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Thoughts on Transparency & Social Media in Financial Services (15 Initiatives from 10 Countries)

Transparency is one of my favourite topics, and it is one of the most commonly used terms in financial services with “innovation” nowadays.

But what is real transparency in banking at the social media age? And more importantly, which Financial Institutions should be commended for their commitment to engaging with their customers and their employees in a transparent and honest way?

If you are a regular reader of the Visible Banking blog, you know how keen I am to distinguish marketing stunts from strategic initiatives focused on creating active and engaged conversations in an open environment. I’m not against successful PR initiatives, such as NAB’s “the Break Up”, so long as they don’t create a trend in the industry, alter the perception of the Senior Executives and have them think that “social media is a great tool to increase the efficiency of our campaigns and sell more products!”

I’ve listed 15 different types of social media initiatives which I believe would be qualified as “agents of transparency”. I’ve also categorized them into five key groups from the most tactical and the less “committed” to the most strategic and business oriented.

PR & Marketing
This is by far my least favourite type as it’s focused on PR and aimed to “demonstrate” how different the bank is. Again, I salute the initiatives which pave the way to more engaging activities where the customers take centre stage.

1. Firstdirect’s Live (UK): first direct has a great advantage over all its competitors, the direct bank provides great customer service and its customers love them. In October 2009, they launched first direct live, a section of the site where they display live comments, positive and negative, about the bank. It is good, but it lacks real engagement between the bank and its customers. What’s the methodology? How does that compare with Barclays, HSBC or Lloyds TSB? What’s the authenticity of those comments?

2. NAB’s “the Break Up” (Australia): on Valentine’s Day this year, NAB launched an innovative marketing campaign which cleverly leveraged social media to create and sustain good Word Of Mouth (WOM). I invite you to check my comprehensive coverage on Visible Banking.

Crowdsourcing
A few banks try to involve their clients or their target market to improve as an organisation or enhance their services such as online banking or mobile banking. This is an excellent way to demonstrate a willingness to listen and take feedback into consideration. Those initiatives remain limited in time and the challenge is to make the most of the insights collected, demonstrate you put those suggestions into action. Ideally, create a community of contributors and find a good way to engage with them on an ongoing basis.

3. Danske Bank’s “Better bank” (Denmark): last year, the Danish bank invited its customers via its homepage to express themselves and share their suggestions on how to improve and become stronger after those difficult times. You will find more info about this initiative and Danske Bank’s social media strategy in my video interview with Thomas Heilskov, Head of Social Media.

4. ABN AMRO’s Blackboard (Netherlands): a few years ago, when ABN AMRO Commercial Banking still had an innovation team, they invited their customers to share their thoughts on online banking. The bank decided to make those ideas public. I invite you to watch my interview with Daan Josephus Jitta, Former SVP Direct Channels & Innovation.

5. Webank’s “the Wepad Project” (Italy): Webank openly admitted that they would come up with a better iPad application if they’d let experts from outside the banking industry as well as Italian people share their suggestions and expectations. I posted a comprehensive review on the Wepad Project on this blog.

Voice Of the Customers (VOC)
There are two ways to collect and leverage customer feedback in the social media world: reactively by listening and monitoring online conversations on the web (forums, blogs, facebook, twitter…), or proactively by reaching out to your customers and urging them to share their feedback about your products, your services and/or your brand values.

6. American Express’ Customer Reviews (US): in the last 18 months, American Express established itself as one of the most engaging financial services firms on social media with a popular facebook and twitterpresence, as well as an active online community (B2B) the OPEN Forum. Since Q4 2010, American Express is displaying some of the dozens of thousands of customer reviews collected in 2010.

7. Perkstreet’s Tweets (US): perkstreet, one of the many online finance startups which demoed at Finovate, is a new player in the US banking industry. I love the fact that they invite their own clients to respond to questions about their products and services sent by their prospects on twitter. You need to be pretty confident you have excellent products and your customers are raving fans, don’t you think?

8. ABSA’s Open wall on facebook (South Africa): ABSA, part of the Barclays Banking Group, has a unique approach to facebook. Indeed, the main goal of its official page is to openly address customer queries. I’m tracking 620+ facebook pages in banking, financial services, insurance, in over 65 countries. An outstanding 30% (!) of those pages have an open wall where the fans can express themselves directly. Of course, you must make sure to actively moderate your page and do what is required to minimize the level of risk.

9. Progressive’s Moderation process (US): Progressive Insurance does a good job leveraging social media to make the most of the popularity of Flo, “the Progressive Girl”, and engage with their customers openly on facebook. Last year, I shared my comments about the very transparent moderation strategy on their page.

10. Crédit Agricole Pyrénées Gascogne’s “You Heart us, you Hate us?” (France): as far as I am concerned, the French regional bank is the most experimenting bank in social media, under the leadership of their truly visionary CEO, Jean Philippe. On their homepage, the bank invites its customers to express themselves, and guess the volume of negative comments vs positive comments? 90% are negative. Is Jean worried?  Not at all, because they make sure to answer every single unsatisfied customers. So far, they’ve successfully turned all of them into raving fans.

Strategic
The Senior Executives understand the value and the importance of leveraging social media to build trust and stronger customer relationships. They are active users themselves or let their teams engage in open discussions on serious strategic topics. Their website is packed with customer generated content.

11. Wells Fargo’s the Wells Fargo Wachovia blog (US): Wells Fargo is the king of blogging. They launched their first blog back in early 2006, and nowthe bank counts 5 public blogs. In January 2010, they launched “the Wells Fargo Wachovia blog” to cover the extremely sensitive merger between both banks, and engage in open conversations with worried employees, clients, analysts…

12. ING Direct’s CEO on twitter (Canada): Peter Aceto, President & CEO of ING Direct Canada is one of the most approachable and transparent Senior Executives in the banking industry. He shares his thoughts on daily basis on his twitter account. I invite you to check my list of Senior Executives on twitter to find out more about Peter.

13. USAA’s Customer Feedback throughout their site (US): USAA, one of the most innovative financial institutions in the US and in the world, demonstrates its total commitment to transparency and offers customer reviews for the vast majority of its products and services, some of their insurance products rated only 3.8 out of 5.

Financial
This is the most serious type of transparency. Here we are talking about your money.  The financial institution will tell you exactly how much it makes thanks to you (not sure what you mean by this) and how much money you’ll have to pay in interest. This approach paves the way towards financial freedom and better management of your finances: no hidden fees or indecent return from the bank!

14.  Wonga’s Representative APR 4124% (UK): Wonga.com is a cool online service, encouraging responsible lending, which enables you to get a loan within a few minutes. They make it clear on their homepage, the Representative APR is about 4124%! If this isn’t transparency… I remember meeting Errol Damelin a few years ago when he was still working on the very own concept and processing engine of Wonga. Congrats to him and his team who has just successfully raised £73 millions.

15. Caja navarra’s “Civic Banking” Model (Spain): the relatively small Spanish saving bank gained worldwide “fame” when his current CEO, Enrique Goñi, launched the more transparent and more participative “Civic Banking model” back in 2004. In the last couple of years, CAN has been keen to leverage social media in order to take its approach online and better engage with its customers and the community projects they are sponsoring. At the end of last year, they launched an innovative twitter contest via DMs.

So after reading this post, how transparent do you find YOUR financial institution?

I am keen to help you with your on social media strategy and speak with you about twitterfacebook, customer reviews & social commerce in banking, financial services, and insurance.

Don’t hesitate to call me (0044 7736 446 357), send me an email (christophe.langlois@visible-banking.com), or DM me (@Visible_Banking).

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