Regulators such as the Federal Deposit Insurance Corporation and watchdog organizations such as the Consumer Financial Protection Bureau continue to perform a vital function in protecting the interests of consumers.
But as the world becomes increasingly digitized, the role of social media is expanding to help banks to understand just where they stand with customers and shareholders.
Banks hardly require guidelines and mandates from regulators since every action that a bank now takes – from the introduction of a new product to updated disclosures on credit card agreements – are critiqued in real-time in social media channels by customers, shareholders, and industry pundits, notes Fifth Third Bancorp Chief Executive Kevin Kabat.
“While we embrace our regulatory compliance responsibilities, with respect to all we do, the court of public opinion and market needs drive our decisions to provide attractive and fairly priced products,” he says.
For example, if the Cincinnati-based bank releases a new or updated mobile banking application for iPhones or Android devices in the morning, reviews on Facebook, Twitter, Pinterest, and other social forums will be available for all to see by that afternoon. Pricing and company policy decisions are also vetted, and if customers don’t approve of them, they will publicize their reasons in painstaking detail, Kabat also points out.
“The whole world is watching, and it takes a long time for those comments to fade into obscurity,” he says.
Social comments about banks are pouring in by the bucketful.
ViralHeat, a social media consultant, has collected and compared tens of thousands of social media comments and sentiments shared by US banking customers and categorizes them as positive, neutral, or negative.
While the differences in social sentiment between major banks such as Wells Fargo, Bank of America, Citibank, and Capital One are subtle, Kabat and banking leaders at Fifth Third, PNC Bank, and Keybank may be heartened to know that their respective institutions received the lowest percentages of negative customer sentiment in social media among 11 banks evaluated.
Fortunately for bankers such as Kabat, predictive analytics tools with real-time event processing and data visualization capabilities make it possible to pick up quickly on shifts in customer sentiment, enabling bank leaders to view heat maps of customer sentiment and react swiftly to any positive or negative customer feedback to products, services, policies, events, etc.
Some banks are analyzing customer feedback in social communities to pick up new product ideas.
For example, Barclaycard Ring, the card company’s community-built credit card, includes an internally-run online community where cardholders can pitch new ideas, according to American Banker. Among the recent ideas is to reward cardholders who don’t repeatedly call the company for service.
Banking officials can glean a tremendous amount of insight about customer attitudes and preferences by applying predictive analytics against social sentiment.
In our next post on this topic, we’ll examine how banks can use analytics and data to assess risk and help determine whether they’re meeting regulatory requirements.
- Subscribe to our blog to stay up to date on the latest insights and trends in predictive analytics, data visualization and banking.