Odysseas Papadimitriou is CEO of the personal finance social network, WalletHub and the credit card comparison website, CardHub. Prior to entering the world of entrepreneurship, Papadimitriou worked as a senior director at Capital One and oversaw the company’s credit card marketing program.
It took the Securities and Exchange Commission until April 2, 2013, to give publicly-traded companies the go ahead to disseminate official information to investors via social media. Think about that for one second, and keep in mind that the decision actually came 19 months after Wall Street was #Occupied.
That notion seems more and more quaint by the day, as banks navigate a minefield of irate hashtags like #TargetBreach, #BankTransferDay and #AskJPM, while social media continues to seep into nearly every corner of everyday life — from the Super Bowl to the State of the Union.
Not only were financial regulators late to the party, they are also living in the past when it comes to the burdensome social media restrictions they impose. By now, you know the rules. From employee training requirements to the procedures for compliance and oversight, these mandates must serve as the principles for the social media plan of any company operating in the financial services sector.
The challenge for financial institutions is figuring out a way to operate within the current regulatory framework, while also transforming their social media operations into a weapon for efficient customer service, brand management and crisis mitigation (rather than a ticking time bomb of liability). Just because you have one hand tied behind your back doesn’t mean you can’t do some damage, right?
Here are six tips to ensure that your company’s social media strategy packs a major punch.
Establish Goals, Identity & Voice
Your first objective is to establish a list of objectives that you wish to accomplish via social media. Otherwise, you’re flying blind.
Do you, for example, envision using social media more as a customer service mechanism, as a means of building brand awareness or as a way to drive sales through special offers?
Your company’s market position and stage of development will likely dictate your approach, but it is very important that your whole team embraces the purpose of your social efforts. That will promote a consistent voice as well as consumer clarity in terms of what your institution is all about. Why, for instance, does JP Morgan think it should be in the business of giving career advice? That’s an instance of an out-of-touch social media team muddying the brand waters and inadvertently fueling consumer criticism.
A clearly-defined social media identity will also serve as your roadmap to creating an efficient organizational structure.
Re-think Your Organizational Structure
The SEC has made clear its wishes concerning social media at the very top of a company’s leadership. This might feel like a burden but, in reality, it’s something you should’ve been doing already. The financial services industry is under a unique microscope when it comes to both regulatory scrutiny and public perception.
It is for that very reason that you want those at the top of your organization to be the ones setting the tone for your company’s social media program. It’s also why you want legal to be involved every step of the way — there are simply too many icebergs to dodge.
But the financial services industry is also unique in terms of the complexity of its subject matter, the accessibility of its products and the stakes that are in play. Consumers will never cease asking critical, nuanced questions about their finances and financial products, and trying to teach your entire customer service department to answer every type of question that might come their way is a fool’s errand.
There is simply too much ground to cover and no way to effectively automate the process. Just ask Bank of America.
That is why you should micro-segment your social media teams, even more so than your general customer service department. Grouping small teams around specific issues related to specific products will enable you to increase the efficiency and effectiveness of your public communications.
Know Why People Don’t Like You (But Don’t Pander)
A lot of people dislike your company, often simply because it is a financial institution. The bias is most evident when it comes to international goliaths, especially after the Great Recession. But the sentiment applies across the industry.
It’s your job to be aware of how you are perceived not just by your customers, but by your entire target market (including what influences them). This will enable you to avoid head-in-the-clouds gaffes like deciding to run an #AskJPM campaign. It will also help you acquire one of the most precious commodities in the financial services industry: trust.
People are tired of marketing rhetoric that is short on substance. Social media should ultimately be a means of showcasing how your corporation’s underlying values align with those of the consumer.
Financial Services are Emergency Services
Banks, insurance agencies, credit card companies and lenders are not ordinary companies offering ordinary services. They control our financial lives. They are, as a result, more important.
That means every complaint levied by a customer should be viewed as an immediate priority. The longer money-related questions go unanswered, the more likely people are to complain. You obviously don’t want a list of grievances piling up, as that will attract wrong type of attention.
So, put a short clock on your social media responses and avoid allowing mountains to turn into molehills. Having small subject-segmented teams will help in this regard, as will extensive contingency planning.
Hope for the Best, But Plan for Everything
You are in a time-is-money industry. Much like how newspapers have archives of already-written obituaries for people who have yet to perish, you need to be ready for any scenario that you might encounter — from executive scandals to class-action lawsuits to data breaches.
You don’t want to get caught by surprise. The pressure to react quickly is already intense, and when you add the need to think compliantly during times of crisis to the mix, what you have is a recipe for costly mistakes. Preparation, on the other hand, breeds confidence and forces you to consider situations that might never otherwise occur to you.
Having contingency plans in place will also enable you to run drills where managers simulate real-life scenarios that their teams must react to and handle when they are least expecting it. Practice makes perfect.
Lobby for Change
Many people see social media as a fad, which is a mistake. Social media is not going anywhere anytime soon.
While efficiently operating within the current regulatory framework is essential in the short term, the savviest companies always have an eye to the distant future. Consumers won’t give financial service companies the benefit of the doubt because they are facing more regulations. In fact, most people have no idea that is the case.
At the end of the day, something has to change. The current system lets you find thousands of reviews about your cell phone, yet financial advisors and insurance agents can’t ask people to endorse their skills on LinkedIn or review their services. That is why we should all lobby for change.