Social Media Series: Authentic – true to one’s personality, spirit, character…

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Last Monday, I wrote about how social networks are changing a bank’s customers’ experience. Well, its up to the leadership within an institution to incorporate your online interaction into your way of doing business, and today’s column looks at how one company is doing just that.

If pressed to offer just one word that that sums up social media today, it is the title of today’s post.  That is, successful financial services companies do not automate their responses, yet they do integrate links/videos/pictures and they understand that they simply influence (not control) their bank’s message.  In short, they are true to their culture, which I assume aspires to provide exceptional customer service.

In our “world-is-flat” day and age, the Internet offers around-the-clock service and availability to customers as well as an engaging platform for prospective ones. Being “always on” allows a company, bank or credit union to continuously share brand messages and gain macro-level insights into their customers’ online behavior. Regardless of your asset size, understanding the strengths and weaknesses of your competitors is a critical component for improving your own institution’s business results and profitability.

social-media-ally.jpgWhether you’re a bank with relatively small deposits, an institution of a healthy asset size or one of these banks’ competitors, social media provides smart, progressive types with a tremendous amount of research on user behavior and attitudes.  Take, for example, Ally Bank and USAA.  The former being the old GMAC; the latter, serving the military and their families since 1922.  Both provide insurance, online banking and mortgage operations to its customers.  But notice anything interesting about the twos interaction with their respective followers on a social media site like Twitter?

While I’m not suggestion the number of tweets correlates to the number of followers, a quick survey of the comments and conversation leads me to believe that USAA gets the whole concept of community building.  In fact, I reached out to both Ally and USAA through Twitter where my online inquiry to Ally was met with silence, and the one sent to USAA received a response within two hours.  Community building is something that all banks should be doing, as so much of what we do work-wise and personally requires some form of relationship with a bank.  And it’s not just on Twitter that USAA is making itself available. Take a look at its Facebook page.  As of December 22nd, 127,696 people “Liked This.” Impressive.

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I use these two examples not to castigate Ally or promote USAA; rather, to show how one company has realized that, despite our turbulent financial environment, investing in this medium allows them to really engage with their customers, build trust and act in an open and honest manner.  Living in Washington, the word that bankers and financiers can’t escape is transparency.  So if we opened today’s post with the word authentic, let me close with transparent.  If you can marry the two, you’ll be well ahead of your competition.

Social Media Series: Is your bank using?

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In my last column, I wrote about social networking platforms presenting banks with powerful new ways to connect with consumers of all generations. This week, we look at the benefits of social media and clear up some misconceptions about the practice.

At a time when a number of institutions — both big and small — consider implementing new technology strategies to lower costs for retaining clients, improving operating efficiencies and differentiating brands and customer offerings, surprisingly few banks leverage social media as a communications channel. Considering the U.S. economy struggles to emerge from its bleakest conditions in 80+ years, one would think that most would readily embrace an opportunity to engage with anyone visiting them “digitally.”
 
diving-board.jpgIn today’s massively connected world, tools and technologies continue to present new ways to share/consume day-to-day information. According to a white paper put out by comScore, an Internet marketing research firm, this has significant impact on the industry. While its generally accepted that online banking continues to grow in importance for the average American, did you know that “in any given quarter, nearly 60% of the total U.S. Internet population visits at least one of the top 20 financial institution sites.”

Those are some big numbers that any bank — community, mid-size or large — should take note of.  Now, I’m not suggesting you go out and start using social media to promote your latest credit card offer. A word of caution that banks using social media channels to sell products or hype their services will quickly fall behind those using such tools to boost their customer service quality. Resolving issues quickly; now that’s something people want that you can give them. 

This lines up with another point from last week: the fact that you no longer wholly control your message. This idea caught a few by surprise, so I reached out to Susan Jacobsen, the president of LUV2XLPR, for her thoughts. As her work bridges public relations and new media, we talked about ways her clients are navigating a rapidly changing social media landscape. While a daunting task to some, Susan suggested that executives look at social media as a means for “engaging with customers while balancing the legal, compliance and risk liabilities.” She continued that “once they make the decision to engage online, whether through Twitter, commenting on blogs or via LinkedIn, it has to be a commitment to continue the dialog and not disappear if they don’t like what they’re reading. Social networks will not go away and neither should they.”

Sage advice to anyone thinking about using these tools to expand their customer experience in 2011 and beyond.

Using Technology to Manage Lending Practices

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The most recent issue of Bank Director includes these words of wisdom: “oftentimes a bank’s most important lending decision is the loan it doesn’t make.”  That line struck a chord — and sent me back down the path of Big Data and the value of business intelligence for today’s column.

Now, in my last post, I cited a list a handful of tech firms in the “Big Data” space that support the financial industry. Inadvertently, I left out SAS — one of the leaders in business analytics software and services.  An oversight on my part, as their support of banks, credit unions, lenders and capital markets firms is considerable.  While some technologists consider them expensive, the tools and services they provide to solve risk management issues, develop stronger customer relationships and create clear competitive differentiation ties into that post’s central theme of growing organically and today’s lending practices.

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I mention SAS’s support of the industry as a means to an end: their case studies show how a number of their clients — mid- to large financial institutions, both foreign and domestic — invested time, money and resources to integrate, organize and manage an explosion of customer data.  All of which returns us to the value of understanding your customer’s data in the context of lending.

