Debit Card Fees and the Social Media Backlash

As I discussed in my last post, debit card fees have been a hot topic the last 60 days especially for the big banks. Now we see many of these same banks, including SunTrust and Regions Bank, discontinuing their monthly fees and refunding those customers who had paid in previous months. Today, Bank of America finally conceded and are cancelling their plan for the $5 fee scheduled to start in 2012.

What is so fascinating is how much of an impact social media had on these decisions. For example, there was a young woman in D.C. who started a petition on a website, change.org, to "Tell Bank of America: No $5 Debit Card Fees." She's gathered over 300,000 signatures supporting her cause.

There have been thousands of Twitter comments and blog posts expressing outrage over the proposed fee from BOA. One recent post is a pretty good example (with a Halloween theme): ShooterOneSix "What's difference between a vampire & Bank of America? The vampire is only after your blood while BoA wants to suck your CASH too!#ows #p2." It has even spawned a Bank Transfer Day on November 5th when big bank customers are encouraged to move their accounts to a local credit union. Again, this has been spread through social media channels with incredible velocity.

So what's the lesson here? There are many, of course. One that immediately comes to mind is think before you act. While it may sound good sitting around a boardroom and crunching the numbers, this plan should never had made the light of day. If these banks had engaged their customers in a dialogue beforehand, I'm quite sure they would have seen the negative impact immediately. Remember, social media is a two way street. Now they have yet another publicity nightmare to clean up.

Borders Closing and Banking: What's the connection?

As many people have heard by now, Borders, a 40 year old retailer of books and music, is closing it's remaining 399 after a last minute attempt to sell itself. It's demise is blamed, in part, on management's strategy to continue building Superstores as people started shopping for books and music online.

So what's this have to do with banking? Borders made the fatal mistake of sticking with it's strategy to expand through physical locations while ignoring the behavior of it's current (and future) customers. They ended up too late to the marketplace and were saddled with large retail locations and no customers.

Over the last couple of years, I've participated in a number of industry events, as either a speaker or panelist, on numerous topics including social media and mobile banking. I find it increasingly apparent that many of the community bankers I talk to are still in the "Borders" mode. While they see traffic declining at the branches, they are unsure if they should get involved in social media or provide a mobile banking solution. They are ignoring the societal trends and taking a "wait and see" attitude. Given the speed at which consumers adopt new technology (how many people even heard of Twitter in 2009?), bankers today won't survive with that attitude.

So here's a message to all my fellow community bankers: I encourage you to take some risks, try new things and stay relevant so you don't become the "Borders" of the banking industry. Your community and, most importantly, your customers, need you.

What happens to Social Media sites when you're no longer around

A friend of mine recently died after a long, close to three year struggle with Ewing's Sarcoma. She was a very brave and inspirational woman and will be missed by many close friends and family.

In addition to knowing her personally, I was friends with her on FaceBook. Which brings me to the title of this post. We continue to be "friends" on FaceBook even though she is no longer here. People continue to post remembrance's on her passing and tag her in pictures. In other instances, I've heard about people who go back to their friends page on the anniversary of their passing. It's a very interesting phenomena. It's almost a living memorial.

Suppose, however, you didn't want to live on forever on FaceBook or LinkedIn. As I think about this, I'm not sure I know what I'd want to do when I'm gone. Is it better, for those around you, to have a place that keeps your memory alive for them? Would you prefer to have it all wiped clean and let the memories fade away? Just another unintended consequence of this thing we call Social Media. Frankly, it makes my head hurt thinking about it.

Some Random Social Media items

Here are a few random items that I came across over the last week. Happy St. Patrick's Day to everyone!

• From The Financial Brand, an article outlining the results of a the Edelman survey on Trust in US Financial Services. Not surprisingly, consumers still showed little faith in their financial institutions. For those of you in social media, the good news is that consumers value "honest communication" and "open and transparent" as the most important factors affecting reputation. Isn't that what social media is really all about?


• On a related note, one of my co-workers shared an article on Financial Planning.com about the limited adoption of social media in financial services. There is one particular quote that was spot on, "The downside for many is compliance. 'It takes five minutes to sign up for Facebook, but three to four months to make a social media plan that makes your legal and compliance departments satisfied,' said Hadley Stern of Fidelity Investments." Sound all too familiar? I think this is one of the biggest hurdles many organizations face as they consider engaging in these channels.


