Balancing risk and reward in social media

Surrounded by non-stop change and evolution, a state of normalcy no longer exists for credit unions. The financial services industry is transforming with the help of more than 12,000 global fintech startups as well as banking initiatives from digital giants such as GAFA (the Big Four: Google, Apple, Facebook and Amazon). Competition is more fierce than ever.

Recent innovations from digital giants are raising even more red flags for credit unions. According to a recent study by consulting firm cg42, one in four consumers would be willing to bank with Amazon. Consumers were also generally receptive to the idea of banking with other Silicon Valley giants including Apple, Google and Facebook. The study also found that 43 percent of millennials would put their greatest trust in organizations other than banks and credit unions, which increases the threat to local credit unions.

We’ve moved from marketing for attention to marketing for relationships. A billboard used to catch attention and attract members – the more money you had, the more billboards you could lease and the better you did. This way of marketing quickly became tiring for members and is no longer effective.

Members now want a relationship with the brand. They want to feel heard and cared for. The problem is that marketers plan for attention-seeking because it’s how systems and metrics are designed. Social media wasn’t created for attention – though that has changed in order to monetize – but rather for relationships and connections.

Social media presents a big opportunity for credit unions. Due to the size and inherent cold façade of the megabanks, they are unlikely to make time to build one-on-one relationships. Credit unions can. Their smaller market and ties to the community make this much easier.

1. Why social media matters to CUs

Credit unions should use social media to level the playing field with their competitors. Having a digital presence helps you resonate with your community and engage existing and potential members. Banking leaders already know this to be true. In fact, 90 percent recognize that social media has the potential to bring “good” or “excellent” value to their institution, according to a Kasasa client survey pool.

Social media offers a unique opportunity for credit unions to interact with their audience on a personal and professional level. You can post about giving back to the community, host contests or sweepstakes, respond to questions and even resolve complaints. Additionally, social media and website analytics enable you to learn about your members’ and potential members’ interests, and find better ways to engage with them, which in turn can boost your profitability.

2. The risk

We paint risk as “What happens if I’m on social?” but what is more dangerous is not being on social. Social media sites run on data; it’s their primary product. Platforms will attempt to pull as much data from brands as possible, even if it is slightly inaccurate or incomplete. If a platform finds that you have a branch, they can make an “unofficial listing” for your brand. Members don’t know this and might comment or message for support.

Likewise, consider that one of your employees could make a comment on social media that creates risk. Without a profile and listening strategy, you might not even know it is out there. Choosing to pretend there is no risk doesn’t solve anything. It’s comparable to avoiding the doctor because you’re afraid of what you might find out. The rational choice is to address the problem as early as possible.

3. The solution

Creating a social media risk assessment is the most important step to ensure you’re effectively prepared for a crisis, should one occur. A social media risk assessment outlines a list of threats your credit union faces, the vulnerabilities they exploit, the systems you have in place to address those vulnerabilities, a measurement of the likelihood of the risk occurring and the potential severity of the threat's impact.

A social media risk assessment is critical, but it’s even more important to revisit the assessment on a regular basis. A few years ago, credit unions may not have been concerned about Instagram as a social media channel and left it out of their risk assessment. Today, the channel has 800 million monthly users and is ranked as the most influential social media platform for millennials and Gen Z. Things change quickly – be sure to update your credit union’s risk assessment once a year, at the minimum, and any time a crisis arises.

You can also minimize vulnerabilities by setting guidelines for employees. Restricting web access and monitoring work devices is one way but implementing a social media risk program for employees is much more effective. It‘s important to publish an employee code of conduct and have each of your employees read and acknowledge a social media policy. Each year, employees should attend digital security training on your most popular social media networks to learn about potential threats and how to avoid them.

Credit unions can’t afford to ignore the increasing threat from fintechs and digital giants. To grow market share in a dynamic industry, you must place a stronger emphasis on your social media strategy to attract and retain members. At some point, all credit unions will likely experience a social media crisis, whether big or small. Fortunately, you are now equipped with the information needed to come out on the other side, hopefully scratch-free. By creating a social media risk assessment and educating employees, you can lessen the risk associated and better navigate crises. For credit unions, it’s clear that the rewards of a strong social media presence greatly outweigh the risks.