Rob Garcia, senior director, product strategy at social lending community Lending Club, posted a blog today that sharply criticizes banks' social media efforts. Although the blog is self-serving and self-righteous, a review of his points could be instructive; as Winston Churchill said, "Criticism may not be agreeable, but it is necessary. It fulfills the same function as pain in the human body. It calls attention to an unhealthy state of things."
Garcia cites a study that shows 46.4% of banks are on Facebook, 34.6% are on Twitter, and 18% of them have an active blog.
However, Garcia says, "The main problem with most social media initiatives taken by big banks is that they lack the long term support from upper management while trying to accomplish too much." The first three specific mistakes banks make, according to Garcia (these are paraphrased): their social media content is too boring; their websites are too ugly; and they don't market their blogs.
"One of my favorite bank blogs is INGDirect's We The Savers, packed with fantastic content aimed at helping account holders to build up their savings," Garcia writes. "However, all that fantastic content goes mostly unread: INGDirect has failed to cultivate followers and traffic, with a paltry 2k average monthly visitors out of the nearly 2.5 million unique visitors they get on their main banking site." On the other hand, Garcia notes Chase's Facebook Community Giving charity campaign, "that was backed up by a formidable PR and communications plan that helped them get more than 2.5 million people to follow them on Facebook."
The other mistakes banks make, in Garcia's view: they lack a strategy for answering customers' questions on social media sites; they're too slow to respond to customers' suggestions; they don't understand community engagement because employees are too old; and they're not innovative enough.
"When was the last time banks introduced some game-changing technology or innovative product?" Garcia asks. "Many people argue the ATM is probably the last significant innovation from banks... and that was in 1969! Companies like Mint, LendingClub, SmartyPig, and CreditKarma are all very innovative takes on traditional financial products. Stock-picking communities, person-to-person lending, personal finance management and even credit score management tools have emerged to serve the changing needs of customers exclusively served by traditional banks."