Report: Social Media. Catching up with the banks. 2011.
Social MediaCatching up with the Banks
2 MHP Communications Social Media - Catching up with the Banks Autumn 2011ForewordThe use of social media is a relatively new concept for banks, and one that poses numerous challenges. The banking sector is moreheavily regulated than many other industries, and whilst technology is a key driver for banks to ensure competitiveness, orchestratinga strategic approach towards social media has been pushed back for a number of years. As a result the banking industry has fallenbehind in its approach to this new form of media, but there are now a range of successful examples of how banks can benefit fromcarefully planned social media engagement programmes. These can range from improving corporate reputation to creating a bettercustomer experience to using platforms as easily accesible news distribution channels. At the same time social media has becomeso common that it is now by definition mainstream, and the line between traditional and digital media has undoubtedly blurred at theedges.Against this background, MHP Communications conducted a survey amongst heads of communications and PR managers at globalbanks, asking them for insight into their use of social media, what the most relevant platforms are and how they create content forsocial media purposes. This report summarises the key findings, which include the following:• Banks and financial institutions are behind the curve when it comes to using social media as a communications tool. They are catching up, but there is still a high level of uncertainty regarding how to best utilise it.• When it comes to external communications, the banking industry is characterised by confusion over regulatory responsibilities as well as concerns about the loss of control when interacting with social media platforms.• Twitter is identified as the key social media platform for the banking industry, and the challenge is how to make better use of its potential.• Print publications and traditional outlets such as newswires are still seen by banks as the most important and valuable way of communicating with clients, investors and other stakeholders.• As expected, there are differences between retail and investment banks regarding appetite for interacting with social media and its relevance to the business.This research also shows that the banking industry has acknowledged the potential of social media, and banks are increasingly steppingup their social media activity. What is important now is the correct guidance and an expert understanding of how to navigate acomplex social media landscape, what rules to follow and where to prioritise time and resources.We hope you find this report interesting and stimulating, and as the UK’s leading digital PR agency for 2011 (New Media Age) withextensive expertise in the banking and capital markets sector, we look forward to your feedback.Andrew NicollsManaging Director, MHP Communicationsandrew.email@example.com
MHP Communications Social Media - Catching up with the Banks Autumn 2011 3How banks use social mediaIn August 2011, MHP Communications conducted a survey amongst the heads of communications and public relations specialists atmore than 35 global banks to gain an understanding into social media habits across the banking industry. In broad terms, use of socialmedia is high with the majority of respondents (53%), using social media both in a private and a business capacity. 30% use socialmedia outside of a work context and 3% for business purposes only. 15% of all respondents do not use social media at all, which is ahigh percentage given that social media generally sits under the communications department’s remit. Whilst social media has becomea mainstream activity, it is notable that more respondents use social media for personal means than in a business context.When looking at the purpose of social media, itis widely seen as a good source of informationon what is happening in the media (75% ofrespondents). Interestingly it is less seen asa direct route to the customer, but more tocommunicate broadly and advertise productsand solutions: More than two thirds say theyuse social media for communications andpublic relations purposes, whereas 42% use itfor marketing and sales activities. Customerservice is a key purpose for 25% only.In the retail banking sector social mediahas a more established footprint than in theinvestment banking world. This follows thelogical conclusion that for customer serviceand customer engagement purposes the massconsumer market is appreciative of being ableto communicate with banks through thesenew, yet very much established platforms. Andbanks are increasingly keen to appear morecustomer-friendly whilst tackling the imagethe sector has as consisting of traditional andstaid organisations.In the investment banking world social media takes on a different purpose, and has even become a platform to be feared and avoided.It is also not seen as a traditional direct route to clients. This is changing however, and one senior PR manager commented that thebank’s trading desk recently received a client request for traders to be given access to Twitter to monitor and engage with clientcomments throughout the trading day.
