As financial institutions turn to social media to communicate with and win new customers, what issues are facing them?

1. Managing
social media
engagement
for financial
organisations
Social media engagement can give financial organisations
the ‘wow factor’. This white paper explains how to manage
social media, drive engagement and improve marketing
communication, with some suggestions for the
tools to help you do it.
Authored by Tamara Littleton, CEO, eModeration April 2013
www.emoderation.com

2. Managing social media engagement for financial organisations
Table of Contents
A guide to managing social media engagement for financial organisations.................................. 3
Being social in a regulated world......................................................................................................... 4
Who wants to ‘engage’ with their bank? Banks are boring, right?................................................... 6
The opportunities for social media for financial services companies............................................. 7
Why social media matters.................................................................................................................... 9
Setting the rules of engagement........................................................................................................ 10
Managing the community effectively................................................................................................ 11
Crisis and risk management over social media............................................................................... 12
Finance just got social........................................................................................................................ 12
Reading recommendations................................................................................................................ 13
About eModeration............................................................................................................................. 13
2

3. A guide to managing social media engagement for financial
organisations
Back in 2010, Thefinancialbrand.com published Why Social Media Is a Waste of Time for Most
Banks Credit Unions, arguing that social media was useless for the financial sector. Among the
arguments were: banks are boring; no-one wants to interact with them; people don’t have time for
banks; banks can’t communicate internally; it’s too risky; without a strategy there can be no clear
measurements; and finally – it ain’t easy and it ain’t free.
While we wouldn’t argue with the latter two points, the others are almost unrecognisable in today’s
social media environment. The world of financial services, slow initially to embrace the transparency
of social media – for all the reasons outlined in the article above - is opening up: it even has its own
social media summit (the Social Media Conference for Financial Services).
As more of us turn to social media (particularly Twitter) to resolve customer service issues, banks
have to respond over the channels that their customers are using. In 2013, we may see more of our
bank in our Facebook feed than we do in real life.
This guide will look at what the opportunities within social media are for banks, what some of the
big names are doing to engage their customers, and some practical advice on managing a customer
community if you’re a financial organisation.
Of course, working within a complex regulatory framework has its limitations, and all banks using
social media will have their own detailed legal advice on how and when to engage with customers on
public, social channels. This guide is certainly not designed to replace that, but rather focuses on the
practical issues of managing online customer engagement in the financial services sector.
We hope you find it interesting, and, as ever, welcome feedback on our blog, via our website, or on
Twitter.
Managing social media engagement for financial organisations
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4. Being social in a regulated world
We must emphasise that this guide does not give legal advice – we’re a social media management
agency, not a law firm. It is worth looking briefly at how banks can be social – with all the implications
of openness and dialogue that carries – and yet operate within the confines of such a heavily
regulated environment.
The UK regulatory landscape
On 1 April 2013, as a result of the Financial Services Bill, the Financial Service Authority (FSA)
was replaced by a ‘strengthened regulatory architecture’ formed of two separate organisations.
The Prudential Regulatory Authority (PRA) now regulates banks, building societies, credit unions,
insurers and major investment firms, ensuring that these institutions operate safely, while the
Financial Conduct Authority (FCA) focuses on how financial organisations treat consumers. The FCA’s
approach to regulation is expected to be more pre-emptive than that of the FSA.
It’s early days for the new authority, but broadly, the rules for the communication of financial
promotion material online are subject to the same rules as offline. The FCA states:
“The test for whether the contents of a particular website may or may not
involve a financial promotion is no different to any other medium. If a website
or part of a website, operated or maintained in the course of business, invites
or induces a person to engage in investment activity, it will be a financial
promotion. The FCA takes the view that the person who caused the website to
be created will be a communicator.”
The same rules of ‘clear, fair and not misleading’ apply under the FCA as they did under the old FSA.
So, for example, if a UK bank wanted to use Twitter to promote a new financial product or service,
it would have to include enough information to meet the standards of ‘clear, fair and not misleading’
communications, as well as meeting the terms of the FCA’s promotions.
Full information can be found from the FCA at fshandbook.info.
Managing social media engagement for financial organisations
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5. US regulation
In May 2011 in the US, Morgan Stanley’s financial advisors got the go-ahead to market themselves
on Twitter and LinkedIn – something that hadn’t been done before because of tight SEC regulations.