• From the "How not to use Social Media in B2B Sales", I recently received a tweet from some random guy asking me if I wanted to see a demo of his company's "Actionable Alert" product. I had no idea who he is, where he's from, or even how he found me. This kind of approach is like asking a girl out on a first date when you haven't even been introduced. The least he could have done was provide some context for why I would even be interested. Not cool. He should talk to @Clagett from Geezeo about how to use social media to engage prospects.

Doonesbury, Gen Y'ers and Banking

I've really been enjoying the recent Doonesbury comic strip this week. For those of you who don't follow it, here's the one for today.

The basic premise is two twenty-somethings meet for lunch and spend the entire time on their mobile devices. Anyone who has kids or young adults knows that this isn't that far fetched.

So what does that have to do with banking? These are the current/future banking customer's of today. How can you hope to engage them in something as mundane as banking if you aren't meeting them in the social media space? Let's face it: if they aren't talking to each other face to face, how will you ever get them to talk to you?

Ravens Football and Social Media

This past weekend marked the end of the 2010 football season for me. My local team, the Baltimore Ravens couldn't get past their rivals, the Pittsburgh Steelers, in the 2nd round of the AFC Playoffs. I still feel an emptiness.

As I reflected on the season, I realized how much social media played into it. In addition to generating my own tweets from our tailgate or during the game, I had just as much fun following other Twitter users. Whether it was other local fans, local sports writers like @mattvensel, @jamisonhensley, or @wbalpete, or even Ravens players like @rayrice27 and @WillisMcGahee. I even had the chance to interact with out of state friends as our teams clashed on the gridiron. It truly made it a more rich and enjoyable experience. Now if we had only beaten the damn Steelers......

Banning Social Media in the Workplace

I recently came across an interesting and disturbing statistic the other day. According to a Robert Half Technology CIO survey released earlier this year, over 55% of the 1,400 CIO's surveyed ban the use of social networking sites in the workplace. I really found that quite disturbing.

If the concern is productivity, individual employees in their 20's are as likely to be engaged via their smart phone as they are through their work pc. So they will find a way to engage their friends through these social outlets even when they are banned. It seems a strong stance to take in this day and age.

For corporate marketing, this may be the biggest constraint that individual marketers will face in using these tools. How can you build any type of meaningful social media engagement if your company bans it in the workplace? The better answer, in my opinion, is to build a social media policy that addresses these issues and draws the line between personal and corporate involvement. I addressed this in an earlier post this year. There is also an online database of other social media policies you may want to explore as well.

The Good, the Bad, and the Ugly of Social Media

With apologies to Clint Eastwood, I recently experienced all three. Actually, it began the same day I posted my last blog entry. Our bank had an offer that provided a bonus if you opened a checking account and met certain criteria. The promotion began in July and most of the accounts were opened locally, through our branch system. Everything changed when, on October 7th, a blogger on the site DepositAccounts.com found the offer and posted on his site. Within minutes, we began receiving phone calls, online chats, and applications from all over the country asking about the offer. In a little over two weeks, we processed as many applications as we had for the first six months of the year. It was insane.

The Ugly- As Murphy's Law states, anything that could go wrong, did. We declined many of these accounts because they didn't meet our approval criteria. Unfortunately, we had issues refunding their money in a timely way. We received some pretty nasty feedback from these folks.

The Bad- Our intent was never to run this as a nationwide campaign. It was designed to help us grow our local customer base and build relationships. It is unlikely that many of the accounts we opened from outside our footprint are going to be long term customers.

The Good- As these prospects visited our site, they found our promotional CD offering a very competitive rate. We generated a good number of these accounts that will help our core deposit base. Let's face it, CD's are far less risky than a checking account.

We learned a very powerful (and sometimes painful) lesson about the impact of these social media groups. This will certainly change the way we position our promotions on the web. Hopefully,we can figure out how to more effectively manage these groups in the future.

Boomers and Engagement Banking- two trends converging?

A couple of recent posts last week caught my attention.
The first was a MarketingProfs post. They, along with many others social media sites, highlighted a Pew Research study that found the fastest growing demographics among social media users is adults age 50+. In one year, use of social media by these online users doubled to 46%.
The second was the launch of a new site called Banking on the Future jointly by Sapient Nitro, Geezeo, and Brett King. The premise is that we (bankers) are entering a new era they call Engagement Banking. This will go well beyond the traditional branch relationships by using Technology to engage customers in many different ways.
While separate items, they appear to be the converging of two very similar trends. Boomers are moving to the social media space in droves, embracing this "new" way to engage their friends, family, and merchants. Bankers, or at least the one's looking to engage their customers, are adding services like Personal Financial Management tools and mobile banking. Interestingly, the focus for engaging customers, whether through social media or new financial management tools, has traditionally been aimed at the younger generation. Given the recent trends, that may not be true for long.

