Developing and Deploying a Social Media Strategy forFinancial InstitutionsConsumer Insights BriefOctober 2011Paul McAdam, ...
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Developing and Deploying a Social Media Strategy for Financial Institutions

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Social media has made it to the big leagues though financial institutions do not yet place a high level of importance on social media compared with other points of contact with customers. Launching and maintaining a financial institution’s social media presence is daunting but it has become imperative to converse with consumers on their terms, which increasingly include social media conversations. Building a strategic plan for developing and deploying a financial institution’s social media presence can be divided into four steps: 1) planning, 2) monitoring, 3) contributing, and 4) measuring.

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Developing and Deploying a Social Media Strategy for Financial Institutions

  1. 1. Developing and Deploying a Social Media Strategy forFinancial InstitutionsConsumer Insights BriefOctober 2011Paul McAdam, SVP of Research and Thought Leadership, FISMandy Putnam, Director of Research and Thought Leadership, FISwww.fisglobal.com
  2. 2. Developing and Deploying a Social Media Strategy for Financial InstitutionsThe Social Media ImperativeSocial media has made it to the big leagues. Most days and most newscasts can’t go without at least one storyabout Facebook, a YouTube viral video, or some new announcement a celebrity or politician made via Twitter.Only Google tops Facebook and YouTube for pure number of Internet visitors (Figure 1). Social media consumes22 percent of all time online.1 Figure 1: Top Social Channels in the Internet Sources: Alexa.com, July 2011 and Google Ad Planner, July 2011.Just like the general population, banking consumers are spending time in social media, too. Overall, 70 percentof banking consumers are using Facebook, and 27 percent are using YouTube — the two most popular sitesamong banking customers (Figure 2). Figure 2: Top Social Channels by Banking Consumers 70% 69% Facebook 67% 72% 74% 29% 26% YouTube 24% 23% 34% 20% 17% MySpace 18% 18% 29% 17% Top 10 banks 13% Twitter 12% 10% 19% Banks 11 to 50 12% 11% Credit unions LinkedIn 6% 9% 6% 12% Community and small regional banks 14% Classmates.com 14% 13% Other FIs 9% Source: FIS Enterprise Strategy, “Consumer Mobile Banking Research,” February 2011, n=4,002. 2© 2011 Fidelity National Information Services, Inc. and its subsidiaries.
  3. 3. Developing and Deploying a Social Media Strategy for Financial InstitutionsDespite the rapid adoption of social media across consumer segments, financial institutions do not place a highlevel of importance on social media channels compared with other points of contact with customers. Less thanone in five executives recently interviewed by FIS™ Enterprise Strategy rated social media as important (Figure3). Figure 3: Importance of Channels to Financial Institution (top 2- box score on 7-point scale) Online banking 93% Branches 71% ATM machines 70% Call Center (live rep) 55% IVR / Automated telephone banking 48% Mobile banking 43% Social media 18% Self-service kiosks and/or video banking 6% Source: FIS Enterprise Strategy, “Voice of the Customer,” August 2011; n = 351However, results from a November 2010 survey by Aite indicated that 79 percent of banks have at least begunefforts in social media. Facebook is the most popular social media site for financial institutions, followed byTwitter, YouTube, and LinkedIn.5 Most banks use a selective mix of social media sites (Figure 4). 3© 2011 Fidelity National Information Services, Inc. and its subsidiaries.
  4. 4. Developing and Deploying a Social Media Strategy for Financial InstitutionsAlthough the list includes only large financial institutions, social media can be used effectively by smaller banksand credit unions to connect with customers. In fact, reports show that smaller banks and credit unions havesignificantly more success getting their customers to “like” them — one “like” out of 50 customers versus one“like” out of every 710 customers for banks overall.6If you are involved in launching or maintaining your financial institution’s social media presence, you have a bigtask ahead of you. The social media landscape is massive and constantly changing. Consumer preferences areevolving and their demand for meaningful interaction online is ever-growing. But, it has become imperative toconverse with consumers on their terms, which increasingly include social media conversations, in order tocapture value especially from younger generations. “Deciding whether to get involved means deciding if you want to be part of the conversation…There will be a conversation with or without you…If you don’t use social media, then your business will go elsewhere.” – Hadley Stern, Vice President at Fidelity Labs, a division of Fidelity Investments 4© 2011 Fidelity National Information Services, Inc. and its subsidiaries.
