Whilst social CRM sounds great in theory, it also presents financial institutions with a series of far reaching problems and challenges. Scott Thompson reports

The case for social CRM and social media customer service technologies is a compelling one, particularly when applied to the retail and travel sectors. Tesco has a growing operation across multiple contact centres. The grocery giant’s branded Twitter account, connected to head office and the contact centre, aims to offer much more than generic support. It reports that customers are taking specific problems to Twitter, about specific stores, even while they’re still shopping.

In the transport services sector, Arriva engages with over 70,000 followers across 70 in-house social media accounts. It uses its profiles to keep passengers informed of possible delays, weather conditions, road closure and accidents. Given that complaining about the transport system is a national past time in the UK, Arriva knew that customers were likely to air their grievances in a live environment. So to prevent abuse CrowdControlHQ helped it set up a swear word dictionary. The company uses buzz-monitoring to alert the communications team if any of the highlighted terms are used and automatically blocks, or sends for moderation, any incoming or outgoing suspect posts. It also allows the central control team to give employees a tiered level of access, it monitors use and provides an audit trail. And it protects passwords so that Arriva doesn’t have to worry about an employee leaving the company and taking control of the accounts with them.

But what works for retail and travel doesn’t necessarily work for the financial services sector, which faces a number of problems when it comes to integrating social media into an CRM strategy, chief amongst these being legacy issues and unprecedented levels of regulatory change. There are, however, some success stories to be found. Down Under, Commonwealth Bank, something of a trailblazer in this field, claimed a world first for a retail bank when it recently launched a new online support forum, Support Community. Backed by crowdsourcing platform Lithium, this allows customers to search for support and advice about retail and business products and services, share their knowledge and participate in discussions. Accessible from CommBank.com.au, NetBank and the CommBank Facebook pages, questions are answered in real-time by the community as well as CommBank experts.

In the UK, meanwhile, online only outfits have been leading the way. first direct says that it is embedding social media into all areas of the business as it aims to create a fully integrated and seamless experience. first direct Lab, its crowdsourcing platform, for instance, is populated with content such as product designs, service innovations and website concepts and updated on a regular basis. The High Street has been making up lost ground, however, with the likes of RBS launching an online Ideas Bank portal and @NatWest_Help placing high up in the UK Twitter Social Customer Care Leaders survey. While Metro Bank has been particularly proactive on Twitter.

Away from this, though, there is much erring on the side of caution. Merlin Stone, head of research at The Customer Framework, comments: “I think they (the banks) are correctly tentative about it, experimenting in using it, not just by having their own pages (not all have) but by advertising on it, particularly to younger customers, while monitoring closely what is being said about them in the wider social world. I think it’s too early to say who is doing well or not in this area – and in any case the results of advertising campaigns may be good while the handling of issues raised on social media may be bad. I don’t think in this respect that banks are different from their peers – big retailers, telecoms and media companies. In any case, much of their work is being done by their marketing/social media agencies, whether in terms of outbound communication or monitoring comment. In this latter respect, social media has made banks’ lives easier, strangely, because monitoring social comment is easier and faster than monitoring press.”

Nigel Shanahan, MD and founder of customer engagement specialists, Rapide, observes: “Some business sectors are flocking to social media, with consumer goods leading the charge. Retail banks, however, seem to be lagging behind. Few have taken even tentative steps into the social media environment and even less have initiated formal programmes.” Recent research by Ovum suggests that Asia-Pacific and American retail banks are spearheading approaches to social media engagement whereas their European counterparts are lagging far behind. And according to a survey by Social Media Explorer, looking at banks that have the best social media strategy, not one of the top 15 was European. “One top five UK retail bank that has started a social initiative is only using social to market to existing and potential customers and not to actively engage in dialogue. The simple truth is that most social media activity between banks and their customers is now being driven and maintained by marketing departments.”

What are the main issues and challenges that organisations face when uniting social media with the various other CRM solutions they use? “I’m not sure that this is what banks want to do or even should do. Most have so much to do to get their basic CRM right, including making sure that they are promoting the right product at the right time to the right customer, being responsive to inbound communication, being able to respond to it by appropriate offers which include contextual data (e.g. data given during contacts), and perhaps most importantly of all ensuring that all their customers can bank properly over mobiles (many still don’t have proper apps for all the main platforms, with some just having balance checkers),” Stone observes.

One of the principal challenges banks (or indeed any customer service organisation) face with social media is that of aligning the real-time nature of the social media channel with the often significantly slower customer service processes; i.e. agents may be responding to customers in real-time on Twitter, but the SLA for the department that needs to solve the problem is several working days, or they may be unable to answer the customer’s question and push them towards the phone channel (which is exactly what the customer doesn’t want to do and why they have used social in the first place). “This means that whilst the bank gets points for customer service responsiveness, it actually doesn’t deliver the solution to the customer. This challenge is as much due to the lack of digitised operational processes as it is to systems integration; another example of the need for organisations to consider digital transformation holistically, not just as an IT or systems integration problem,” says Maggie Buggie, vice president and head of digital transformation at Capgemini Consulting.

Managing social conversations is a very resource-intensive task; organisations often underestimate the effort required to maintain a consistent ‘voice’ across all channels and provide responses to customers in the time frames they expect, Buggie believes. “In the case of retail banking, this is particularly challenging, as the tone of voice within social channels is typically considerably less formal and more direct than in other forms of written communication, such as customer correspondence or even marketing collateral. In addition, the different social platforms such as Twitter, Facebook, LinkedIn, Google+ and Pinterest all have their different protocols and a tailored approach should be taken to each: one size does not fit all.”