Getting ready for e-Finance next week

I'll be co-presenting at the e-Finance Marketing & Innovation Conference in New York next week. Our session is entitled Social Media in Action: Turning Customers into Lifers. We are focusing on some very specific examples of our social media interactions and avoiding the theoretical discussions that seem to dominate so many of these events. If you are attending, please say hello. I'd love to meet some of my "virtual" readers in person.

As we were prepping for the event, it gave me a chance to reflect on the growth of my own engagement with others through the social media outlets. From my first tweet in October, 2008 to today, when I'm checking in via FourSquare, writing both a personal and company blog, on Facebook, and, of course, tweeting on a regular basis. It's been an interesting journey that doesn't look to end soon. Wonder what's next......

A Social Media discussion from Net.Finance

As mentioned in a previous post, I attended the Net.Finance Conference in Chicago last week. It was a very nice turnout of financial institutions, investment firms, insurance companies, and vendors. One of the personal highlights was watching a Cubs game from the Wrigley Field Rooftop Club as a guest of Rosetta, one of the long time sponsors of the event. I had the pleasure of being part of a panel discussion called Prioritizing Technology Initiatives to Gain Competitive Advantage along with Stu Fisher, SVP of Addison Avenue FCU and Mark Schwanhausser, a Research Analyst with Javelin. Social Media and Personal Financial Manager (PFM) solutions were the two primary topics. Today's post will focus on social media.

Both of our companies have been early adopters of social media including Twitter, FaceBook, and Blogs. Addison Avenue recently added some community groups and hired a social media manager to add focus to their efforts. We will be adding a Community component to our site in June. There are some compelling reasons for participating in social media. Javelin's research indicates that over 52% of all consumers are active in social networking, with the 35-44 year-old's the fastest growing segment.

While our organizations are very different, we did agree on one key point. Social media should be an extension of, and not separate from, your overall web strategy. Let's face it, bank web sites can be somewhat boring with product descriptions and (lots) of regulatory disclosures. Our goal has been to connect with customers and prospects, build the brand, and have some fun in a less formal environment. How you use it, or whether you even participate or not, depends on your overall strategy.

Next post will be on the Personal Financial Management discussion from Net. Finance.

Follow Up on the Social Media Policy

I had an opportunity to reach out to a number of local Technology people about their social media policies, including Steve Kozak of the Greater Baltimore Technology Council and Larry Fiorino, the CEO of G.1440. Here's what I've found:

• A few companies have one. There is even a site that publishes corporate policies if you want to see some samples. http://socialmediagovernance.com/policies.php
• Other companies simply block access to the sites for all employees with no exceptions.
• Most other companies simply don't have a policy and don't seem concerned about it.

We finalized ours this week and it is a pretty good combination of suggested behaviors (Netiguette) while addressing the compliance and legal concerns. We'll be sharing this with our employees shortly and making it part of our Employee Handbook as well. In a highly regulated industry, we think it is important.

Developing a Social Media Policy

We've been grappling with a social media policy for the last couple of months. It's been an interesting process. Much of the content has been gleaned from other larger corporations who publish their policies. Our goal is to provide guidance to "official" bank social media participants as well as other employees as they engage in their social networks. Very challenging.

Let's face it. The line between business and personal is so blurred when you add in the social media component. Some of the questions we are dealing with are, for example, do you prohibit or simply discourage the use of social media sites during the work day? If so, how do you monitor this and what are the consequences if you are caught? These are just two examples of the challenges facing us in this highly regulated environment. I'd love to hear from others on how they are addressing these issues.

Content + Visibilty + Promotion= Increased Readership

At our financial institution, we've had a Blog for over two years. Frankly, it was buried in our About Us section with little traffic to it. Recently, however, we've seen some significant increases due to two significant events. First, we posted an article discussing the Reg E changes coming up this summer and designed a banner on the home page to promote it. In a little over two weeks, this post alone has generated 601 page views and 6 comments from customers. Second, we brought the Blog "front and center" to a more prominent spot on our Home Page. Given the traffic on our home page, we think this will dramatically increase our page views and comments. We are really excited about the initial results!
And, of course, we continue to use social media tools like Twitter and Facebook to make our extended networks aware of the new posts. Let's face it, content and visibility without promotion is like a tree falling in the forest; does anybody really hear it?

Social Media Marketing Tactics Going Mainstream?

