eModeration's guide to managing social media engagement for financial organisations


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As financial institutions turn to social media to communicate with and win new customers, what issues are facing them?

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eModeration's guide to managing social media engagement for financial organisations

  1. 1. Managingsocial mediaengagementfor financialorganisationsSocial media engagement can give financial organisationsthe ‘wow factor’. This white paper explains how to managesocial media, drive engagement and improve marketingcommunication, with some suggestions for thetools to help you do it.Authored by Tamara Littleton, CEO, eModeration April 2013www.emoderation.com
  2. 2. Managing social media engagement for financial organisationsTable of ContentsA guide to managing social media engagement for financial organisations.................................. 3Being social in a regulated world......................................................................................................... 4Who wants to ‘engage’ with their bank? Banks are boring, right?................................................... 6The opportunities for social media for financial services companies............................................. 7Why social media matters.................................................................................................................... 9Setting the rules of engagement........................................................................................................ 10Managing the community effectively................................................................................................ 11Crisis and risk management over social media............................................................................... 12Finance just got social........................................................................................................................ 12Reading recommendations................................................................................................................ 13About eModeration............................................................................................................................. 132
  3. 3. A guide to managing social media engagement for financialorganisationsBack in 2010, Thefinancialbrand.com published Why Social Media Is a Waste of Time for MostBanks Credit Unions, arguing that social media was useless for the financial sector. Among thearguments were: banks are boring; no-one wants to interact with them; people don’t have time forbanks; banks can’t communicate internally; it’s too risky; without a strategy there can be no clearmeasurements; and finally – it ain’t easy and it ain’t free.While we wouldn’t argue with the latter two points, the others are almost unrecognisable in today’ssocial media environment. The world of financial services, slow initially to embrace the transparencyof social media – for all the reasons outlined in the article above - is opening up: it even has its ownsocial media summit (the Social Media Conference for Financial Services).As more of us turn to social media (particularly Twitter) to resolve customer service issues, bankshave to respond over the channels that their customers are using. In 2013, we may see more of ourbank in our Facebook feed than we do in real life.This guide will look at what the opportunities within social media are for banks, what some of thebig names are doing to engage their customers, and some practical advice on managing a customercommunity if you’re a financial organisation.Of course, working within a complex regulatory framework has its limitations, and all banks usingsocial media will have their own detailed legal advice on how and when to engage with customers onpublic, social channels. This guide is certainly not designed to replace that, but rather focuses on thepractical issues of managing online customer engagement in the financial services sector.We hope you find it interesting, and, as ever, welcome feedback on our blog, via our website, or onTwitter.Managing social media engagement for financial organisations3
  4. 4. Being social in a regulated worldWe must emphasise that this guide does not give legal advice – we’re a social media managementagency, not a law firm. It is worth looking briefly at how banks can be social – with all the implicationsof openness and dialogue that carries – and yet operate within the confines of such a heavilyregulated environment.The UK regulatory landscapeOn 1 April 2013, as a result of the Financial Services Bill, the Financial Service Authority (FSA)was replaced by a ‘strengthened regulatory architecture’ formed of two separate organisations.The Prudential Regulatory Authority (PRA) now regulates banks, building societies, credit unions,insurers and major investment firms, ensuring that these institutions operate safely, while theFinancial Conduct Authority (FCA) focuses on how financial organisations treat consumers. The FCA’sapproach to regulation is expected to be more pre-emptive than that of the FSA.It’s early days for the new authority, but broadly, the rules for the communication of financialpromotion material online are subject to the same rules as offline. The FCA states:“The test for whether the contents of a particular website may or may notinvolve a financial promotion is no different to any other medium. If a websiteor part of a website, operated or maintained in the course of business, invitesor induces a person to engage in investment activity, it will be a financialpromotion. The FCA takes the view that the person who caused the website tobe created will be a communicator.”The same rules of ‘clear, fair and not misleading’ apply under the FCA as they did under the old FSA.So, for example, if a UK bank wanted to use Twitter to promote a new financial product or service,it would have to include enough information to meet the standards of ‘clear, fair and not misleading’communications, as well as meeting the terms of the FCA’s promotions.Full information can be found from the FCA at fshandbook.info.Managing social media engagement for financial organisations4
