A recent study has shown that customers who engage through social media spend 20-40% more and demonstrate greater loyalty. It’s a compelling benefit that financial institutions are keen to realise as they run campaigns to engage with their customers through social networking platforms: those ‘likes’ are translating into dollar benefits.
Like any organisation using social media to connect with customers, there are risks inherent in this comparatively new channel for communication and engagement. This is even more fraught for financial institutions who are subject to legislative requirements, financial regulations and, more subjectively, want to maintain a reputation as trustworthy and secure. This all means that Australian financial companies face unique risks when engaging through social media, such as:
- Exposing customers to phishing attacks as they become used to communicating through social media with their financial institution
- Inadvertantly disclosing private information about a customer
- Employees being seen to provide financial advice without being authorised
- Employees disclosing information that may impact the sharerprice prior to release to the stock exchange
These are not new risks for organisations in the financial services sector and you may well think that the existing mitigants would address these risks: these might include customer service employee training, employee policies around customer data, IT controls to prevent and address phishing attacks. Aren’t these enough?
Let’s take a closer look at Commonwealth Bank Australia, they have the most social media followers of any Australian bank and connect with their customers across multiple platforms, customers can even pay each other through facebook using the Kaching mobile application. Their customers are interacting with the bank through official social media channels such as the @commbank twitter account. What’s different to more traditional channels of communication is that any employee, not just authorised customer service staff, may be identified as a Comm Bank employee and comments they make on platforms with their personal accounts such as facebook or twitter could be linked to the bank. Whereas previously any bank employee who comments on a cranky customer they dealt with at their mate’s backyard barbeque might not be behaving ethically but their behaviour is exposed to a close group of friends. Now, a comment made on twitter after what might have been a long and frustrating day for a branch employee can be seen by anyone!
Many organisations are recognising the importance of a social media policy to address the risks inherent in employees engaging in social media platforms where their personal profile might be linked to the organisation, through naming their employer, their linkedin profile or other means.
Comm Bank’s social media policy, in line with many other organisations’ policies, requests that employees posting on social media sites broadcast they are CBA workers and they do not speak officially for the company. However their policy attracted a great deal of publicity last year as employees and their representatives objected to the wording of the policy and the consequences for non-compliance. This has been since been revised however it highlights the importance that a policy is not just aligned to the social media strategy, but also developed and adapted to in line with the rights and needs of employees.