Findings from ABA Research
ABA recently conducted a nationwide survey of 780 banks of all sizes to find out how they are managing social media programs. What are the results banks have seen from their efforts so far? What do they wish they could do better? And what are the opportunities and challenges they see on the horizon? The final report, The State of Social Media in Banking, generated a wealth of data—and some recommendations for what banks can do differently.
How are you dealing with regulatory concerns over social media?
Many banks are wrestling with the fact that social media can—by default—be considered advertising, subject to regulations that were written for print, radio, and television. Within a single social media platform, content is displayed differently on a cell phone, tablet, or PC.
How does a bank establish consistency in the way the FDIC and Equal Housing Lender logos are displayed? How can it fit all the required disclaimers in 140 characters? It can’t.
In December 2013, the Federal Financial Institutions Examination Council (FFIEC), released guidance on the applicability of consumer protection and compliance laws, regulations, and policies to activities conducted via social media by banks and other financial institutions.
However, this guidance is intentionally vague due to the ongoing change in social media channels. Compliance officers are being told to use their best judgment. And the resulting ambiguity creates conflict between compliance officers and marketing.
For MVB Bank in Fairmont, West Virginia, the decision to become active on social media wasn’t made until after careful consideration. “It took 15 months to go through the compliance committee, enterprise risk, the board, and the executive team,” said Aly Gregg, who was the bank’s senior vice president of marketing at the time. “We worked through our internal processes, and when the FFIEC came out with their recommendations, we used those to develop our policies and procedures.”
Many banks avoid the regulatory issues by choosing not to talk about products or services. They will post about community engagement, financial education, and contests, making social media more social than business.
Once survey respondent said, “Our compliance officer requires everything be approved before posting—everything, even lenders saying, ‘Come by booth 234 and see us at the ABC Conference…’ We can’t take full advantage of trending topics because sometimes we don’t get approval to post until after the event has passed and is no longer timely or trending. This is why we don’t use our social media for any advertising at all. Compliance makes the easiest things difficult, and we don’t have time to jump through all the hoops that would be required with actually advertising something. Very frustrating.”
Who can post on social media on behalf of the bank?
For most banks (75%), social media strategy and content are managed by the marketing director or vice president. One bank in five assigns this responsibility to someone else, such as a manager in marketing, IT, or compliance. Only 10% of banks turn to an outside marketing firm, in part because of fears that external agencies might not be well versed in the compliance issues.
More than one-third of respondents in the survey (36%) said client-facing employees (such as personal bankers, loan officers, and financial advisors) are not allowed to use social media for business purposes. Another 28% said employees can post, but the rules are unclear. And 26% said employees are encouraged to post—with the bank providing social media training to employees.
There seems to be a greater prohibition on client-facing employees posting content for business purposes on their personal social media accounts. More than half of banks represented in the survey (58%) say no. Another 17% allow employees to publish content but are unclear on how to manage it, while 14% of respondents said their banks encourage employees to post bank-related content on their personal pages, profiles, and feeds, and provide training for it.
At First Bank Financial Centre in Wisconsin, only Joe McCarthy (vice president of marketing) and one designated social media specialist can post as the voice of the bank. McCarthy relies heavily on the branch teams to send photos and content that can be turned into social media posts. Five lenders can post as themselves, but everything goes through the Gremlin Social approval tool. “We do encourage sharing and liking the bank posts,” McCarthy noted. “We’ve got 300 employees and all 300 are sharing the posts, so all their friends are seeing our content as well, and it benefits the organization as a whole.
“The challenge is that we can’t require employees to update their LinkedIn profiles in a certain way. We can’t require them to use a certain profile photo or job description. What we can do is offer our team as a resource to help them craft their updates to be consistent with what other employees are doing.”
The gap in social media training and policy.
Although 90% of survey respondents said their banks have written social media policies and procedures, they gave only fair to middling grades on the quality of the bank’s training on those policies and procedures.
One-quarter of respondents (24%) rated their institution’s training as poor, 33% said average, 33% said good, and only 10% believed employee training on compliant and effective use of social media for business purposes was excellent.
Developing employee advocates and brand ambassadors.
Avidia Bank in Hudson, Massachusetts decided to create brand ambassadors, called the Avidia Smarties, who could represent the bank in person as well as through various social media channels.
“We really saw an opportunity for connecting with our customers and doing it in a way that was different than the other community banks,” said CarrieAnne Cormier, vice president for retail operations and strategy at Avidia. “There is a lot of traditional marketing out there with many banks just posting their CD rates or auto loan rates. But when customers are on social, I don’t think that is what they want to see. They want to see a fun and relatable brand and that can’t always be done by someone sitting in a back office in the marketing department just doing posts.”
The Smarties have grown from a team of four to 12 employees, mostly retail employees selected from Avidia’s various branches. And it’s been instrumental in driving engagement. “When we post a picture of an employee or something that they are doing, we see a huge lift in engagement in social. Not only do people like a post, they are commenting and we see a lot more traffic to our site and other channels.”
“If you clamp down on social media too much, you might find that one person becomes the bottleneck of content distribution for the bank,” said Ryan Bell, chief product officer and chief technology officer for Gremlin Social. “The next phase is team member advocacy—expanding social media out of the marketing department and letting your employees and managers be the face of the company going forward.”
Start with the people who already speak on behalf of the bank in other venues—such as your relationship managers, sales team, loan originators, and financial advisors. These people have experience in representing the bank. Social media is just another tool.
“That’s a big step in control—crossing the line between business accounts and personal accounts of employees,” Bell added. “You have to have a system, process, and guidelines in place for how employees might post about the bank. Very often there’s no policy in place, or there’s a general communication policy for electronic media, but social media has some unique qualities that are different from email.”
Bell advises giving employees good training on the bank’s social media policies, as well as providing preapproved content they can use—perhaps a content library of 30 messages created by the marketing department and approved by the legal team. By giving employees a choice from approved content, a bank can engage a broader pool of employees to be social media advocates, without fear.
Online training in digital, mobile and social media from ABA.