  5. 5. US regulationIn May 2011 in the US, Morgan Stanley’s financial advisors got the go-ahead to market themselveson Twitter and LinkedIn – something that hadn’t been done before because of tight SEC regulations.As in the UK, usual rules apply – they are still required to keep records of communication (done inMorgan Stanley’s case via a software application) and all communication is pre-approved.US financial firms have to abide by regulations set down by the Securities and ExchangeCommission (SEC) and the Financial Industry Regulatory Authority (FINRA). Any content published onsocial channels must be pre-approved and archived and social media presences must be monitored.More importantly, US investment firms have to ensure that recommendations are tailored to theindividual. Within the context of social media, great care has to be taken around what might be a“recommendation”. Something as innocuous as suggesting a Facebook page to a fan can be seenas a recommendation in this situation.The Federal Financial Institutions Examination Council (FFIEC) proposed specific social mediaguidance for federally supervised banks in January 2013. The guidance re-affirms that the samestandards applied in traditional forms of communication should be adhered to on social mediaplatforms. It also makes clear that financial organisations must create specific compliance programsto manage the risks associated with social media.The FFIEC guidelines emphasise that employee training, social media policies and proceduresand a clear governance structure should all be in place if social media communication is to remaincompliant.In April 2013, the SEC issued further social media guidance, permitting companies to post earningsand investment updates on Twitter and Facebook, as long as investors are told where to look inadvance of the postings.So far, regulators on both sides of the pond have taken the stance that social media is anothercommunication channel, rather than a new way of communicating. But can financial organisationscreate engaging social media presences under the current regulatory guidelines?Managing social media engagement for financial organisations5
  6. 6. Who wants to ‘engage’ with their bank? Banks are boring, right?Young audiences are choosing to talk to brands over social channels,often preferring it to the more traditional means of communicationthat their parents might favour. Recent research by Sitel, reported onEconsultancy, shows that 15 per cent of 16-24 year-olds choose tointeract with customer service on Twitter, Facebook, blogs and forums.Another study has shown that some UK consumers prefer using email,as more detail can be conveyed. In these cases, social media appearsto be used as a last resort - a way to get an organisation’s attentionwhen they’ve had no joy using conventional channels. It’s hard to tellwhat percentage of customer complaints come via social media, but it iscertainly on the rise. People are starting to get creative, with one angrycustomer making short films, “Bank of America Wants You to Die”and setting up social media presences to promote them.It’s easy to see why customers do this. Research by Virgin MediaBusiness (December 2012) found that 63 per cent of banks respondedto customer complaints and questions within an hour. NatWest took anaverage of four minutes, 10 minutes faster than the second quickest,HSBC. (However, the research didn’t cover the volume of complaintsresponded to.)More consumers and businesses now bank online. Forty-seven percent of Canadians prefer to bank online, and 45 per cent of NorthAmericans accessed online banking during April 2012 alone. A 2013study by MyVoucherCodes revealed that 61 per cent of UK accountholders use internet banking, with 36 per cent using a banking app on their mobiles. Twenty percent had not set foot inside their bank for two years.In the US, Citi is using Twitter for customer service, with its dedicated ‘askciti’ Twitter feed answeringquestions from US-based customers (although it has a very clear disclaimer on its Twitter page). Itmight be an interesting debate to see how effective this disclaimer would be legally.But there are compliance headaches with financial customer service and social media. Aden Davies,innovation technician at HSBC, is quoted on silicon.com as saying that compliance law from 1924means that banks can’t publicly identify someone who has an account with them, which potentiallycauses a barrier to using Twitter for customer service:“ We’re not allowed to publicly disclose that you have a relationship with us…It’s very, very difficult the kind of conversations that we can have publicly.”Managing social media engagement for financial organisations6