As in the UK, usual rules apply – they are still required to keep records of communication (done in
Morgan Stanley’s case via a software application) and all communication is pre-approved.
US financial firms have to abide by regulations set down by the Securities and Exchange
Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). Any content published on
social channels must be pre-approved and archived and social media presences must be monitored.
More importantly, US investment firms have to ensure that recommendations are tailored to the
individual. Within the context of social media, great care has to be taken around what might be a
“recommendation”. Something as innocuous as suggesting a Facebook page to a fan can be seen
as a recommendation in this situation.
The Federal Financial Institutions Examination Council (FFIEC) proposed specific social media
guidance for federally supervised banks in January 2013. The guidance re-affirms that the same
standards applied in traditional forms of communication should be adhered to on social media
platforms. It also makes clear that financial organisations must create specific compliance programs
to manage the risks associated with social media.
The FFIEC guidelines emphasise that employee training, social media policies and procedures
and a clear governance structure should all be in place if social media communication is to remain
compliant.
In April 2013, the SEC issued further social media guidance, permitting companies to post earnings
and investment updates on Twitter and Facebook, as long as investors are told where to look in
advance of the postings.
So far, regulators on both sides of the pond have taken the stance that social media is another
communication channel, rather than a new way of communicating. But can financial organisations
create engaging social media presences under the current regulatory guidelines?
Managing social media engagement for financial organisations
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6. Who wants to ‘engage’ with their bank? Banks are boring, right?
Young audiences are choosing to talk to brands over social channels,
often preferring it to the more traditional means of communication
that their parents might favour. Recent research by Sitel, reported on
Econsultancy, shows that 15 per cent of 16-24 year-olds choose to
interact with customer service on Twitter, Facebook, blogs and forums.
Another study has shown that some UK consumers prefer using email,
as more detail can be conveyed. In these cases, social media appears
to be used as a last resort - a way to get an organisation’s attention
when they’ve had no joy using conventional channels. It’s hard to tell
what percentage of customer complaints come via social media, but it is
certainly on the rise. People are starting to get creative, with one angry
customer making short films, “Bank of America Wants You to Die”
and setting up social media presences to promote them.
It’s easy to see why customers do this. Research by Virgin Media
Business (December 2012) found that 63 per cent of banks responded
to customer complaints and questions within an hour. NatWest took an
average of four minutes, 10 minutes faster than the second quickest,
HSBC. (However, the research didn’t cover the volume of complaints
responded to.)
More consumers and businesses now bank online. Forty-seven per
cent of Canadians prefer to bank online, and 45 per cent of North
Americans accessed online banking during April 2012 alone. A 2013
study by MyVoucherCodes revealed that 61 per cent of UK account
holders use internet banking, with 36 per cent using a banking app on their mobiles. Twenty per
cent had not set foot inside their bank for two years.
In the US, Citi is using Twitter for customer service, with its dedicated ‘askciti’ Twitter feed answering
questions from US-based customers (although it has a very clear disclaimer on its Twitter page). It
might be an interesting debate to see how effective this disclaimer would be legally.
But there are compliance headaches with financial customer service and social media. Aden Davies,
innovation technician at HSBC, is quoted on silicon.com as saying that compliance law from 1924
means that banks can’t publicly identify someone who has an account with them, which potentially
causes a barrier to using Twitter for customer service:
“ We’re not allowed to publicly disclose that you have a relationship with us…
It’s very, very difficult the kind of conversations that we can have publicly.”
Managing social media engagement for financial organisations
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7. Despite this, HSBC (an eModeration client) is very active on social media. Its 2011 student bursary
Facebook competition invited students to submit a video of how they planned to make their mark
on the world, using a combination of user votes and a judging
panel to select eight winners to receive a £15,000 Student
bursary. The campaign attracted a reported 40,000 votes.
The bank ran the competition again in 2012. Also launching
the MyMoney competition (hosted on Facebook and YouTube),
which asked 15-17 year olds to make a 90-second video
explaining how they would “make their mark on the world of
music”. The three winners received a music experience worth
up to £10,000.
The student bursary and MyMoney contests are great examples of the potential for banks to
use social media to attract and engage young audiences. They both give something back to the
community, and stay within strict financial guidelines.
