Social media in payments: why has it taken banks so long to go social?

Last updated: 18 December 2019

Last month I was honoured to be invited along to speak at an event in London to talk about the importance of social media to today’s businesses, particularly those in the financial sector where, as a phenomenon, it is often overlooked. We also heard interesting presentations from Tracy Glynn, John Hartley, Christophe Langlois, Thomas Messett, Gilbert Réveillon, Alex Rolfe and Jairson Vitorino (all well worth a follow).

Regular followers of our blog will know that we are incredibly enthusiastic about embracing social media, and the banking industry should be no exception. Many of you will be connected to your favourite brands, artists or charities via one of the hundreds of social media platforms available, but it is only recently that we are becoming more connected with our banks. So, why have financial services lagged so far behind?

As an industry, banking has long been part of a culture of tradition, formality and even authority. Senior managers undoubtedly buy into this culture and this will affect communicative strategies at the highest level, creating an invisible barrier against embracing social technologies in today’s more social, more informal world. Let alone the regulatory issues banks face to ensure data and information remains confidential: many banks have hugely effective firewalls in place, blocking banking executives from using social media platforms at work. However, today there are over 900 million Facebook users and thousands of tweets every second. Banks can no longer afford to not be a part of these interactions.

Some banks have been quicker than others to get on board, however. Let’s take a look at a few of these now:

First Direct, a division of HSBC, has been one of the notable exceptions to the rule. For almost three years now it has been running a defined social media policy, prompted by the realisation that conversations about the bank and the industry were happening online, that they were not a part of. Somewhat ironically for an industry that thrives on trust from its customers, banks were not listening and engaging with their customers in a meaningful way. By building the right platform, First Direct, and others like it, stands to gain loyalty, trust and a tighter bond with their customers.

American Express, another company that made a success of embracing social media, also chose the platforms that suited its corporate goals, offering incentives via Twitter and Facebook to get people spending and engaging with the brand. Connecting directly with customers via Twitter opened up the business and allowed the bank to increase both its brand awareness and its potential financial gain from increased spending. When a new product or service is rolled out, the bank can now immediately share and discuss with relevant customers online.

HSBC and NatWest recently suffered from IT system glitches that meant customers were unable to access their account or withdraw money. An understandably upset public took to social media to express their dismay and communicate the issues they were having with their bank. HSBC, which had already put in place internal social media guidelines, was quick to respond and show customers that they were doing everything they could to resolve the problem. Although NatWest came in for some criticism of its handling of the system failure, its response was nonetheless encouraging that the financial services industry may have finally realized that social media is something they must embrace if they are to cater for an increasingly vocal customer base around the world.

Although it may have been a slow start, I’m hopeful that more and more financial services companies will begin to reap the benefits of going social. Keep checking in on the blog over the next few months for more on how banks are getting involved and the benefits they can expect to see.