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2. How Banks Can
Harness the Power
of Social Media

3. 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

4. . 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.

5. 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.

6. 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.

7. 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.

8. 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.

9. 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.

10. 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.

11. 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.

12. 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.

13. 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.

14. 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.