  7. 7. Despite this, HSBC (an eModeration client) is very active on social media. Its 2011 student bursaryFacebook competition invited students to submit a video of how they planned to make their markon the world, using a combination of user votes and a judgingpanel to select eight winners to receive a £15,000 Studentbursary. The campaign attracted a reported 40,000 votes.The bank ran the competition again in 2012. Also launchingthe MyMoney competition (hosted on Facebook and YouTube),which asked 15-17 year olds to make a 90-second videoexplaining how they would “make their mark on the world ofmusic”. The three winners received a music experience worthup to £10,000.The student bursary and MyMoney contests are great examples of the potential for banks touse social media to attract and engage young audiences. They both give something back to thecommunity, and stay within strict financial guidelines.The opportunities for social media for financial services companiesCompliance issues notwithstanding, there are clear opportunitiesfor financial services companies, as with other consumer-facingbusinesses, to benefit from social media involvement. Examplesinclude:Customer service. A good example of this is the US-based@askciti Twitter account, cited previously. Wells Fargo alsouses Twitter to respond to customers, and to track customerinteractions with the company. In the UK, Metro Bank usesits Twitter account @Metro_Bank to engage customers, andrespond to customer service queries.Research and development. Social media enables very quick insight from the exact targetaudience. UK-based First Direct uses its First Direct Lab to develop and road test new productswithin the First Direct customer community, to quote from the First Direct Lab website:“The First Direct Lab is all about getting you involved. It’s a place where youcan view new ideas and test-drive brand new first direct innovations before werelease them, so you can tell us exactly what you think and have your say rightfrom the start. After all, who better to test new ideas than the people they’reaimed at... you?”Insight. Social media means that for the first time, companies can listen in to what their customersare saying about them, and respond appropriately. If a product or service isn’t working for yourcustomers, social media is a useful way to find out what the problem is, and put it right.Managing social media engagement for financial organisations7
  8. 8. Recruitment. JP Morgan’s Facebook community is designed togive potential employees a look behind the scenes - a great useof social media to show the human side of the bank.Sharing information, for example about corporate socialresponsibility (CSR) programmes, and getting both staff andcustomers involved. (It’s fair to say that banking’s image mayneed a little polishing these days.)In January 2013 NatWest and RBS launched BizCrowd, a social media community designed toencourage collaboration between small businesses. It’s a great example of banks using socialmedia to build communities of purpose. Insurer, AXA, has also established a digital resource forsmall businesses.Goldman Sachs uses social media to demonstrate thought leadership and increase the visibility ofits brand, using YouTube (with the option of leaving comments switched off), Twitter and LinkedInto share information. US insurance brand, Vanguard, uses Facebook to share information, as wellas hosting web chats. While American Express has found a way to share information visually, usingPinterest.Creating brand ambassadors. By using social media to develop and distribute reward programmes,exclusive offers, competitions, etc, banks can encourage loyal customers to share their positiveexperiences via social media. For example, if a customer feels that their query was handledparticularly well, they might tweet about how brilliant their bank has been in helping them, whichcould catch the eye of some of their Twitter followers.Financial brands can use social media to create brand ambassadors by giving something back.American Express lets its members redeem account reward points for Facebook credits, and hasused Foursquare to offer money-off deals at small businesses on check-in. Okay, it’s no £10,000student bursary, but these ‘deals’ show customers that they are appreciated by the brand.And Lloyds TSB got involved in social media due to its Olympic sponsorship. By using a taggabletorch map called Torchviewer, and Twitter hashtag, #carrytheflame, the bank was able to reach ahuge number of people. Facebook fans increased from 3,000 to more than 38,500, while Twitterfollowers tipped over the 215,000 mark. The interesting thing here is that Lloyds recognised both thatsocial media plays a key role in the creation of brand ambassadors, while also acknowledging that acontinued presence needs a dedicated resource to manage it.Reaching a younger audience. Banks have always worked hard to capture the student market:they are customers who should go on to earn higher than average salaries and are unlikely to changebanks afterwards. Sam Grimley, Digital Acquisition Manager at HSBC, says:Managing social media engagement for financial organisations8
  9. 9. “I think one of the major benefits of using social media is the fact you are ableto have clear, open conversations with your target audience on their terms. ForHSBC Students we are able to speak to our target audience in a space theyare already participating in, we don’t need to try and build a new website andthen have to drive people there: our audience is already using social media andwanting to talk.”Other banks are trying to reach future customers at an even younger age. For example, NatWest usedPinterest to showcase entries for its ‘pigs by kids’ drawing competition in 2012 (how many of usremember the NatWest piggy banks?)Barclays uses Pinterest to highlight its football sponsorship, while American Express shares itsUNSTAGED music sessions on its YouTube channel. VISA uses its YouTube channel to shareLondon 2012 and Super Bowl