The opportunities for social media for financial services companies
Compliance issues notwithstanding, there are clear opportunities
for financial services companies, as with other consumer-facing
businesses, to benefit from social media involvement. Examples
include:
Customer service. A good example of this is the US-based
@askciti Twitter account, cited previously. Wells Fargo also
uses Twitter to respond to customers, and to track customer
interactions with the company. In the UK, Metro Bank uses
its Twitter account @Metro_Bank to engage customers, and
respond to customer service queries.
Research and development. Social media enables very quick insight from the exact target
audience. UK-based First Direct uses its First Direct Lab to develop and road test new products
within the First Direct customer community, to quote from the First Direct Lab website:
“The First Direct Lab is all about getting you involved. It’s a place where you
can view new ideas and test-drive brand new first direct innovations before we
release them, so you can tell us exactly what you think and have your say right
from the start. After all, who better to test new ideas than the people they’re
aimed at... you?”
Insight. Social media means that for the first time, companies can listen in to what their customers
are saying about them, and respond appropriately. If a product or service isn’t working for your
customers, social media is a useful way to find out what the problem is, and put it right.
Managing social media engagement for financial organisations
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8. Recruitment. JP Morgan’s Facebook community is designed to
give potential employees a look behind the scenes - a great use
of social media to show the human side of the bank.
Sharing information, for example about corporate social
responsibility (CSR) programmes, and getting both staff and
customers involved. (It’s fair to say that banking’s image may
need a little polishing these days.)
In January 2013 NatWest and RBS launched BizCrowd, a social media community designed to
encourage collaboration between small businesses. It’s a great example of banks using social
media to build communities of purpose. Insurer, AXA, has also established a digital resource for
small businesses.
Goldman Sachs uses social media to demonstrate thought leadership and increase the visibility of
its brand, using YouTube (with the option of leaving comments switched off), Twitter and LinkedIn
to share information. US insurance brand, Vanguard, uses Facebook to share information, as well
as hosting web chats. While American Express has found a way to share information visually, using
Pinterest.
Creating brand ambassadors. By using social media to develop and distribute reward programmes,
exclusive offers, competitions, etc, banks can encourage loyal customers to share their positive
experiences via social media. For example, if a customer feels that their query was handled
particularly well, they might tweet about how brilliant their bank has been in helping them, which
could catch the eye of some of their Twitter followers.
Financial brands can use social media to create brand ambassadors by giving something back.
American Express lets its members redeem account reward points for Facebook credits, and has
used Foursquare to offer money-off deals at small businesses on check-in. Okay, it’s no £10,000
student bursary, but these ‘deals’ show customers that they are appreciated by the brand.
And Lloyds TSB got involved in social media due to its Olympic sponsorship. By using a taggable
torch map called Torchviewer, and Twitter hashtag, #carrytheflame, the bank was able to reach a
huge number of people. Facebook fans increased from 3,000 to more than 38,500, while Twitter
followers tipped over the 215,000 mark. The interesting thing here is that Lloyds recognised both that
social media plays a key role in the creation of brand ambassadors, while also acknowledging that a
continued presence needs a dedicated resource to manage it.
Reaching a younger audience. Banks have always worked hard to capture the student market:
they are customers who should go on to earn higher than average salaries and are unlikely to change
banks afterwards. Sam Grimley, Digital Acquisition Manager at HSBC, says:
Managing social media engagement for financial organisations
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9. “I think one of the major benefits of using social media is the fact you are able
to have clear, open conversations with your target audience on their terms. For
HSBC Students we are able to speak to our target audience in a space they
are already participating in, we don’t need to try and build a new website and
then have to drive people there: our audience is already using social media and
wanting to talk.”
Other banks are trying to reach future customers at an even younger age. For example, NatWest used
Pinterest to showcase entries for its ‘pigs by kids’ drawing competition in 2012 (how many of us
remember the NatWest piggy banks?)
Barclays uses Pinterest to highlight its football sponsorship, while American Express shares its
UNSTAGED music sessions on its YouTube channel. VISA uses its YouTube channel to share
London 2012 and Super Bowl videos (the channel has over 35 million views as a result).
Aviva’s 2011 Magic Money campaign took to the streets to promote pensions to young adults (not
just its own products, but pensions in general). It’s also used a Facebook app to promote healthy
living, encouraging fans to send their friends e-cheers (Aviva then donated £1 to charity for each of
the first 1000 cheers).