4 MHP Communications Social Media - Catching up with the Banks Autumn 2011The use of social media within the internal communications function is relevant for around one third of respondents (36%) – whichrepresents a vast untapped potential given the range of opportunities to share knowledge and information internally that social mediacreates. Free tools such as Yammer, Twitter with protected tweets or Google+ with individual circles make information available onlyto a selection of people, so they can be used to streamline internal communication processes. However, and this is a key problem for aheavily regulated industry such as the banking sector, social media platforms are provided by external third parties. Any shared datawhich is of a sensitive or confidential naturewill in many cases be stored on the provider’sservers which may not provide sufficientprotection or peace of mind for the bankingsector.Most providers are based in the US wherelegislation may, under certain circumstances,require them to reveal their clients’ identitiesor other data. Also, social media platformproviders are commercial operationsand there is the risk that data is misused,misplaced or falsely allocated. Many banksfeel that sensitive data should only be storedand transmitted on their own infrastructureto ensure full compliance. At the sametime, regulatory bodies such as the FinancialServices Authority (FSA) in the UK aim tomake social media more widely user-friendlyfor banks by publishing guidelines andrecommendations. As a consequence there isa high level of insecurity as to what can andcannot be done.Despite these issues, social media is now seen as forming a strategic part of a communications programme rather than representingsolely a tactical activity, with 84% of banks now having a specific social media strategy. Nearly one third has started to execute astrategy, and 15% have a fully developed strategy in place. More than 40% are currently in the process of creating a strategy, and only16% have not started thinking about or have decided not to have a social media strategy in place.A number of banks do have a social media strategy, but no defined goals for the strategy: 27% responded that they have not establishedspecific goals for their social media strategy. Measuring the success of a social media programme is perceived to be more complicatedthan for traditional PR which may explain why metrics and, in effect, goals remain vague.
MHP Communications Social Media - Catching up with the Banks Autumn 2011 5Why banks use social mediaFor the majority of banks, social media is about building awareness with customers (63%) and creating visibility with partnersand investors (55%). Nearly 50% see social media as an extended PR tool or one that should help strengthen relations with the(traditional) media. This shows a sound understanding of the influence social media has in a communications environment. There arenow thousands of journalists in the UK using Twitter and Facebook, and both have recently launched official guides for journalists. Ithas become increasingly common over recent years for traditional media such as print publications, TV and radio stations to mentionblogs and bloggers, or to quote tweets. In addition, Twitter, Facebook and Google+ are additional channels to engage in a directdialogue with journalists. This enables banks to interact and offer spokespeople for commentary and background information, invitejournalists to events and retweet or “like” their status, thus building on existing personal relationships.For 46% of banks, social media is about attracting talent. Many employers now seek their employees purely on platforms offeringdirect contact, such as LinkedIn, where potential candidates can be easily identified and filtered. 45% want to use social media to raisetheir profile across the board, and 36% aim to generate direct sales. Success stories such as Dell’s increase in sales through Twitter -which was tracked by directing users to specific URLs - may not be easily replicable in the banking industry. But they demonstratehow a well planned and executed strategy can have a measurable positive impact.Around one third of bank respondents agreed that social media would help them with, and pre-empt their need for, crisis managementactivity. This seems a fairly low figure given the high level of uncertainty in the industry and the real-time impact that a statement onTwitter could have in stopping the rumour mill grinding and contributing to a downward impact on share prices, for example. Whilstit may not replace traditional routes of communication, social media can certainly supplement them. Any direct engagement can bebeneficial in a crisis situation, and those banks already doing so have taken an important first step which they can use to improve theircrisis management strategies and processes.Nearly all banks think that social media gives their corporation a competitive edge. 55% said they can respond more quickly toenquiries and market rumours, and 48% said they can engage with journalists and traditional media more easily. 41% think socialmedia is an effective way to deal with sceptical customers. For one respondent, social media is a good way to deal with happy clients,therefore creating an additional channel to strengthen the customer relationship rather than a route only to be used in times of crisis.However, a quarter of respondents think that the impact of social media is limited, and several also cited loss of control as an issue. Asone respondent put it, “social media are much less scrupulous about the truth, hence [it is] much more difficult for PRs dealing withunsecured rumours that crop up on blogs”.
