In "Star Trek," every student at Starfleet Academy must take the Kobayashi Maru test, a no-win scenario designed to evaluate how they react under pressure. Banks have their own version of this test: social media.
In a time of crisis, banks are challenged to communicate to irate and frustrated customers over Twitter, Facebook and blogs. And in most cases, the banks don't win — customers, like enraged Klingons, grow more hostile with each unsatisfying tweet they see.
PNC Financial Services Group Inc. faced this issue last week, when it suffered a partial website outage for some customers of its Virtual Wallet account. PNC posted a message on Twitter warning customers of slowness on its website, and a reporter asked over Twitter for the cause of the problems.
In a public reply over Twitter, PNC said the slowness was due to "reported online banking delays," an answer that did not sit well with at least one of its other Twitter followers.
"Well that's a nice non-answer... and a tautology," Twitter user @maco_nix wrote. "'Why's it slow?' 'It's slow because it's slow' *headdesk*"
From PNC's perspective, its customers' frustration with its response may have been unavoidable.
"As a heavily regulated business, I'm sure you can understand that we are very careful about what we say," said Fred Solomon, a PNC spokesman, in a phone interview after PNC resolved its website issues.
PNC "is very attuned to risk management," he says. "I understand that the culture of social media is very fast, but banks are very careful."
Over Twitter, PNC acknowledged the problem and apologized for it, but the bank said little else. Even over the phone, call center representatives were not giving out details such as the cause of the outage, the specifics of what was affected and the estimated time of resolution, Solomon said.
It doesn't have to be this way, says Citigroup Inc.'s social media guru, Frank Eliason.
"I don't think these things are regulatory concerns," he says. "The walls are not going to come crashing down because you talked about an outage."
Citi had to deal with the same issue in early February, and during its online banking outage it provided an estimate for when service would be restored.
"You have to be able to tell them what's going on as best as you can," Eliason says. "You have to do it in a way that provides enough detail … in this new world order."
Citi hired Eliason, who previously worked for Comcast Corp., in August 2010. By January 2011, Citi hired two social media lawyers. The lawyers help Citi provide immediate responses to outages and other crises.
"It used to be a lengthy approval process for a lot of the service-type tweets," Eliason says. Today, Citi has a playbook that it refers to in any situation. If its answer is not in the playbook, a bank employee can call one of the social media lawyers and get an approval within minutes, he says. After each crisis, his team's members compare notes and try to learn from their experience.
Despite the appetite customers have for clear answers, "you don't always have to be right or precise," Eliason says. It's more important to be authentic and responsive. If an outage lasts longer than the bank projected, consumers are happier if they are kept updated instead of kept in the dark, he says.
Social media is also a two-way street. Banks can adjust their responses based on the volume of the discussion they see on Twitter, Facebook, YouTube and other websites. If very few people are complaining about a problem, the bank can respond to them individually.
If the bank errs too much on the side of disclosure, and broadcasts constant updates about issues that only one or two customers have even noticed, "you're yelling 'Fire,' and there's no real fire," Eliason says.
How other banks responded to crises, such as Toronto-Dominion Bank's 2009 system shutdown following its acquisition of Commerce Bancorp and the later website outages suffered by Bank of America Corp. and JPMorgan Chase & Co., drew both praise and criticism from observers. The banks were bold in using social media to communicate to customers, but their messages were sometimes vague and repetitive, experts said.
"To me, transparency is not a regulatory issue. It's a cultural question," says Mark Schwanhausser, a senior analyst for Javelin Strategy and Research of Pleasanton, Calif.
Banks "look at social media with anxiety because … by definition, it's uncontrollable," he says.
Banks' efforts to impose their own rules on the Web have lead to confusion, he says. In a report published in December, Javelin found that banks that had multiple social media accounts were the most unresponsive during times of crisis, largely because customers were unsure where to direct their questions.
If customers sent a question to an account set up for news, rather than one set up for customer service, they greatly reduced their chance of getting a response from the bank.
Citi and Bank of America, which each has at least four Twitter accounts, did not respond to any misdirected tweets during Javelin's test. Wells Fargo & Co., which has four accounts, responded to just 21% of misdirected tweets.
If banks appear unresponsive on social media, "people who were patting you on the back for being a pioneer … are now clubbing you because you have now let them down," Schwanhausser says.
Customers will not wait patiently for banks to notice their complaints on social media. If the bank is silent, other customers will take their place in the conversation.
"That's the thing that banks don't expect out of social media … bank customers will drive conversations among themselves," says Nicole Sturgill, a research director at TowerGroup.
"If [banks] can provide any level of detail, they need to be able to say that," she says.