BID Daily Newsletter
December 20, 2013

BID Daily Newsletter

December 20, 2013

It's a Bird, a Plane or Social Media Gone Bad

This year fans from around the world are paying homage to Superman on the occasion of his 75th anniversary in the comics. That's a long time for the Man of Steel to have spent saving the world from death and destruction. The good news is that despite some close calls, he's always managed to bounce back.
To us, Superman is sort of like the banking industry. It's hard to believe that 12Ys have passed since the Enron Corporation filed for bankruptcy, showcasing one of the largest corporate disgraces in US history. Since then, of course, there have been plenty of other black marks on the industry including Bernie Madoff, LIBOR manipulation, the credit crisis and the rogue trader who cost UBS a few billion dollars.
There will always be some level of corporate malfeasance out there, despite the good guys' best efforts to keep such despicable behavior in check. But there's another danger lurking today, one that's not as blatantly wicked as Evil Superman, but which has the power to do great harm if not used properly. We're talking here about social media.
Make no mistake - we think banks can and should be using social media. Used smartly, it has a lot of potential for good. Social media marketing can generate more business exposure and keep your team in touch with customers wherever they may roam. It can help with lead generation, gathering marketplace intelligence and reducing marketing expenses.
But, there's also the potential for social media to do great damage to a bank's reputation, so banks have to tread carefully to avoid the kryptonite. Indeed, over the past few years there are several examples of banks retreating from intended campaigns or having to pick up the proverbial pieces because things went unexpectedly awry.
Last month, for example, officials at JPMorgan were forced to cancel a proposed Twitter Q&A campaign after being inundated with thousands of angry tweets over the course of several hours. The bank was hoping to have a productive session between participants and Vice Chairman Jimmy Lee, but it turned into something quite different when Twitter users commandeered the forum to condemn the bank for various alleged bad behaviors. Ultimately, the bank pulled the plug on the feed and retreated.
In July, Bank of America similarly found itself in the hot seat, after an activist in the Occupy movement posted a tweet with a picture of himself being chased away by police from one of the bank's New York offices. The protester was clearly making mischief, but Bank of America ended up with egg on its face after its auto-responder kicked into action, tweeting boilerplate responses that highlighted the bank's commitment to customer service and setting off a real firestorm in the process.
Community banks are arguably less likely to suffer major media setbacks due to social media glitches, but the potential for business interruption and reputational risk is still a concern that shouldn't be taken lightly.
Wouldn't it be nice if, like Superman, banks could travel back in time to correct past mistakes? Unfortunately, real life isn't the comics and the aftermath of social media buffoonery isn't easily erased. You shouldn't avoid social media and you don't have to be overly concerned, but do we suggest you have good controls in place as you fly around the internet for your bank.