6 MHP Communications Social Media - Catching up with the Banks Autumn 2011Loss of control and regulation as barriers“The Wikipedia information is definitely reliable because I wrote it”When it comes to perceived barriers to banks further engaging with social media outlets, 52% mention regulatory issues, whereas 40%cite time and budget constraints as the main obstacles. 36% say that social media does not naturally fit in their current organisationstructure and requires additional resources to create and curate content. 12% said they do not know how to identify “real” customerswithin social media platforms so they cannot properly engage with them.The loss of control over the messageand story however is the main concern forcommunications professionals at banks (56%).Another 20% said that their greatest fear issocial media platforms taking content outof context. This brings to light a dilemma forcommunications professionals. Most of thetime a press release is re-written by a journalistworking for a traditional publication as theyadd their own take on the story, and a live TVinterview may lead to unexpected questionsfrom the interviewer. In other words, there is nofull control over the message in the traditionalcommunications business, and this is similar tosocial media activity. Most bloggers adhere tojournalistic conventions, and the ones that donot and take stories out of context are usuallyregarded to be irrelevant. Bloggers need towork according to journalistic standards if theywant to build a trustworthy reputation. Thisin turn is necessary if they intend to monetisetheir work. In most cases the loss of control insocial media seems to be a perception ratherthan a fact based on personal experience.Loss of control can also be caused by unclear messaging guidelines or employees breaching security policies. Strict guidelinesregarding the use of social media are common in banks, and social media is generally banned from desktops completely: “Noteveryone in the organisation has access to social media, it is granted only to those whose job requires it.” This may however stifleinnovation and prevent banks from adopting new technology. According to recent research by internet security company Clearswift,18% of employees would be de-motivated by a stricter policy on social networking introduced by their employers, and 19% would try towork around the rules. 4% would even consider leaving, indicating that many employees have now become fully accustomed to using
MHP Communications Social Media - Catching up with the Banks Autumn 2011 7social media as a means of sharing information and data, and feel entitled to access it.The vast majority of banks (73%) think that compared with other industries they are behind but catching up in their social mediaengagement and activity. 13% of banks think this is the case because social media is not relevant to their business, and 13% think theirsocial media engagement is not really different to other industries. No bank thinks they are doing a better job than most, reflecting thecautious attitude and insecurity towards social media that is deep-seated within the industry. Asked for the reasons why banks have fallen behind, one communications expert said that the US is ahead of the curve as there are whole teams handling interaction with social media, but it’s less relevant in Europe. According to another PR specialist, “we have regulatory restraints other industries do not have. We’re behind mainly because of regulation.” These concerns are not necessarily perceived as insurmountable obstacles: “We’re less advanced because social media policy is generally driven by a very risk averse compliance structure and culture”, said one senior head of communications. Actually, 50% of banks are either fully aware or have at least a basic understanding of regulatory requirements, whereas 27% said they are aware that there is regulation but they are not sure what it looks like and how it affects them.Against this background it is surprising that 35% think that the industry is under-regulated. Regulation is already seen as a barrier as itrequires additional resources to understand the different requirements, track frequent developments and to make sure everyone in theorganisation uses social media in compliance with the relevant rules. The demand for more regulation shows that existing guidelinesdo not sufficiently clarify what can or cannot be done in the social media sphere, and that there is a need for action. It also meansthat banks are prepared to invest more in additional resources if this ensures they are compliant. Only 23% think the level of industryregulation is well balanced, and for 8% the industry is over-regulated.
8 MHP Communications Social Media - Catching up with the Banks Autumn 2011Keeping an eye on digital conversationsNearly one third of banks (31%) say that there is little conversation about them or issues of relevance to their organisation takingplace on social media sites. This is a surprisingly high figure, and either indicates that the visibility of banking brands across socialmedia outlets is low, or that banks fail to fully engage with their stakeholders. In addition, 27% said that there are ongoing digitalconversations about them, but that they are not actively involved in engaging in these conversations. 15% said that they are welldiscussed and referenced in ongoing social media conversations. A very active 4% said that they drive most of the social mediaconversations about their brand themselves – which requires a social media strategy including tactics, metrics for evaluation as wellas monitoring infrastructure.When asked how they monitor online conversations, 39% of respondents referenced Google alerts, which is a surprisingly low figure.Google is apparently not seen as an appropriate tool to efficiently monitor online conversations, but rather as one to get an overview of a brand’s online mentions. Given the free and real-time nature of Google alerts this is one avenue that the banking sector should investigate as an easy method of monitoring online mentions. 27% use free tools such as Social Mention, feed readers or Twitter’s search function, and 11% and 12% respectively use paid-for tools such as Radian6 or proprietary in-house technology. 23% have outsourced the monitoring of online conversations to their PR agency, whereas 15% do not currently monitor conversations in the digital space at all. Also, nearly one fifth (19%) do not know whether and how their corporation monitors conversations. This is a very high figure given that the communications function needs to be up to speed on where their brand is mentioned so they can react and influence messages. A combination of free, paid-for and proprietary technology can help to provide a detailed insight into online mentions which can beaggregated and displayed in the most effective way. 79% use their own brand and/or company name(s) for online monitoring, and 73%track mentions of the issues related to their companies. 59% search for names of their own key staff and 56% for their competitors.Only 8% monitor names of key staff at competitors. Respondents also mentioned they search for key deals, key journalists, productsand services offered by their company and industry-relevant keywords.