According to recent research from Unica, via the eMarketer website, social marketing has become a "must have" in organizations. That said, the integration of these sites varies significantly by tactic. Many of the tools continue to be used for discrete events not directly connected to the overall marketing campaigns.
We've seen the same challenge in our institution. How do these statistics compare to your experience with social media marketing in your organization? I'd love to hear your thoughts.

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Bankers Take Note: Facebook Market Share Surpasses Google

As noted in a recent Socialnomics blog post, Hitwise has documented that Facebook now exceeds Google in weekly market share. Traffic increased 185% from the same time last year versus a 9% increase for Google.

So what, you ask? Well, for those bankers who have chosen to sit on the sideline and avoid the social media, the "Tipping Point"is here. While you depend on the traditional Internet marketing efforts using Google search terms and SEO strategies, your customers (and prospects) are flocking to social media sites like Facebook. It may be time to rethink your strategy. Many of your competitors already have.

If Girl Scouts of America Can Do It .....

As most people know, January through April are the primary selling months for Girl Scout Cookies. Girl Scouts all around the country go door to door selling their cookies, the major fundraiser for theses local groups since 1917. The selling process has remained pretty much the same since it's inception. Until now.

Last night, on the National Public Radio (NPR) program "All Things Considered", there was a story about a troop outside of San Francisco that is using online appeals through various channels, including social media outlets like Facebook. It is fantastic to see these young entrepreneurs using today's technology to market their products, in addition to the more traditional sales approach. There is a lesson to be learned for those of you who aren't sure about the value of social media. These Girl Scouts and their leadership certainly get it.

Big week for Social Media

Well, It's been a pretty interesting week around here. This morning, an article about our use of Twitter was released in the Baltimore Business Journal. A small excerpt can be seen here. We were pretty excited to be recognized for these efforts.

Later in the afternoon, we participated in Digital Insight's 2nd Twitter Town Hall with the topic of "Financial Fitness for Financial Institutions". The discussion (which can be see at #ditownhall) focused on FI's 2010 plans to address the financial needs of the consumer. It was a very interesting dialogue with a lot of participation from individuals and institutions around the country. We really appreciated the opportunity to participate.

One interesting point. There appear to be few of our peers in the banking industry who actively participate in this channel. The Journal article specifically mentions other, local FI's who aren't even exploring social media. In the Town Hall, many of the participants were from credit unions or the credit union industry. They really get it. We were really the "token" bank involved in the discussion. Seems like many other banks are missing a huge opportunity to connect with their communities via these other channels.

Some takeaways from the GBTC Digital Media event

I just participated in a Greater Baltimore Technology Council event entitled "Digital Media in Action: Engaging, Implementing & Creating Tangible Outcomes". My associate, Steve Kruskamp, and I shared with the group the evolution of social media in our organization.
I also had the chance to attend a couple of other sessions as well. Here are some takeaways.

Todd Marks and Vince Buscemi of Mindgrub Technologies talked specifically about a recent project for Voice of America in China and the ROI of that effort. What I really liked, and want to explore in 2010, is the use of widgets to engage our customers. We are rolling out a new PFM application this year and a widget that could logically make a connection with the new service could be a good fit. We'll have to look into it.

Will Davis and Mike Sweeney of RightSource Marketing talked about the blog as the hub of your social media efforts. From their perspective, it is especially critical in the B2B space. It can replace the "first meeting" and provide an opportunity for prospects to see how you think, not just visit your website to see what you do. I think that is some great advice.

Snow?! In Baltimore?! This weekend?!

On December 4th, we posted the following on Twitter: "1stMarinerBank: Snow?! In Baltimore?! This weekend?!"

In less than 5 minutes, we received the following message back: "@1stMarinerBank Snow in Baltimore? Not ready for that yet. Heading there next week and would love to meet you."

It was from a company called Geezeo, a provider of an online Personal Financial Management (PFM) product that they sell to financial institutions. Unbeknown to them (I think), we were ready to commit to this service with another, well established vendor in a matter of days. In fact, the contract was in our Legal area for review. The offering is considered to be the "Best in Class" in the industry, but it wasn't exactly what we wanted. So, while it didn't seem necessary, as a courtesy we agreed to meet since they had reached out to us through Twitter.

We met in our offices on December 10th. We were blown away. It was like they had designed exactly what we wanted- at a pricing model that made sense for us. By December 14th we received a proposal, negotiated a few terms, and had the final agreement from them on December 17th. Wow! Now that is the speed and power of social media.