Why social media matters
People in the UK switch bank accounts every 26 years on average, but the Government is making
the switching process easier, and there are signs that once the process is simplified, people will start
making the switch.
The Telegraph reports that 14 million people may choose to switch current accounts. This is in
addition to a recent YouGov poll, which revealed that 62 per cent of UK respondents wanted a
portable bank account number, a clear indication that if switching banks were made easier, people
would start shopping around.
Fair or not, a bank’s social media presence, its voice and level of engagement and responsiveness,
will play a part in shaping people’s perceptions of the bank, and factor into their ultimate choice.
The story is pretty similar in the US. Polling by the Consumers Union in July 2012 showed that 20
per cent of American customers had wanted to switch their checking accounts in the previous year
(citing fee increases as the main cause), but didn’t because it was too difficult.
It’s becoming impossible for banks to ignore social media, as Bank of America found out back in
2011 when it tried to introduce $5 monthly fees for using a debit card. One 22-year-old customer
started a change.org petition, the petition notched up over 300,000 signatures and the bank
reversed its decision. (There are dozens of change.org petitions asking for banks to negotiate on
home loans rather than foreclose, and while these individual cases don’t attract huge numbers of
signatures, they do appear to get the bank’s attention.)
Managing social media engagement for financial organisations
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10. Setting the rules of engagement
The first rule of any financial organisation getting involved in social
media is to create strict social media guidelines for all staff. Of
course, these should set out what they may and may not do under
compliance regulations, but they should also set some of the ‘softer’
rules of engagement. This includes the tone of voice, appropriateness of
responses and so on, as well as laying out responsibilities for different
teams and editorial guidelines.
These guidelines should be reviewed and updated at least every year,
to take into account changes in social media technology. All staff
should be trained in social media use, and this training should also be
updated regularly, to ensure everyone understands the responsibility of
community in a public, social, and heavily regulated environment.
Escalation processes should be clearly laid out within these guidelines
- what the social media team should do in the event of a crisis, or
if a user posts something illegal or threatening on the bank’s online
community, for example.
Set the expectations of each community. Agree what each social
media channel is for, and tell your community what to expect. If you’re
running a customer service channel, tell your followers what response
time they should expect (and stick to it).
Be clear what you will and won’t allow from your community. What’s
your policy on swearing, for example? Will you delete off-topic posts?
What sort of behaviour are you trying to encourage, and what do you
discourage? Set, write up and display the rules of your community, and
be very clear what action you’ll take if people break those rules. A good
list of examples can be found on www.visiblebanking.com.
Does the CEO tweet? And should he or she? Who are your brand
advocates on each channel and what control do you have over them?
Decide what you want the ‘face’ of the organisation to look like.
Christophe Langlois, author of Searching Finance’s A Practical Guide to
Social Media in Financial Services, cites Peter Aceto, the CEO of ING
Direct in Canada as a good example of a tweeting CEO. But be warned,
if your CEO is on Twitter, he or she should expect the occasional
customer to be in touch directly.
Managing social media engagement for financial organisations
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11. Managing the community effectively
Any community needs nurture, encouragement and careful management if it is to thrive.
First, set your engagement strategy by audience. Each audience group will need different care;
agree in advance how you will manage and communicate with them, and over what channels. The
way you manage a community with a student customer, for example, is unlikely to be appropriate for
a business audience. Set out the tone, language and style to be used with each audience – that way,
when you change community managers, you can be sure that there is consistency in your approach.
Social media is all about dialogue, not monologue. In a heavily regulated industry, this can feel as
though it’s going against every instinct of a financial communicator, but it’s important. Be as social as
you can, within the confines of legal compliance.
Managing a community takes time, effort and resource. It’s not enough to build a beautiful
Facebook page, you have to run it. Consumers expect brands on social media to respond to them;
if they ask a question, they want an answer. Resource the community properly, and encourage
interaction - it’s why you’re there. It’s also worth considering using a suitable tool which allows you to
keep track of, and manage, the conversations that team members are having with your community.
Plan your content across all your channels. A bit of planning goes a long way, and puts you in
control of your content. Create an editorial calendar that covers all your channels, so you know what
competitions, promotions, questions, polls and stories you’re going to run on all your social channels.