  5. 5. Developing and Deploying a Social Media Strategy for Financial InstitutionsBuilding a strategic plan for developing and deploying a financial institution’s social media presence can bedivided into four steps (Figure 5). Your program will start at step one and continue on, but all four steps shouldbe constantly reviewed and reiterated as necessary: Figure 5: Steps in Building Social Media Presence 1. Planning 4. 2. Measuring Monitoring 3. Contributing Source: FIS Enterprise Strategy, July 2011.Planning a Social Media StrategyDetermine business objectivesAs with any other business initiative, a social media strategy should begin with goals. When looking at the socialmedia playground, it’s easy to begin building goals that are tailored to the social media’s strengths, e.g. “Peoplecan ‘like’ our Facebook page. Let’s build up to 1,000 ‘like’s’!”But goals like those put the cart before the horse. The objectives of your social media program must be tieddirectly to your overall corporate goals, or else they have no meaning. What does your financial institution caremost about: customer satisfaction ratings? Loyalty? Involvement in the local community? Your social mediagoals should feed directly into those goals.Aite found that the most common business objectives of the social media programs of financial institutions areengaging customers (63%), building brand awareness (58%), building brand affinity (57%), retaining customers(41%), and managing corporate reputation (40%).7How will your social media presence help your institution reach its goals? To maximize success, look at the waysthat your consumers want to interact with you online. Forrester surveyed more than 2,500 consumers andfound the top ways that they would like to interact with their banks on social networking sites:8 5© 2011 Fidelity National Information Services, Inc. and its subsidiaries.
  6. 6. Developing and Deploying a Social Media Strategy for Financial Institutions1. Alert me about upcoming products or special offers2. Offer financial advice3. Offer customer service (e.g. help with questions, complaints, etc.)4. Present relevant financial service promotional offers to meFIS and the Babson Consulting Alliance Program surveyed Generation Y consumers about specific ways that theywould be likely to interact with their bank and found the following (Figure 6): Figure 6: Potential Ways for Gen Y Members to Interact with Banks Social media activity % likely to participate Use mobile applications to access your financial information 60% Read reviews of your bank 33% Follow your bank on Twitter 19% “Like” your bank on Facebook 15% Post reviews of your bank 15% Subscribe to a savings social network 15% Watch a YouTube video from your bank or financial institution 13% Discuss your bank or financial activities on a blog or community 8% forum “Check into” your bank on Foursquare 7% Source: Babson Consulting Alliance Program survey, 2011. n = 70.A “social media audit” is a great tool for building a plan for reaching your social media goals. A social media auditcovers both internal and external resources to find information such as: Social media channels already in use by individual business units Competitor social media strategies Benchmarks for the social media program The social media channels that are best suited to meet the business objectives The role social media will play within the current marketing, sales and customer service strategiesAddress compliance and securityAfter getting a clearer picture of the social media goals and channels to be used, the next issue to be addressedbefore any social media communications begin is regulation compliance and security. Two regulations havespecifically addressed social media: SEC rule 17a-4 and NASD Rules 2210, 2211, and 3110 require retention of all business-related electronic communications for a minimum of three years, including social content. FINRA (Financial Regulatory Authority) issued Regulatory Notice 10-06 to broker-dealers to emphasize the importance of extending good governance practices to social media. 6© 2011 Fidelity National Information Services, Inc. and its subsidiaries.
