By Doug WilberBy now, most financial institutions understand that social media is a powerful channel for reaching audiences directly and building trust with consumers. The fear of losing control and damaging their reputation, however, often limits banks’ confidence in their ability to market socially.
Such fear in the face of social marketing isn’t irrational. Banking is a highly regulated industry, especially when it comes to electronic communications such as social media. In fact, FINRA pinpointed 44 cases of electronic communications misuse in 2017 and doled out $8.3 million in fines. Using social media means a higher risk of noncompliance and incurring harsh fines and penalties.
Financial institutions must also be mindful of the risks of using technology in general. Keeping servers safe from phishing attacks and other cyber threats is a daily battle. Furthermore, financial marketers must be careful with the tone and language they use, to accurately portray their brand’s voice and to avoid offending or alienating any readers. The risks are real, but trepidation about digital compliance and etiquette shouldn’t keep banks on the sidelines. Social media can present limitless moments for connection and engagement with a brand.
The five most common social media mistakes that hurt financial institutions
Banks face several risks when interacting on social media, but which are most important? Where should institutions be spending their energy? A great place to start is by looking at the biggest social media mistakes banks have made and learning how to avoid them.
- Not having a social media policy
Writing and implementing a social media policy is the first thing banks should do when embarking on a social media marketing strategy. A clear and documented social media policy will anchor the institution’s social activities and keep them in line with both the brand’s voice and compliance rules.
In fact, having a social media policy isn’t just important—it’s required. The FFIEC dictates that banks have a policy that defines procedures for posting and responding to all social activity. The policy must also be assessed and updated regularly.
A clearly defined procedure for posting will ensure that no post goes live without being reviewed by the proper authorities first. It will also keep all employees who are posting on behalf of the bank in line with the same tone and standards across the board. This will lessen the chances of any employee going rogue and posting carelessly, which could raise compliance concerns or contradict the company’s message.
Once you have a social media policy that’s in line with both your brand’s voice and FFIEC guidelines, ensure that this policy is easily accessible to all your departments and employees. Hold trainings to discuss the policy and address any questions your team may have. Then, be sure to regularly revise this policy and account for any changes to compliance regulations, internal staffing or approval structures and the social media platforms you use.
- Not keeping a thorough archive
Part of the fear banks have about social media stems from the channels’ complexity and the difficulty of tracking and documenting posts and interactions. But if your institution is ever audited, you’ll need to be ready to hand over full archives of all direct posts, responses to comments, direct messages and more. That’s why investing in an auto-archiving tool as early as possible is a wise move.
As use of social media by institutions increases, so too does the burden of regulatory compliance. And no matter how your company acts online, if you can’t prove or disprove your actions with thorough records, you could risk being burned by regulatory bodies. In fact, FINRA regulations now require that firms keep a full record of their social media communications to show that they’re being compliant.
- Operating as a faceless brand rather than as a collection of humans
Historically, bankers have connected with customers in person when conducting financial business at retail branches. Between 2017 and 2022, however, retail bank visits are expected to drop by 36 percent. Bank employees need to find a new way to maintain the personal touch.
Social media can help you provide real human connection in an increasingly digital world. It has the potential to build a sense of trust and empathy with customers. So if you can use social in a human way, it can deepen your bonds with the individuals who make up your audience.
Research shows that 76 percent of consumers feel more trusting of content shared by a personal account than content shown to them by a brand. Brands that have employees share content related to the brand on their own social pages can see 561 percent more reach than when that information is shared only on the brand’s page. That’s why employees are your top resource for social selling: They can provide authentic personas through which to grow your voice.
- Not engaging with the community
Social media shouldn’t be used as a one-way street or simply a mouthpiece through which brands can spew updates. It works best when banks use it to engage their followers—by joining conversations, answering questions, hearing concerns and actively responding—and by celebrating their successes.
Engaging in an active way on social helps bank brands become more familiar to consumers because it’s the way people interact with one another on an everyday basis. This kind of word-of-mouth marketing is still the most effective method of extending your reach, with 84 percent of people trusting referrals from those already in their network.
- Skipping social altogether
The biggest mistake banks can make with social media is not using it at all. Despite the various risks associated with social media, embracing it is always a better choice, especially considering that banking customers are increasingly online. In fact, 70 percent of Americans reported using online and mobile channels to access their bank accounts more often than any other channel, so it’s clear that digital is already dominating the banking sphere.
Your customers are all online, and if you’re not meeting them there, you’re missing out on an important opportunity to get your audience’s attention and form connections. It’s a mistake to let compliance scare you out of getting closer to customers.
Doug Wilber is the CEO of Gremlin Social, an integrated solution that combines social media marketing with ABA-endorsed compliance tools to make it easy for financial services companies to master the social media landscape and engage customers using social networks. Gremlin Social helps ensure safe use of social media communication while maximizing social marketing campaigns, guiding strategies, and monitoring returns on investment. Doug has worked in the fintech space for more than a decade and has experience working with Discover Financial Services, PYMNTS.com, and Assembly Payments, among others. He’s also advised a number of fintech-focused startups in the Greater St. Louis area.