CorpComms Magazine

While retailers and consumer brands have embraced Twitter and Facebook as ways to engage with their customers, the social media revolution is in danger of passing by the financial services sector.

Just six per cent of commercial banks globally currently use social media to deal with customer queries, according to a recent survey of 150 banks by Ovum. And within the UK only First Direct uses Twitter to communicate with its customers.

This lack of take up for social media can be attributed to a little known act dating back more than 80 years which prevents banks identifying anybody as a customer without their explicit permission.

The 1924 legal case Tournier versus National Provincial and Union Bank of England arose after the bank disclosed to Tournier's employer that one of his unpaid cheques had been drawn on a bookmaker's account: he lost his job.

As a result, Britain's banks have to be extremely circumspect about any response to customers' posts on websites complaining about service levels.

It is no possible, for example, to make any comment which directly refers to the customer's own account - even if the customer has mentioned it.

Hiding behind the law

Despite this restriction, banks are looking at ways to embrace social media to engage with customers within the letter of the law. And some hint that those not conducting customer conversations online are hiding behind the rules which are not really that clear.

Neville Hobson, head of social media Europe for WCG is an enthusiastic advocate for the use of social media for customer engagement.

He is unconvinced that banks face a huge barrier in using the media to deal with customers, while adding: 'There are very clear regulatory issues which don't allow the banks to do certain things including identifying customers.'

Rob Skinner, head of PR (UK) for PayPal says: 'If, for example, we saw a personal complaint from a customer then we might reply that we have seen it and would welcome the opportunity to deal with it offline, thus keeping the matter confidential.

'On the legal side, I'd point out that it is frankly a myth that social media is the Wild West and beyond the law. That has never been the case. The Office of Fair Trading, Financial Services Authority and others will watch for any transgressions.'

First Direct has always been at the forefront of using technology to communicate with customers. Its Talking Point forum is a place for both customers and non-customers to share their views on the bank.

General communications

First Direct makes it clear that it will not deal with individual inquiries about personal accounts, but it hosts lively debates on general subjects such as whether to save or spend. And it does not prevent negative comments. For example, a recent batch of comments were particularly critical of First Direct's savings rates.

Amanda Brown, media relations manager at First Direct, says that what is particularly interesting is that ongoing conversations on Talking Point effectively self-moderate in that if one person posts a negative or incorrect comment, others will join in and correct them.

However, she says that while First Direct does not currently directly engage with customers' complaints, it is working on doing so, possibly using those staff who currently monitor and comment on Talking Point.

But, as she points out, First Direct is in a 'privileged position' in that its customer base tends to be particularly technologically literate and will be comfortable with online conversations.

Nationwide Building Society's head of communications Alan Oliver says it does communicate with customers on social media - but with caution. 'We would never ask someone to provide us with confidential information via a public channel such as Twitter.'

The way it deals with such comments, Oliver says, is to try to send the commentator a direct message and if that is not possible, ask them to message the society. It would then deal with the query away from the public forum.

It is a similar approach at Santander, where head of media relations Andy Smith adds: 'The important point here is that if it is something we can fix, such as a customer service issue, then we do occasionally engage but if possible we try to do so offline.'

Some are less in the loop. A spokesman for Royal Bank of Scotland said, while its group communications arm has been tweeting since August last year, 'at this stage we are not as yet using social media as a customer tool - and therefore have no business capacity to reply to customer questions or comments'. Betony Taylor, media relations manager at HSBC, adds: 'We think social media is just another - though very important - channel through which we communicate with our customers.'

An opportunity to embrace change

However, as long as they are careful not to breach confidentiality, banks should really embrace the chance to use social media to deal with customers. PayPal's Skinner says: 'The really positive thing is that we can deal with customers' problems within minutes. That makes social media a great way of dealing with problems that could otherwise take a long time to sort out.'

And it also offers an opportunity for turning a bad situation into a good one. Hobson adds: 'I asked my bank a question via Twitter about why its Internet banking was so slow. The bank quickly responded to my

post, saying it was looking into the matter: that's a good example of how social media offers a way to engage with customers and respond effectively.'