  7. 7. Developing and Deploying a Social Media Strategy for Financial InstitutionsThe SEC regulation can be covered with a few meetings with your IT department to make sure any social mediachannels you participate in are recorded and stored. The FINRA regulation, though, is both broader and moreimpactful. It only applies to broker-dealers who are under SEC regulation, but it is being seen as a bellwether forthe direction of any other regulation that is to come.Forrester Research studied the FINRA regulation and found three particular themes from its guidance:9 Where possible, the rules you follow in other media should apply to social media. Customer posts are not attributable to financial services firms. Firms can engage users in real-time social conversations without compliance preapproval.Before beginning any social media initiatives, double-check on the latest regulation guidance to come out andwith your own legal department to make sure your parameters for operating in the social media space aredefined.Also, communicate proactively to consumers to inform them that their personal financial information is keptseparate from social media communications. For example, Bank of America notes in its disclaimer on Twitter:“Bank of America will never ask you to disclose your social security number, financial account information or PINvia Twitter.”Monitoring the Social Media LandscapeListen to the conversationConversations about your bank are already happening. People are already posting comments on Twitter, blogs,and review sites about your institution. American Banker reviewed social media in the fourth quarter of 2010and found the number of times some of the biggest financial institutions were mentioned:10 Figure 7: Conversations in Social Media Networks, October − December 2010 1. American Express 81,084 mentions 2. Citibank 80,903 mentions 3. Bank of America 75,167 mentions 4. Wells Fargo 48,498 mentions 5. Capital One 12,402 mentions 6. U.S. Bank 6,931 mentions 7. JP Morgan Chase 4,368 mentions Source: American Banker, Q:4 2010. 7© 2011 Fidelity National Information Services, Inc. and its subsidiaries.
  8. 8. Developing and Deploying a Social Media Strategy for Financial InstitutionsThe first thing your institution needs to do is hear what is being said. This will allow you to: Know what is on the minds of your consumers, the things they care most about, the problems they are currently having Prioritize your communication, when it begins, on the channels where your customers already have their strongest presence Eventually, to respond to questions, complaints and comments that get postedUse tools like Google Alerts (www.google.com/alerts) and Twitter Search (search.twitter.com/advanced) to findthese conversations. In addition to your institution name, you should set up searches for product names,searches within a local radius, and other keywords that go to the heart of your bank’s offerings and goals. If yourbank is a larger institution, you may want to look into social media monitoring tools such as Radian6 that will notonly find the conversations, but help you analyze the sentiments they express and summarize the opinions beingdiscussed.Once you’re listening, then you can begin to participate and to offer your own content in the social media world.Contributing to the Social Media ConversationFocus on engagement versus sellingParticipants in social media expect to interact informally and “authentically” with each other, whether thoseparticipants are people or corporate representatives. “Authentic” is a key term in social media that summarizesthis expectation that people have. Hard-core, direct-sales messaging is a big turn-off.This is one of the ways that a social media audit is very useful: to get a look at the programs and messages towhich your consumers respond the most favorably.Some of the more effective ways to communicate in social media channels concentrate on: Two-way conversation Information that is relevant to the audience Simple, conventional language Photos and videos that give a face/a “personal touch” to an institution StorytellingA great way to engage customers is through simple loyalty gifts that surprise and delight customers. USBankerfound that North Shore Bank in Brookfield, Wisconsin gave $5 Subway gift cards to the people who had becomeFoursquare “mayors” (checked in at the locations most often) at each of its branches. The unexpected gesturegenerated so much good will that some blogs picked up on the happy responses and wrote stories highlightingit, providing the bank with a big return on its small investment. 11Use social media to facilitate responsivenessSocial media can be used to respond more quickly and cost-effectively to customer questions, concerns, andcomplaints. This is the most basic way to participate in social media and is an imperative for modern companies.As one financial eBusiness coordinator told us, monitoring social media can help mitigate the impact ofpotentially damaging publicity. 8© 2011 Fidelity National Information Services, Inc. and its subsidiaries.
  9. 9. Developing and Deploying a Social Media Strategy for Financial Institutions“Social media has more opportunity than risk. Better to be out there than not. We canlisten: the good, bad or otherwise, we can address it. If we weren’t out there, thenthere’s no telling how big or how far something negative may be able to spread if wecouldn’t participate.” – eBusiness coordinator from financial institutionEveryone has heard the stories of customer complaints that went “viral,” creating huge headaches for thecompany and damaging public reputation. And on the other hand, companies that want to promote theirresponsiveness and service have unprecedentedly powerful tools in Twitter, their Facebook pages, andresponses to review sites.Execute targeted social media programs based on core competencies and customer expectations“Social media” encompasses a stunning array of websites and communication channels (Figure 8), most of whichallow the freedom to communicate and build campaigns that are bounded only by your creativity.12 It’s notpossible to have a “social media presence” everywhere. Your program must selectively choose where and howto get involved.Figure 8: Social Media ChannelsSource: www.fredcavazza.net, 2011. 9© 2011 Fidelity National Information Services, Inc. and its subsidiaries.
