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Social media’s growing role in bank customer service

It makes sense for financial institutions to leverage the various digital platforms “because that’s where many of their customers live every day.”

Jul 21, 2023 / Marketing & Sales

Financial institutions, like most businesses, are finding more ways to leverage social media—including for customer service.

But not necessarily in the ways like Nike, Netflix or Starbucks would—renowned customer service brands that encourage followers to share as many stories and experiences as possible. After all, it’s not a shoe, a latte or a binge-worthy streaming show that customers would want to talk about on a financial institution’s Facebook page. It’s their money.

“Typically, banks would use social media for promoting visibility, new product opportunities and their business customers and how they’ve helped them, as well as the social good the bank is creating in their community or communicating community news,” says Joseph H. Cady, managing partner at CS Consulting Group in Lake Arrowhead, California.

For customer support, however, social media acts mainly as an entry point— a conversation starter.

“If customer service inquiries are received through social media channels, banks would typically quickly steer the customer to their normal customer service channels for the primary reason to protect their privacy and data security,” Cady says.

Such is the case at Ledyard National Bank in Hanover, New Hampshire, says Josephine Moran, president and chief banking officer of the $759-million-asset bank.

Several employees from different areas of the bank are responsible for monitoring all of the comments on Ledyard’s Facebook page and other social media channels like Instagram and LinkedIn—staff in marketing, in operations and in the retail bank that supports customers, Moran says. Staffers also monitor the social media channels and respond to comments on the weekends.

“If anybody leaves comments where they need help or they describe a situation where they needed help—or a situation where they weren’t helped—we will get back to them the same day,” she says. “We think this also shows other clients that we’re responding promptly and trying to resolve their issue.”

Another way Ledyard provides customer service is through organic social media content—posts that educate the bank’s followers about important topics, like how to protect themselves from identity theft and fraud, and other financial literacy topics.

Ledyard automates the initial postings of its organic communications, but the bank is currently not employing artificial intelligence-powered chatbots.

“We don’t want that automation because it’s not personal—not yet,” Moran says. “We feel like the human touch is why people bank with us. It’s very important to give people options to be serviced digitally, but we make sure to extend call center hours to 8 p.m.”

The bank also leverages LinkedIn, including via employees’ own networks, because they are “key to Ledyard’s ability to further educate and advise, reaching a previously untapped audience,” she says.

Balancing social media’s risks and benefits

It makes sense for financial institutions to leverage social media as an access point for customer support “because that’s where many of their customers live every day”, says Graham Tasman, national managing principal and banking sector leader at Grant Thornton LLP.

Social media is about “meeting customers where they engage online” and can be useful to resolve simple problems, serve as an access point and provide a means to direct further inquiry, Tasman says. For full-service help, institutions should be redirecting interactions to their established channels, where customer identities have been verified.

In addition to being mindful of controls and protections needed to ensure compliance with privacy and security rules, institutions offering customer support via social media also need to consider how that might create new unintended cyberthreats, Tasman says. Fraud attempts could be mimicking a banking promotion to a customer through a social media channel.

When onboarding new customers, financial institutions need to educate their customers that, while the institution offers services and access on social media, customers should understand that they should only share personal data through established and certified connections.

“This is a win-win, where social media works its magic by giving speedier access to customer service and potential quicker resolution to their problems without compromising privacy and security,” he says.

Katie Kuehner-Hebert is a BAI contributing writer.

We offer actionable insights on other customer service-related topics that can benefit banking institutions in the BAI Executive Report, “Keeping the customer at the center of customer service.”