Recently, National Australia Bank went on Twitter to engage with customers angry about its online system going down. In the UK, National Australia owns three brands, including Yorkshire Bank. Its senior media relations manager Jason Clarke is currently involved in the bank's project on how it deals with customers in all new media, along with the bank's marketing, computing and compliance gurus.

Clarke says the problem is not just about how banks respond to customers, but first identifying the type of conversation that is going on. Someone with a real concern would be dealt with in a similar way to the other banks. But, says Clarke: 'Is it just somebody having a rant? Or is it someone putting out wrong information about us?

'If it's someone just having a rant then you probably just want to let them get it out of their system and not get involved. If they are putting something on a site that's factually wrong, then you want to correct it but how do you do that effectively?'

But Hobson says that if a bank does not react quickly to complaints, it runs the risk of a negative story getting out of hand. 'Anyone is a news maker these days. Journalists tell me they do much of their news gathering through Twitter: they are going to pick up on any interesting ongoing conversations. And that's not going to diminish: social media will play an increasing role in setting the news agenda.'

Straight to the source

Skinner agrees. 'We responded to a journalist's question about PayPal on Twitter last year. Similarly, a personal finance journalist recently asked a question about a mortgage provider's loan to value rates on Twitter and added if the lender was on Twitter it could have answered. The media is now increasingly posing questions on Twitter rather than calling the press office: if you're not following the conversation, you'll miss out.'

Banks all claim that they monitor what is being said about them in these forums, but this can vary from having a whole team - PayPal has a social media manager plus a team in its European operations headquarters in Dublin doing this - to a general watching brief.

HSBC's innovation technician Aden Davies says: 'If any company, not just banks, wants to remain relevant they have to understand how the web has evolved, and continues to evolve, around human interaction. Companies need to add value to these conversations and cannot just wade in and shout about their latest shiny products.'

And that means a whole new mindset for many traditional banks, says Davies. 'Banks need to be human and humble in these spaces and need to be willing to speak openly as much as possible bearing in mind the confidential and highly regulated issues surrounding financial services.'

In the USA, banks are already getting the hang of customer interaction through social media. Citibank's senior vice president Frank Eliason does just that with the bank's customers on Twitter.

Business Week described him as 'the most famous customer service manager in the US' when he was at his previous role at cable company Comcast. There, he and his team chased and responded to online complaints from customers, with their Twitter handle of @comcastcares.

Follow Comcast's lead

He revolutionised Comcast's customer relations. One customer, who went on Twitter to vent her spleen about the size of her bill in 2008, prompting Elaison to type out his typical reply: 'Can I help?', said: 'It's one thing to spit vitriol about a company when they can't hear you... I immediately backed down and softened my tone when I knew I was talking to a real person.'

Eliason's example will be followed more in the UK, says Davies. 'In the future I believe companies will move beyond simply one way communication and we will see named people representing financial services online. I think it will not be long before the High Street banks in the UK take a similar approach to that in the US.

'Online spaces will just become new channels for conversation, such as telephone and secure email: this is good news for companies and customers alike.'

Although we have come a long way from the days of the traditional, Captain Mainwaring-style bank manager, perhaps we will soon see, as Davies suggests, the arrival of a social media banker.

However, even if that happens, it is still likely that necessary confidentiality rules will mean that while general approaches and comments can be made on public forums, individual dealings will have to be dealt with in more private ways. No one would want, or expect, a mortgage application or a review of an investment portfolio to be aired on a social media site. That would be beyond the pale of even the most dedicated Twitterer.

Darlington goes app

Darlington Building Society, which has a heritage dating back more than 150 years, has modernised its image by becoming the first UK building society to launch an iPhone app.

It will allow customers to access information about the society, which operates around County Durham, the Tees Valley and North Yorkshire, and to get the latest information on savings accounts, mortgage and insurance products and services.

Potential borrowers will also be able to use its calculator to work out savings interest, mortgage repayments and just how much the society will lend an individual looking for a home loan. Advice on opening savings accounts or applying for mortgages is also included.

The app also allows users to locate the nearest brand or cash machines. Teesside district manager John Wall said: 'We are determined that our customers are given the ability to obtain information about the Society in a format and at time that suits them. They will be able to use a highly convenient, effective and easy to use tool, which they can access anywhere and at any hour of the day.'

share me: del.icio.us | digg | reddit | Tweet