  10. 10. Developing and Deploying a Social Media Strategy for Financial InstitutionsThis is where you will use the assessment of your business objectives and your social media audit to build thestrategy that will target your objectives and your target audience. Choose your campaign programs wisely: it isfar better to excel at one or two presence points than to try to take on too many channels and not reallysucceed at any.Your social media audit of your competitors and social channel opportunities will help you get an idea ofprogram possibilities. Some examples include: Citigroup offers a social media platform called Women & Co. (www.womenandco.com) to target its female audience with blogs, events, newsletters, and discussion tools all geared toward financial education and issues. ING offers a blog called “We the Savers” (www.wethesavers.com) with life stories, advice, and encouragement for saving money. Multiple writers contribute to the blog to provide a variety of perspectives and life situations. Bank of America has a strong presence on Twitter, featuring multiple accounts for service, news, careers, etc. Its primary focus is on the service (www.twitter.com/BofA_Help), offering a Twitter-based customer service line that is staffed to receive and look for questions to answer. American Express promotes “Small Business Saturday” through a Facebook page (www.facebook/com/SmallBusinessSaturday) to emphasize the importance of small business to the community. Currency Marketing created the Young & Free campaign (www.youngfreehq.com) as a vehicle for credit unions to reach young consumers by offering them pertinent information about finances for members of their generation. Communications are conveyed in an informal, non-patronizing manner that steers clear of sales-oriented language.Speak to corporate social responsibility (CSR) initiativesSocial media is especially well-suited to working hand-in-hand with your corporate social responsibility initiatives.They’re popular to crowdsource for public involvement while providing high visibility and good exposure to yourCSR efforts. Financial institutions can use social media involvement to help decide how charitable donations areallocated or to promote involvement in a charitable organization. For example: JP Morgan Chase’s Community Giving program on Facebook (www.facebook.com/ChaseCommunityGiving) has generated more than 2.9 million “likes.” Chase continually solicits consumer voting on the winning 100 charities that will receive funding. TD Bank’s Twitter handle @TDFEF involves its customers in discussions about the allocation of resources for TD’s Friends of the Environment Foundation (www.fef.td.com).Measuring the Social Media ResultsAs with any corporate initiative, measurement and assessment is an important part of the social media program.The work you did at the beginning of the program, identifying the corporate objectives your social mediaprograms will address and the benchmarks that they will be measured against, will help you to identify themetrics you need to track and where you want them to be. 10© 2011 Fidelity National Information Services, Inc. and its subsidiaries.
  11. 11. Developing and Deploying a Social Media Strategy for Financial InstitutionsFrom the most generic to the most objective-targeted, some ideas of the metrics you might use to measure yoursocial media programs are: Traffic: The number of Twitter followers, Facebook fans, or views on YouTube will show the raw amount of attention your programs are receiving. Increased website traffic or traffic to the company blog will show secondary results that your social media presence can bring. Interaction: Customer participation demonstrates that the company has engaged its audience. Interaction can be measured by measurements like the number of comments the blog or Facebook page has received, Twitter replies, or participation in forums. Brand Mentions: Word of mouth and the viral nature of social media have the ability to drastically increase brand mentions. Tracking the number and types (positive vs. negative or neutral) of mentions online will help demonstrate whether your social media efforts are raising brand or product awareness. This metric can be measured using tools such as Google Alerts, Radian6, or Trackur. Sales: Where possible, referrals from social media to the sales channel should be tracked. Dell tracked referrals from its Twitter handle and found it had gained $3 million worth of sales in the two years that it had been on Twitter.13SummaryA social media program doesn’t end with one trip through the Planning – Monitoring – Contributing – Measuringcycle. Measurements of results, new institution business goals, and fresh audits of the social media landscapewill constantly feed new adjustments and ideas for the social media program. A successful program willcontinuously visit all parts of the developing and deploying cycle: Planning a Social Media Strategy – Determine business objectives – Address compliance and security Monitoring the Social Media Landscape – Listen to the conversation Contributing to the Social Media Conversation – Focus on engagement versus selling – Use social media to facilitate responsiveness – Execute targeted social media programs based on core competencies and customer expectations – Speak to corporate social responsibility initiatives (CSR) initiatives Measuring the Social Media ResultsThese are the cornerstones of a successful social media program. The social media conversation is occurringwith or without your brand’s participation. It is becoming increasingly critical that financial institutions developand deploy a social media plan that aligns with its overall corporate goals. 11© 2011 Fidelity National Information Services, Inc. and its subsidiaries.