First Direct kicks this process off with a meeting to plan content for the calendar
Give people a reason to come back. If you want people to
follow you on Twitter or like you on Facebook, you have to
give them a reason. That might be access to VIP services,
or exclusive content, or competitions and sweepstakes.
Replicating your website on Facebook isn’t enough of a reason
for consumers to engage. Wells Fargo goes as far as to explain
why you should like its Facebook page, with exclusive news,
features and job postings among the ways customers are
encouraged to return.
Moderate the community. One of the quickest ways to turn
people away from a community is to leave it un-moderated. Left alone, Facebook pages quickly fill
up with spam and links to viruses shared among networks of friends, and rogue posters will soon get
wise to the fact that they can get away with bad language, or even posting illegal or abusive content.
Moderators within a community should be trained on escalation processes, to spot customer service
issues that need addressing quickly, or an issue that needs resolution to avoid a full blown crisis.
Don’t be afraid of criticism. Tempting as it might be to delete negative comments about your
product or service, it’s the quickest way to upset the community. Far better to deal with the problem
that’s caused the negative sentiment, and put it right, than simply delete the post. (For more
information on dealing with negativity in a community, see our paper on the subject at
www.emoderation.com/publications.)
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12. Managing social media engagement for financial organisations
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Crisis and risk management over social media
Citibank faced an interesting situation when members of the
Occupy Wall Street movement staged a protest in a Citibank
office in New York. Supposedly, the protesters were demanding
to close their accounts, and news was quickly reported that
Citibank had got the police involved, and a reported 23 people
were arrested. Citibank was widely criticised for what the
Twitterverse was calling “the stupidest public relations move in
history.” The video of the arrests went viral.
But Citibank reacted in a rather unexpected way. Instead of
closing ranks, the Chairman played an alternative video of the protesters’ action at a social media
conference (showing that they weren’t simply “closing their accounts”) and let customers make up
their own minds about the arrests.
HSBC used Twitter to update its customers when a number
of its cashpoints failed in November 2011, and was widely
praised for the way it handled communications from frustrated
customers, keeping them updated and personalising responses.
This is a great example to show that you can’t always control the
problem, but you can control the way you respond.
Spotting and managing a crisis over social media is a major part of social media management today.
For detailed information and practical advice on how to manage a social media crisis, see our white
paper on managing a social media crisis, on www.emoderation.com/publications.
Finance just got social
Despite the challenges posed by legal restrictions and regulations, banks and other financial
organisations are finding innovative ways to use social media within a strict legal framework. Social
media isn’t simply another marketing channel for banks, it’s a way of engaging customers, of solving
problems, and of researching and testing new products. Social media channels are creating entirely
new ways of reaching, interacting with and doing business with finance audiences.
As a result, the culture of finance is changing, to become more open and more engaging. More
social, in fact.
Source: The Realtime Report

13. Managing social media engagement for financial organisations
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Reading recommendations
If you’re interested in reading more, we thoroughly recommend Christope Langlois’ book, A Practical
Guide to Social Media in Financial Services.
He also gives case studies on YouTube:
UK Banks Leverage Social Media to Target Students (1/2): HSBC
UK Banks Leverage Social Media to Target Students (2/2): Santander’s I Love £50 Facebook
Contest Barclays’ 100 Voices
About eModeration
eModeration is a social media management agency which works with some of the world’s biggest
brands. Based in London UK, with offices in Los Angeles and New York, eModeration provides multi-
lingual community management and moderation services, and social media consultancy and crisis
management training and simulations to clients in a wide range of industry sectors. These include:
kids and entertainment, FMCG, financial services, pharmaceutical, publishing, media and telecoms.
Committed to providing a safe and engaging social media experience for children and adults,
eModeration’s CEO Tamara Littleton has over 11 years’ experience of community and social media
management and moderation. She has also advised the UK government on guidelines for child
safety.
For further press information, or to speak to Tamara Littleton, CEO of eModeration, please contact:
Kate Hartley
Carrot Communications
Tel: +44 (0)771 406 5233
E: emoderation@carrotcomms.co.uk
Twitter: @katehartley
eModeration Ltd, The Media Village, 131-151 Great Titchfield St, London W1W 5BB UK
Tel: +44 (0) 203 178 5050
© eModeration Limited 2013. This document is the intellectual property of eModeration Limited and
may not be duplicated or disclosed to any third party without the written permission of an authorised
officer of the company.