videos (the channel has over 35 million views as a result).Aviva’s 2011 Magic Money campaign took to the streets to promote pensions to young adults (notjust its own products, but pensions in general). It’s also used a Facebook app to promote healthyliving, encouraging fans to send their friends e-cheers (Aviva then donated £1 to charity for each ofthe first 1000 cheers).Why social media mattersPeople in the UK switch bank accounts every 26 years on average, but the Government is makingthe switching process easier, and there are signs that once the process is simplified, people will startmaking the switch.The Telegraph reports that 14 million people may choose to switch current accounts. This is inaddition to a recent YouGov poll, which revealed that 62 per cent of UK respondents wanted aportable bank account number, a clear indication that if switching banks were made easier, peoplewould start shopping around.Fair or not, a bank’s social media presence, its voice and level of engagement and responsiveness,will play a part in shaping people’s perceptions of the bank, and factor into their ultimate choice.The story is pretty similar in the US. Polling by the Consumers Union in July 2012 showed that 20per cent of American customers had wanted to switch their checking accounts in the previous year(citing fee increases as the main cause), but didn’t because it was too difficult.It’s becoming impossible for banks to ignore social media, as Bank of America found out back in2011 when it tried to introduce $5 monthly fees for using a debit card. One 22-year-old customerstarted a change.org petition, the petition notched up over 300,000 signatures and the bankreversed its decision. (There are dozens of change.org petitions asking for banks to negotiate onhome loans rather than foreclose, and while these individual cases don’t attract huge numbers ofsignatures, they do appear to get the bank’s attention.)Managing social media engagement for financial organisations9
  10. 10. Setting the rules of engagementThe first rule of any financial organisation getting involved in socialmedia is to create strict social media guidelines for all staff. Ofcourse, these should set out what they may and may not do undercompliance regulations, but they should also set some of the ‘softer’rules of engagement. This includes the tone of voice, appropriateness ofresponses and so on, as well as laying out responsibilities for differentteams and editorial guidelines.These guidelines should be reviewed and updated at least every year,to take into account changes in social media technology. All staffshould be trained in social media use, and this training should also beupdated regularly, to ensure everyone understands the responsibility ofcommunity in a public, social, and heavily regulated environment.Escalation processes should be clearly laid out within these guidelines- what the social media team should do in the event of a crisis, orif a user posts something illegal or threatening on the bank’s onlinecommunity, for example.Set the expectations of each community. Agree what each socialmedia channel is for, and tell your community what to expect. If you’rerunning a customer service channel, tell your followers what responsetime they should expect (and stick to it).Be clear what you will and won’t allow from your community. What’syour policy on swearing, for example? Will you delete off-topic posts?What sort of behaviour are you trying to encourage, and what do youdiscourage? Set, write up and display the rules of your community, andbe very clear what action you’ll take if people break those rules. A goodlist of examples can be found on www.visiblebanking.com.Does the CEO tweet? And should he or she? Who are your brandadvocates on each channel and what control do you have over them?Decide what you want the ‘face’ of the organisation to look like.Christophe Langlois, author of Searching Finance’s A Practical Guide toSocial Media in Financial Services, cites Peter Aceto, the CEO of INGDirect in Canada as a good example of a tweeting CEO. But be warned,if your CEO is on Twitter, he or she should expect the occasionalcustomer to be in touch directly.Managing social media engagement for financial organisations10
  11. 11. Managing the community effectivelyAny community needs nurture, encouragement and careful management if it is to thrive.First, set your engagement strategy by audience. Each audience group will need different care;agree in advance how you will manage and communicate with them, and over what channels. Theway you manage a community with a student customer, for example, is unlikely to be appropriate fora business audience. Set out the tone, language and style to be used with each audience – that way,when you change community managers, you can be sure that there is consistency in your approach.Social media is all about dialogue, not monologue. In a heavily regulated industry, this can feel asthough it’s going against every instinct of a financial communicator, but it’s important. Be as social asyou can, within the confines of legal compliance.Managing a community takes time, effort and resource. It’s not enough to build a beautifulFacebook page, you have to run it. Consumers expect brands on social media to respond to them;if they ask a question, they want an answer. Resource the community properly, and encourageinteraction - it’s why you’re there. It’s also worth considering using a suitable tool which allows you tokeep track of, and manage, the conversations that team members are having with your community.Plan your content across all your channels. A bit of planning goes a long way, and puts you