The State of Social Media in Banking

An ABA Research Study

Having a presence on social media is no longer a choice for banks—it’s a reality, plain and simple. Because even if your bank isn’t actively tweeting, Facebooking, YouTubing, or otherwise posting on social media, rest assured that consumers are using those channels to talk about you. That’s why many banks have become increasingly active on social—to meet their customers and prospects where they congregate, and to be part of the dialog.

How exactly do the social media rules of engagement translate to a risk-averse sector like banking?

To find out, the American Bankers Association surveyed banks of all sizes—nearly 800 in all—about their social media programs. The resulting report, The State of Social Media in Banking, sheds new light on what’s happening at banks right now—and what the future is likely to bring.

Building social capital.

Despite the sector’s stodgy reputation, it turns out that the most innovative banks are using social channels to help transform bank personas from anonymous institutions into friendly and approachable members of the community. For example:

  • Central National Bank in Waco found YouTube stardom with its satirical video on why banks close for Columbus Day.
  • 1st State Bank in Omaha holds a quarterly contest with a local business customer where they each promote the other’s business on social media.
  • Every week a bobblehead figure of First Bank Financial Centre CEO Mark Mohr pops up somewhere in the world in a “Where’s Mark Wednesday” Facebook promotion. The first person to guess the location wins a $10 gift card.

It’s not necessarily the largest banks seeing the greatest impact from their foray into social media. Jill Castilla, president and CEO of Citizens Bank of Edmond, in Edmond, Oklahoma, gained national exposure for her $250 million community bank by leveraging social channels to strengthen the bank’s ties to the local area. Citizens Bank of Edmond went from having no social media audience to more than 40,000 views on YouTube and 30,000+ followers who engage with the bank through Twitter, Facebook, YouTube, and Instagram. Social media promotions boosted the bank’s monthly community appreciation event, “Heard on Hurd,” far beyond expectations. More than 100,000 people attended in 2015, and the event generated more than $2.4 million in economic activity.

For very little cost, banks can reach a large and fast-growing target audience—mobile, online, and socially connected. And a growing number of users are relying on online sources, including social media, to support their buying or investment decisions.

That begs a lot of questions. How many banks are currently involved? How active are they? What are their objectives? Are they meeting them? And what are they learning along the way?

Here are the top 10 takeaways from the report:

  1. Social media is a powerful way to boost the brand. Even small banks have raised their profiles to thousands of likes and tens of thousands of views with community-minded posts and viral videos.
  2. Social media programs are still maturing. Most banks have been in social media for only a few years, while many are just starting. Of those who are in, a large percentage are not using it very actively yet.
  3. There’s a lot of work to be done in strategy and implementation. Only a small number of banks have established clear plans, goals, governance, and training programs for their use of social media.
  4. Banks are foregoing opportunities. About one-quarter of banks have no plans to use social media for managing complaints, customer service, or recruiting—areas where other banks are seeing notable successes.
  5. Giving employees a voice can be a great benefit. The risks of expanding employee advocacy can be mitigated by providing preapproved content, strong policy, and good training.
  6. Governance concerns can be resolved with management software. About half of banks use software or technology from a third-party provider to monitor or manage social media content or compliance.
  7. Clicks and views are less meaningful than engagement. Awareness and goodwill generated with social media leads to deeper conversations that lead to business wins.
  8. Social media can be the foundation of an advertising program. Most banks use newspaper advertising (87%), in-person events (85%), radio (73%), direct mail (73%) email (71%), and other outbound channels, but for very little investment, a social media presence can create a two-way conversation that draws mainstream media attention and free advertising.
  9. Social media will get more costly. Channels such as Facebook are changing their algorithms in ways that pressure commercial enterprises to pay for views, either by advertising or boosting posts.
  10. Banks can’t afford not to be in social media. Your brand and your market are out there in social media, for better or for worse. You are being talked about. You might as well know what is being said, help shape the conversation, and benefit from it.