  12. 12. Developing and Deploying a Social Media Strategy for Financial InstitutionsCitations1 Nielsenwire, June 2010.2 Alexa.com, July 2011.3 Google Ad Planner, July 2011.4 “Consumer Mobile Banking Research,” FIS Enterprise Strategy, February 2011, n=4,002.5 “Social Media at the Starting Blocks: A Look at Financial Institutions in Europe and the United States,” Aite Group, November 2010.6 “How Many Facebook Fans Can Financial Institutions Expect?” The FinancialBrand.com, March 7, 2011.7 “Social Media at the Starting Blocks: A Look at Financial Institutions in Europe and the United States,” Aite Group, November 2010.8 “How US Financial Firms Should Approach Interacting with Consumers on Social Web Sites,” Forrester Research, Inc., October, 2010.9 “Social Media Marketing for Financial Services,” Forrester Research, Inc., September 2010.10 American Banker, Q:4 2010.11 “Rethinking Rewards,” USBanker, May 2011.12 www.fredcavazza.net, 201113 “Dude — Dell’s Making Money Off Twitter!,” Wired.com, June 2009.About the ResearchDeveloping and Deploying a Social Media Strategy for Financial Institutions is derived from a research projectconducted by MBA candidates for the class of 2012 at Babson College’s F.W. Olin School of Business andmanaged by FIS Enterprise Strategy. The research findings herein are based on: 1) secondary research on socialmedia, 2) executive interviews with social media experts and financial institution executives, 3) qualitativeresearch conducted with Babson peers, 4) a 10-question survey completed by about 70 Babson students, and 5)FIS™ Enterprise Strategy research studies.The study’s primary objective was to determine how banks can leverage social media to capture value fromconsumers, especially adult members of Generation Y (born between 1980 and 1990).About FISFIS (NYSE: FIS) is the world’s largest global provider dedicated to banking and payments technologies. With along history deeply rooted in the financial services sector, FIS serves more than 14,000 institutions in over 100countries. Headquartered in Jacksonville, Fla., FIS employs more than 32,000 people worldwide and holdsleadership positions in payment processing and banking solutions, providing software, services and outsourcingof the technology that drives financial institutions. FIS is ranked 426 on the Fortune 500, is a member ofStandard & Poor’s 500® Index and consistently holds a leading ranking in the annual FinTech 100 list.Developing and Deploying a Social Media Strategy for Financial Institutions was authored by Paul McAdam, SVPof Research and Thought Leadership at FIS, Mandy Putnam, Director of Research and Thought Leadership at FISand Abigail Burnham and Donald Chapman, MBA candidates for the class of 2012 at Babson College’s F.W. OlinSchool of Business. 12© 2011 Fidelity National Information Services, Inc. and its subsidiaries.
  13. 13. Developing and Deploying a Social Media Strategy for Financial InstitutionsPlease contact Paul McAdam or Mandy Putnam if you have questions about the research or how the resultsapply to your financial institution.Paul McAdamPh: 708.449.7743paul.mcadam@fisglobal.comMandy PutnamPh: 614.414.4207mandy.putnam@fisglobal.com 13© 2011 Fidelity National Information Services, Inc. and its subsidiaries.

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