Consumers Have Evolved – Now More Than Ever, Financial Institutions Must Too

Few banks and credit unions today will disagree that consumers, and consumer behavior, have changed with the advent of social media.

Where the divide begins to widen is between institutions that respond to that awareness with prescriptive action vs. those that idle aimlessly — hoping the answer will somehow fall into their laps.

Having received guidance from the FFIEC in December 2013, market participants can no longer hide behind the veil of ignorance regarding establishing their own social media practices.

Notwithstanding the establishment of their internal policies, the single most important move decision-makers in these organizations must make today is identifying a technology partner that can enable their stakeholders to compliantly engage in social media.

The New Paradigm: Consumers in Control

Social media has made the world a much smaller place, creating endless opportunities for consumers and brands to engage in 1:1 dialogue. Unfortunately, being 1:1 isn’t always possible when you’re dealing with thousands of daily conversations.

In order to support bidirectional conversation at scale, institutions need to be equipped with a social infrastructure.

Having the appropriate infrastructure in place — one that is built from a single, native architecture; one that can connect to your legacy systems; and one that can meet for the needs of your entire organization — is paramount to surviving social disruption.

While control may have shifted to consumers, organizations that respond thoughtfully now can — and will — level the playing field.

Are You Compliant?

Many institutions fear that by taking the first step into social media, they will be increasing their risk — quite the contrary.

Regardless of the day of the week, another crisis bubbles up to the top of the headlines.

Whether its rogue posting, account hacks or even just human error, preventative governance and enterprise controls are a must in any environment. This is especially true in regulated industry.

Nowhere to Run

The good news is many leading banks and credit unions aren’t looking to run away from the problem.

Early leaders in leveraging social media like Navy Federal Credit Union and Citi, have proven that the rewards outweigh the risks in leveraging social.

Brands can survive and thrive in this brave new world, but to do so, they’ll require the awareness, vision and desire to execute in this challenging new environment.

The first step in graduating to that level is by ensuring the needs of their entire enterprise are accounted for by their social technology partner.

If not, they will stampeded by the herd of consumers seeking to engage with their brand 1:1 in social media.

 

Tim O'Connor, Global Account Manager, Sprinklr

Tim O’Connor is a Global Account Manager at Sprinklr.  In his role, he builds partnerships with many of the leading global financial services organizations helping to enable their success in social media.  Prior to joining Sprinklr in 2012, Tim spent the previous 11 years as a sales executive in the financial services industry with his tenure including Merrill Lynch and two boutique investment banks in Manhattan.

What All Financial Institutions Should Do on Social: Q&A with Sprinklr CEO

Reports claim that financial institutions are struggling on social. But why? Many brands in other industries have found creative ways to use social media to solve customer service woes, create deeper touch-points with users and keep members apprised of important information. To gain more insight on ways banks and credit unions can ramp up their social cred, we recently spoke with Ragy Thomas, founder and CEO of Sprinklr, a social relationship infrastructure company. Ragy shares his insight with us on what FIs are doing wrong, how they fix some of their biggest problems and banks and credit unions to look up to.

Ragy Thomas Sprinklr CEO

Banking.com: According to CEB TowerGroup, 65% of banks have plans to replace or adopt social networking management technology. Why do you think there is such a need to change services or adopt new ones?

Previous generations of social management technologies and solutions were designed to achieve single-issue “point” solutions, fulfilling one or two social needs such as social publishing or social analytics.

Unfortunately, their inability to work together, or solve for the many other needs mature social management requires (e.g., social engagement, compliance, workflow, listening, governance, etc.) now renders point solutions insufficient.

As in the case of other cross-department infrastructures such as CRM or knowledge management, brands need a true social infrastructure. Financial institutions are realizing they need a single, interconnected infrastructure to effectively manage conversations, campaigns, content and community at scale. They need to be able to collaborate as a team to create a unified customer experience across all channels.

What do you think the biggest challenges are for financial institutions on social?

Compliance, security and privacy are still big challenges for financial institutions when it comes to social.  To go into more depth though, people now expect every brand to know who they are, regardless of which “division” within the brand they connect with. This paradigm is particularly stressful for financial institutions, perhaps more than any other industry, who typically suffer from “business inertia” — internal departmental, divisional, and locational business groups that typically don’t work together smoothly.

Inter-departmental friction flies in the face of arguably the sharpest disruption social has created — the expectation among consumers for a “unified experience.” Regardless of whether they are talking to a teller at the branch, on the phone with customer service, or tweeting out their frustrations, people want to be recognized and cared for as individuals in a personal manner. This comes into play especially when it comes to the extreme sensitivities associated with financial matters. When internal systems are not aligned and don’t “talk” to each other, and internal divisions are not encouraged or rewarded for collaboration to meet customer expectations, customer satisfaction is likely a difficult goal to achieve.

To truly support the “omni channel customer and journey,” banks have to collaborate across teams, departments and divisions. They need to create new processes, and define “ownership” across the breadth and depth of a person’s entire brand journey. This is unfamiliar territory for most banks, with lots of land mines along the way. Given that the volume and pace of social conversations is only likely to increase in the future, the pressure to quickly put together a solution is acute.

Social can be a powerful lever for nurturing unified relationships and generating long-term, meaningful engagement. Every meaningful social conversation can be nurtured into a real relationship that can, over time, become a direct revenue opportunity, positive word-of-mouth, or direct referral. Used effectively, social can become a cost-effective lead generation and activation channel for banks. To start, banks need to build a contextually unified profile for every prospect and customer, the foundation of which is a comprehensive conversation history — combining interactions from Facebook, Twitter, LinkedIn, Youtube, etc. With these individual histories, banks will know exactly what has been discussed with each prospect or customer, and will have clear indicators for how to nurture relationships through social interaction.

What would you suggest as the best tactic for financial institutions when responding to negative banking experiences online?

Financial institutions need to be able to admit when something has been handled poorly and rectify it immediately. Additionally, banks must be empathetic and be willing to listen to and trust their customers. As an industry that previously championed process-based decision making, this is a radical change.

If financial institutions were to change one thing today about how they use social networks, what would it be?

Create a cross business unit team that can be an advocate for optimizing client experience across channels, teams, departments, divisions and locations. This can be headed by the chief client experience (social) officer who can champion the transformation to being a social business.

Is there an example or a few examples of banks and credit unions that are really nailing it on social?

Navy Federal Credit Union provides a great example of a financial services company that has employed a mature, holistic approach to social engagement. They intently listen to their social communities, and know which customers spend more and more time on social. As a result, NFCU today provides 24/7 customer service and have an SLA response time of less than one hour. Since 60% of their members log on to social through mobile, they also now make sure new apps work seamlessly on any mobile device.

Another example is Citibank, which serves more than 100 million customers in 40 countries. With more than a million of those customers following their social channels, there were a lot of conversations happening around the brand and it was hard to keep track of them. Citi adopted a social relationship infrastructure approach to help them provide better customer service through social. As a result, the banking giant was able to save roughly 20% of their community manager’s time that was previously devoted to customer service issues. They are now able to optimize resources to social engagement, where they are committed to creating meaningful conversations and escalating customer issues to the right people.

What these two brands have in common is that they use social to enhance the customer experience and make their lives easier. That’s what all brands should aim to do through social.