Examples of Social Media in Banking and Finance by David Terrar

David Terrar is Executive Director at ITBrix and a well-known true social media expert (his blog). David is going to be the day-moderator at SOMESSO Zurich09 on November 3 this year. Below he shares examples of Social Media in Banking and Finance.

As I said in my last post, the smart organizations are the ones that realize the power of the connections and collaboration that social media tools can bring. As a prelude to SOMESSO I want to highlight some existing use cases in the banking and finance world as well as suggesting some information sources for finding out more.

Looking around the banking and finance landscape you can see the rise of use of blog and wiki technology for collaboration at Wells Fargo, Deutsche Bank, Dresdner Kleinwort Wasserstein (now Commerzbank), or social media oriented marketing campaigns by the likes of American Express and Visa. You can also see the other side of the coin – in the USA a number of consumer-driven anti-Bank of America blogs have shown how social media can adversely affect brand and reputation if it isn’t handled properly.

The most comprehensive example I saw last year was Pete Fields of Wachovia Bank speaking at the Enterprise 2.0 show in Boston, and then in San Francisco at the Office 2.0 conference. Although he was speaking in September 2008 just before the credit crunch started to bite, the story is still valid in demonstrating what can be achieved. Wachovia spent almost 18 months developing the business case and justification for using social media tools, piloting and proving the various components of their approach. Their objectives for using social media included trying to capture knowledge and experience from their aging workforce before retirement, but also to engage the high quality Generation Y workers that they would need to attract to the bank to succeed. The solution they put together includes portals, search, wikis, blogs, enriched profiles, and presence. At the point Pete was presenting last year the bank had 15,000 active team sites for collaboration. They were supporting more than 6,000 web conferences a month. This was an area where they could demonstrate “hard dollar savings” and they calculated they were saving $214 per meeting in travel costs. Reducing departmental travel budgets was one of the key ways they funded the project. Wachovia staff were having instant message conversations more than 100,000 times a day. They had been building up an internal “Wikipedia” they called Wachovia Wisdom, which had grown to 1,500 entries. Pete reported that, the month before, the companies internal blogs had been visited more than 46,000 times. You can see the video of Pete explaining the story himself on the Office 2.0 site.

Wells Fargo was the first US bank to start a corporate blog in march 2006 (although Verity Credit Union had started one over a year before that). The company have been using blogs inside the company for collaboration and brainstorming for years, and can lay claim to a number of firsts:

• First U.S. bank with a blog
• First bank with a student loan blog
• First bank with a business banking blog
• First bank in the world with a Second Life presence
• First bank on MySpace
• First bank with a VP Social Media

It’s fitting, therefore, that Wells Fargo should be the bank that took over Wachovia after the crisis.

Another social media topic that is reaching a crescendo of hype is Twitter. Many of us are big fans of the business use of Twitter and other micro-blogging tools, but we see many examples of Twitter misuse. Companies that are merely using the medium as another channel to push out press releases are completely missing the point. Amongst other things, Twitter can help you connect with your community of customers, or is a place to watch for potential customer issues that need to be addressed. Going back to Wachovia, their Twitter page says “Do you have a question about your Checking, Savings, or Online Banking account? Ask us! We’re here to help: M–F, 9-5 EST”. Their Twitter ID is monitored by two guys who answer customer questions and issues, and point to useful information sources and ideas. In my opinion it’s in the top 20 of corporate use of Twitter. It’s also interesting to see that Wells Fargo launched Ask_WellsFargo with the same mission earlier this year, and the same 2 Wachovia guys are involved as part of a team of 6. Twitter is something you should be taking seriously.

Lastly, here are some blogs and information sources you might consider watching from around the web:

BAI Community – a place to network for retail banking executives

Bank Lawyer’s Blog – commentary on banking law

The Bankwatch – tracking the evolution of financial institutions

The Better Banking Blog - innovation for financial services

Gonzo Banker – a collection of observations from Cornerstone Advisors

NetBanker – a leading online finance and banking blog

Visible Banking – and don’t forget one of our speaker’s Christophe Langlois

By David Terrar