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.

Adoption of Social Media has been slow as doubts are raised about

issues of returns on investments, risk and management of the Social

Platforms.

Tips for Banks on Using Social Media

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.