With bankers across the country tightening their lending practices due to credit delinquencies, new legislation and tighter regulatory controls, providing new and/or easier ways for non-technical users to explore, visualize and interpret data has to sound pretty good, right?

Stop me if you’ve heard this one…

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…an IT salesman walks into a bank.

Now, if such a thought sends you running for the nearest exit, you might pause and consider that a number of institutions — both big and small — are implementing new technology strategies to lower costs for retaining clients, improve operating efficiencies and differentiate their brands and customer offerings.

That said, I know for many executives, talking tech can be a foreign, four-letter, budget-busting concept. So let me help you based on personal experience and professional interests.

I’ll admit that my days of devouring espn.com for sports updates on my Boston teams has given way to similar searches for insights on the financial industry. And so as we continue to invest in Bank Director’s future, I’m taking a long, hard look at the technology companies that support the community. Splitting time between California and the east coast last week, I found myself reading a number of white papers, reports and blogs about the risks — and potential rewards — of new technologies in our community: here are two that I thought bank executives shouldn’t overlook. One comes from our friends at American Banker (FinTech100); the other, from global IT consultant Accenture (vis-a-vis their financial services publication).

As someone who has evaluated a number of web-based tools designed to better predict behavior, I’m bullish on the adoption of new technologies to maximize a customer’s experience. If you’re interested to see who’s who in the technology industry as it applies to financial institutions, the FinTech 100 list is a good place to start. So too will a new offering coming from Bank Director later this month — BankBusiness. Why the drive to identify potential vendors? Simple: Accenture opines that the financial crisis and subsequent economic reforms have made profitable but risky sub-prime segments less attractive to many institutions, [so] the future of banks rests increasingly on sustainable long-term relationships with high-quality customers. Intuitive? Perhaps. But the consultancy identified the following emerging customer behaviors that should make all of us sit up and take notice:

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According to the firm’s research, your customers “have gone through several major changes in recent years, from diminished loyalty to—and trust in financial institutions—to heightened expectations for seamless multichannel customer service and simple, transparent products… With loyalty to banks at all-time lows, the good news is that the time is right for those with superior customer experience and cost-to-serve management to win new business.”

So what emerging technologies might catapult your bank’s business? In isolation, I’d be hard pressed to answer. As part of an institution’s systematic, data-driven approach? The foundation for future posts…

What the Future Holds for Banks & Bank Director

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future.jpgIn 1991 when I helped start Bank Director, the experts predicted technology and regulation would winnow the number of banks down to 2,000 over the next twenty years. The thought was that technology would ultimately make it impossible for the smaller banks to compete without economies of scale to justify the expense of implementing new technology.

The experts who predict our futures are often wrong. The new technologies turned out to be an asset to all banks and in fact, leveled the playing field for the institutions that could adapt technology solutions to their unique customer needs. In addition, they forgot that smart bankers go out and start new banks when theirs are bought, and that customers tend to support the financial institutions within their communities.

This fall, our parent company, Board Member Inc. sold our sister publication Corporate Board Member magazine to the New York Stock Exchange. However, Bank Director wasn’t sold because our owner saw a great future for the brand given our unique position in the marketplace and the many opportunities we foresee as the banking business rebuilds itself once again.

Twenty years later I am more excited than ever to be part of a growing enterprise that supports the bankers who lead every kind of institution from the largest international banks to the main street community banks. I fear to predict anything that might happen to the banking industry in the next twenty years, but in the next few I think we can speculate that:

  • approximately 200-300 more banks will fail;
  • many more will merge as the cost of compliance rises;
  • and international banks may give our largest institutions new competition.

No one knows for sure about the future, but I can say with certainty that Bank Director will be there in the middle of it all.

 

An adoption rate of 66%+?

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mobile.jpgEarlier this week, our editor forwarded a survey recently released by Intuit Financial Services.  On the heels of our Bank Board Symposium (where retail banking-focused Q+A dominated our two-day Dallas event), some interesting analysis around the consumption habits of people utilizing online banking tools through their financial institutions.  While the percentage of online users stands at 34% today, “approximately one in five banking customers currently use mobile banking solutions to manage their finances.”

Now, I could simply laud USAA’s mobile banking app — or send you to Lincoln Financial’s dynamic and highly informative/addicting “future self” site.  Doing so will paint a broad picture of how innovative firms are winning business while retaining happy customers by marrying smart IT expenditures with savvy marketing plays.  No, I prefer to send a bigger nod to the many men and women working hard to grow AND avoid another financial crisis by incorporating new methods to increase deposits, better qualify loans and make more data-driven investments.

Having played in the high tech space for the past 5+ years, I’m of the opinion that the biggest advances in the next 24 months will come in the mobile banking space.  Think payments and remote deposits. Spurred on by our love affair with iPhones and Blackberries, mobile banking already is growing at a faster rate than online banking did during the 90s and early parts of 2000s.  So in the interest of sharing some of our company’s findings, let me juxtapose the top ten technologies that bank executives are interested in with the findings Intuits reports:

  • Mobile Banking
  • Mobile Payment
  • Peer-to-Peer Payments
  • Mobile Remote Banking
  • Social Media
  • Personal Financial Management
  • Reward Checking
  • Small Business Banking
  • Anti-Fraud + Security

Quite a few market forces — e.g. demographics, fast-changing customer demand, and a need to differentiate — are propelling advances in these technologies.  However, with the wealth of technology options and advancements being delivered by firms like Intuit, SAS, Fiserv, etc. promises better days ahead for both the consumer and financial institutions.