on Facebook, Twitter, Foursquare etc. and some have even built a sizable following of consumers on these platforms. Community building efforts on social media could result in greater transparent interaction between the bank and the consumer and could provide an opportunity for a better customer service experience.

These efforts should preferably be at the micro level. While Global and National Facebook Pages and Twitter profiles can be used to give information about products and to air announcements, consumer interaction can only occur at the smaller community level. This is because people interact with people they relate to.

Putting information about your bank out there is just a small part of the exercise. Interacting consumers create a buzz which at the right moment can be used for viral marketing of products and offers. Sharing of experiences and stories brings the banks closer to customers and also ends up becoming a valuable source of information about consumer preferences.

This raises the very popular question of negative feedback. Many managers think that negative feedback from consumers is highly detrimental especially if it is on a social media platform for all to see. But an efficiently managed social media platform can put a spin on this issue by using it as an opportunity to exhibit exemplary customer service, redressing grievances and putting at ease, consumer apprehensions in a very visible way.

Another question that concerns the use of social media by banks is the risks involved. Accidental display of confidential customer information can be a major one. To ensure that things run smoothly, banks need to figure out policy guidelines for managing their social media presence. Once employees and management know how information is to be shared and consumers interacted with, social media becomes a powerful tool for the bank. With Bank of America and Barclays building their presence on Facebook and many smaller banks jumping on the community building bandwagon, it shouldn’t be long before others join in.

This is a guest post by Robin Mckenzie of Buycenturylink.com, a site that offers savings and current information on high speed internet deal and phone services around your area. Visit now.