incontrol of your content. Create an editorial calendar that covers all your channels, so you know whatcompetitions, promotions, questions, polls and stories you’re going to run on all your social channels.First Direct kicks this process off with a meeting to plan content for the calendarGive people a reason to come back. If you want people tofollow you on Twitter or like you on Facebook, you have togive them a reason. That might be access to VIP services,or exclusive content, or competitions and sweepstakes.Replicating your website on Facebook isn’t enough of a reasonfor consumers to engage. Wells Fargo goes as far as to explainwhy you should like its Facebook page, with exclusive news,features and job postings among the ways customers areencouraged to return.Moderate the community. One of the quickest ways to turnpeople away from a community is to leave it un-moderated. Left alone, Facebook pages quickly fillup with spam and links to viruses shared among networks of friends, and rogue posters will soon getwise to the fact that they can get away with bad language, or even posting illegal or abusive content.Moderators within a community should be trained on escalation processes, to spot customer serviceissues that need addressing quickly, or an issue that needs resolution to avoid a full blown crisis.Don’t be afraid of criticism. Tempting as it might be to delete negative comments about yourproduct or service, it’s the quickest way to upset the community. Far better to deal with the problemthat’s caused the negative sentiment, and put it right, than simply delete the post. (For moreinformation on dealing with negativity in a community, see our paper on the subject atwww.emoderation.com/publications.)Managing social media engagement for financial organisations11
  12. 12. Managing social media engagement for financial organisations12Crisis and risk management over social mediaCitibank faced an interesting situation when members of theOccupy Wall Street movement staged a protest in a Citibankoffice in New York. Supposedly, the protesters were demandingto close their accounts, and news was quickly reported thatCitibank had got the police involved, and a reported 23 peoplewere arrested. Citibank was widely criticised for what theTwitterverse was calling “the stupidest public relations move inhistory.” The video of the arrests went viral.But Citibank reacted in a rather unexpected way. Instead ofclosing ranks, the Chairman played an alternative video of the protesters’ action at a social mediaconference (showing that they weren’t simply “closing their accounts”) and let customers make uptheir own minds about the arrests.HSBC used Twitter to update its customers when a numberof its cashpoints failed in November 2011, and was widelypraised for the way it handled communications from frustratedcustomers, keeping them updated and personalising responses.This is a great example to show that you can’t always control theproblem, but you can control the way you respond.Spotting and managing a crisis over social media is a major part of social media management today.For detailed information and practical advice on how to manage a social media crisis, see our whitepaper on managing a social media crisis, on www.emoderation.com/publications.Finance just got socialDespite the challenges posed by legal restrictions and regulations, banks and other financialorganisations are finding innovative ways to use social media within a strict legal framework. Socialmedia isn’t simply another marketing channel for banks, it’s a way of engaging customers, of solvingproblems, and of researching and testing new products. Social media channels are creating entirelynew ways of reaching, interacting with and doing business with finance audiences.As a result, the culture of finance is changing, to become more open and more engaging. Moresocial, in fact.Source: The Realtime Report
  13. 13. Managing social media engagement for financial organisations13Reading recommendationsIf you’re interested in reading more, we thoroughly recommend Christope Langlois’ book, A PracticalGuide to Social Media in Financial Services.He also gives case studies on YouTube:UK Banks Leverage Social Media to Target Students (1/2): HSBCUK Banks Leverage Social Media to Target Students (2/2): Santander’s I Love £50 FacebookContest Barclays’ 100 VoicesAbout eModerationeModeration is a social media management agency which works with some of the world’s biggestbrands. Based in London UK, with offices in Los Angeles and New York, eModeration provides multi-lingual community management and moderation services, and social media consultancy and crisismanagement training and simulations to clients in a wide range of industry sectors. These include:kids and entertainment, FMCG, financial services, pharmaceutical, publishing, media and telecoms.Committed to providing a safe and engaging social media experience for children and adults,eModeration’s CEO Tamara Littleton has over 11 years’ experience of community and social mediamanagement and moderation. She has also advised the UK government on guidelines for childsafety.For further press information, or to speak to Tamara Littleton, CEO of eModeration, please contact:Kate HartleyCarrot CommunicationsTel: +44 (0)771 406 5233E: emoderation@carrotcomms.co.ukTwitter: @katehartleyeModeration Ltd, The Media Village, 131-151 Great Titchfield St, London W1W 5BB UKTel: +44 (0) 203 178 5050© eModeration Limited 2013. This document is the intellectual property of eModeration Limited andmay not be duplicated or disclosed to any third party without the written permission of an authorisedofficer of the company.