MHP Communications Social Media - Catching up with the Banks Autumn 2011 9The importance of media outlets“Our job is about making everything we communicate as accurate as possible and the way we want to get our message out is thereforevia respected journalists and publications.”When asked which platform has the most impact on their brand, the results are clearly the ‘traditional’ media. Mentions in traditionalmedia are - still - seen amongst the banking community as more important than digital coverage or online conversations. For themajority of respondents, print coverage in national newspapers such as the FT has the highest impact on their reputation and brand.For one senior communications manager, “a printed article in the FT is more important than anything else – this is different for otheraudiences though.” A broadcast mention in a TV or radio show has the second highest rating. Print coverage in relevant industry tradepublications comes third, followed by a mention on an influential blog. Twitter mentions and retweets (that can generate web traffic)are seen as having a lower impact than blog mentions, but are valued as having a higher impact than wall posts, viral videos and othersocial media “buzz”.Looking into this in more detail, three differenttrust categories have emerged: LinkedIn andWikipedia are seen as being very reliableresources; Twitter, Facebook and YouTubetend to be seen as more unreliable; andQuora and FourSquare are too unknown to besignificant. 64% think LinkedIn is a trustworthysource. Equally 64% of respondents say thatWikipedia is very reliable or reliable. Onesenior respondent commented: “Inaccuracyis the biggest headache and Twitter is muchmore based on rumour than fact. I am morelikely to trust Wikipedia as a factual sourceof information.” However, given the nature ofWikipedia to be edited by anyone this can bea dangerous approach. Wikipedia entries arein a constant state of change which requiresconstant monitoring and, when necessary,editing to restore facts and delete rumoursor inaccuracies. 25% of banks think Twitter isreliable, for Facebook the value is 17% and YouTube is being seen as reliable by only 9%. One third said that information on Facebookis unreliable or even very unreliable, whereas 42% think that Twitter’s value varies greatly. For YouTube this figure is 30% and forFacebook 29%. Newer platforms such as Foursquare (83%) and Quora (91%) are unknown or not used by the majority of bankingcommunications professionals, so most respondents are unsure about their significance.When it comes to assessing the importance of the various platforms over the next 12 months, Twitter is the clear winner. 50% of
10 MHP Communications Social Media - Catching up with the Banks Autumn 2011banks think the platform will become more important, and another 8% think it will become much more important. 48% think LinkedInwill become much more or more important, whereas – despite its lack in trustworthiness – the value for YouTube is 43%. Over athird (36%) said that Facebook’s importance will grow in the next year, however 4% also thought its importance would reduce. Ingeneral however these responses show that the vast majority of respondents think that most social media platforms will become moreimportant in the future. Very few communications experts think that social media will become less relevant. However, one respondentclarified that these platforms are probably more important in the retail banking world. As highlighted earlier, it is important to engagethe target audience in the most appropriate way.How content is createdTypically, the responsibility for creating and publicising content on official social media platforms lies with the communications/PR department (61%). 48% said it falls to their sales and marketing departments, whereas 30% have a dedicated digital/social mediateam. Senior management involvement is very low, with just 4% of bank CEOs creating content. In addition, 4% and 9% respectivelysaid that their IT department and other individual employees look after social media execution. Another 9% have outsourced thisto their PR agency, and there are a few banks which employ specific research teams for this task. 17%, a relatively high number ofrespondents, do not know who is responsible for creating content – “we haven’t defined it yet”, says one senior communicationsofficer. Another respondent pointed out that responsibility forcontent varies by media platform, suggesting there is a rangeof people involved in the process which may make it moredifficult to control messages and timing – especially acrossmultiple jurisdictions.In this respect, language is a widely discussed issue. A largenumber of journalists globally speak English to a certaindegree which allows them to understand and reproduce apress release or commentary. However content in a locallanguage generates far more coverage than content producedin English for a global audience, and most banks have theirlocal operations create local press material. This does notautomatically transfer into the social media sphere, wherejournalists are just one stakeholder: 40% of banks undertakeall social media activity in English only to reach the widestpossible audience – including media, customers, partners andemployees. However, a significant 35% translate and localiseall content – “every community has its own language”, saidone PR manager. A further 30% translates selected contentinto local languages.
MHP Communications Social Media - Catching up with the Banks Autumn 2011 11ConclusionSocial media remains a controversial topic for communications experts in the banking industry. Whilst the usefulness and growingimportance of digital platforms have been widely acknowledged, banks are now faced with the challenge of how to best executesocial media strategies. This research highlights how thinking and knowledge across the industry globally is more advanced thancommonly assumed, which can only be a good thing. The level of engagement with social media platforms is for individual institutionsto determine based on their needs, priorities and perceived threats. However, all communications professionals in the banking sectormust at a minimum have a fine-tuned understanding of the social media landscape to allow them to identify the correct level ofengagement and deal with negative online activity in the most effective manner. Social media empowers users in a new, exciting andsometimes threatening way, but its presence and growing importance is ignored at your peril.