Pub 1 2012 Issue 2

24 Leading advocate for the banking industry in Kansas. www.cbai.com 40 Community Bankers Association of Illinois C onservative organizations — like banks — are embracing social media in record numbers. Some 84% of the top 35 banks now have a social strategy, according to the 2011 Social Media Banking Sector Survey. While regulations are behind the times, new software allows for e-discovery and real-time monitoring to ensure that FTC, SEC, and other core regulations are met. As a result, social media is a valuable tool for your bank to use when con- necting with customers. The Implications of Social Media for Small Banks Here’s the hard reality you need to understand: nobody knows yet just how profitable it is (or isn’t) to be involved in social media. But profitable or not, you can’t sit out the game while those facts become more clearly established. Your customers use social media. If you want to keep your existing customers and find new ones, you have to go where your customers go. And that means you have to learn how to use social media, too. Some things are clear: • It’s harder to control the message in social media. Keeping things consistent is a problem; so is controlling who has a public voice. Everyone is struggling with this. • When it comes to social media, the goal is always to keep things positive. You want employees to be polite no matter where they are communicating; you want customers to be happy about their experiences with your bank. In short, cour- tesy and service both matter. • You can’t compete with the biggest banks and their massive budgets. You are going to have to work on a smaller scale. Figure out what will benefit your bank that is within your power to do, then do it. • The way a bank uses social media isn’t going to be the same way an individual uses it on a private level. At the same time, maybe it can be a useful service tool. Tweets that show excel- lent responsiveness to customer needs can be an asset. • You can use social media to harness the power of someone else’s brand to your advantage. Barclays decided to sponsor the top football league in England, and was able to attract some customers to sign up on its Facebook account. (It was only a little less than 2% of the customer base, but 2% of a large number is also a large number.) There are smaller ways to do the same thing. Consequences of Ignoring Social Media Sometimes the best way to see the need for something is to examine the consequences if you ignore it. What are the worst things that can happen if you don’t have a social media policy? It turns out that the answer is, “Plenty!” • You can end up with legal problems for yourself and your bank. Those legal troubles may pit you against the U.S. gov- ernment or its agencies, your customers, the general public, or even other banks. • You can lose confidential and proprietary information, which in turn may hurt your competitive advantage. • You can hurt your brand. Think about what happened to Toyota when it became widely known that the company had serious problems with the quality of its cars — and specifical- ly with its mechanical braking systems, as scientists ultimately discovered. Massive recalls between 2009 and 2011 involved approximately 9 million cars worldwide. Obviously, when it comes to cars or anything else, there is no number of accept- able deaths, but it’s safe to say that when 37 alleged deaths cause huge recalls and a corresponding amount of negative publicity, both brand damage and media involvement have been substantial. • You can lose customers and employees. The problem with losing customers is obvious: no customers, no bank. But it is important to realize that in the long term, losing employees is an equally a serious matter. As a banking leader, you understand the costs in- volved when employee turnover is high. Losing any experienced employee costs you money because you’ve also lost that person’s valuable experience. Don’t underestimate it. Small Banks and Social Media Carla Humes, The newsLINK Group