She adds: “Social produces a vast amount of unstructured data, and whilst this is an opportunity, it can also be difficult to analyse and apply to specific consumers (to improve consumer understanding). There is also significant data permission and privacy legislation that restricts data mining from multiple sources using PII, which in a highly regulated business requires stronger policy frameworks, banks having greater access to PII than most other organisations. Similarly, integration of modern social listening tools such as Eloqua or Salesforce Radian 6 into legacy systems which can be disparate and siloed presents technical challenges and significant expense. As a result banks may be unwilling or unable to do it, meaning that agents do not achieve a single view of the customer, and resulting in a disjointed customer service.”

Rapide’s Shanahan also flags up existing technology, process, culture and regulation concerns. Getting the most out of social media requires banks to rethink the way they integrate their technology platforms, he notes. Creating the optimal IT environment for social media requires more than simply opening up a Facebook or Twitter account. Indeed, to maximise returns, banks must carefully consider how they can bring their customer data, products and services together into a single IT platform to make banks more accessible and responsive to their customers.

“Integrating all of the available customer information, whether this be social, VOC or existing CRM data into a single and accessible customer record will not be an easy task for most banks. It will require significant changes in banks’ technology infrastructure and related processes and controls. It will require disparate technology systems to interoperate in real-time, sometimes across geographies and distinct technology platforms. Banks will be required to transform the way they collect, analyse and share data across the enterprise. Beyond integrating thousands of data points in real-time, the shift to an CRM system will also demand rigourous controls, streamlined processes and effective governance frameworks to ensure that data is being properly managed and secured,” he says.

He adds: “Retail banking is already one of the most regulated sectors on the planet and it’s therefore no surprise that retail banks would seek to comply with industry guidelines with regards to their use of social media. However, such guidelines do not yet exist which leaves an already cautious industry reluctant to take its first steps. The FCC, for example, has recently asked the investment industry to submit their social media policies to prepare for an industry review, but are still a long way off from delivering their own guidance on social media. Most social media activity between banks and their customers are now being driven and maintained by marketing departments, yet most of these marketing departments have not properly updated their compliance frameworks to reflect the very different characteristics of social media (fast response time, total transparency, varied audiences, etc). Banking executives will therefore want to take a closer look at how marketing activities – in particular – are adhering to compliance requirements.”

Proceed with caution
That’s the present, then, but what does the future hold for the retail banking sector and social CRM? According to The Customer Framework’s Stone, it’s: “More years of careful experimentation, interesting marketing communications campaigns, lots of listening to customers’ problems!” Rapide’s Shanahan says that retail banks will continue to take a cautious approach to social media, initially focusing on using social sites as an additional marketing platform before moving on to fully fledged engagement. “Many are reluctant to commit seriously to a full social media strategy without the comfort of a regulatory framework to work within. Those that may benefit the most from social media as a source of feedback and insight will be those with the most agile and responsive systems and processes. Hence newer entrants to retail banking such as first direct, Virgin Money and Metro Bank may have an advantage over long established financial institutions that can be hamstrung by disparate, complex legacy systems and processes.”

The only predictable thing about social media is its unpredictability. Nobody can say for sure how social networks will evolve in the coming years; however, this could have a number of implications for banks. “Combining social media data with other direct forms of solicited feedback could allow banks to move away from mass marketing to deliver highly targeted offers and promotions. In addition, banks could become increasingly proactive in their management of issues through acting upon real-time verbatim feedback with social as one source. The role of branches could also change to be focused more on complex customer transactions like mortgage and loan applications or the provision of investment advice with everyday transactions being conducted through social media ‘apps’ that will enable the bank to verify credentials and serve up balance information and payment functionality using the social network’s authentication system.”

For Capgemini Consulting’s Buggie, the future of banking is the integration of digital and offline channels. first direct and Hello Bank (recently launched by BNP Paribas in France and Germany) are examples of the direction that the industry is moving: combining a best-in-class digital experience to customers while providing them with the reassurance of a physical High Street presence. “In this sense we will see the evolution of the role of the branch within an all-channel experience for financial services customers. This requires an integrated customer experience, and social (along with mobile) will increasingly be one of the primary contact channels for banks; meaning that banks must work to align their people, processes and technology to support a consistent brand both online and offline, and to ensure that they are able to provide a consistent customer experience across all the channels they utilise. The “human channel” in terms of frontline banking staff will also need to become increasingly service-oriented, and access to social CRM will facilitate this process.”

The future may well be social, but that’s not where the story ends. Far from it. Bringing systems and processes together and changing mindsets and cultures in order to make this a reality will be no easy task. With increasingly savvy customers expecting their financial services providers to be on the ball when it comes to Twitter, Facebook et al, it remains a challenge that many will take up.

As Rapide’s Shanahan puts it: “If delicately done it can be advantageous.” Although he also adds: “While social media can be an important insight into what customers are thinking, for banks it is just one of many sources. There are many other ways to gain feedback that many institutions are not yet even fully exploiting. As Martin Hill Wilson from Brainfood Consulting says, if you don’t get these direct channels right first and you plunge into social media you are likely to just channel people into a more public environment. Traditional VOC channels such as SMS, IVR and email should be fully utilised in the first instance to allow customers to have that direct uninfluenced conversation with their banks at key moments of truth along the customer journey. For example, invite them to give their feedback as soon as they have completed a mortgage application or had an interaction with a call centre. Ask for their feedback straight away so they don’t need to get on social media and rant about it to their hundreds of friends or followers.”

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