“Did I just Tweet my account number?”

“Did I just Tweet my account number?”

As if financial institutions don’t already have enough to do to keep up with developments in social media! They must clearly outline company policy to employees concerning what should and should not be posted, inform agents of the regulatory do’s and don’ts, and continually scan the internet to respond to comments about their brand. Now, it is clear that they must also guide customers about the appropriate and inappropriate use of social networking when dealing with fiduciary transactions.

As usage grows, requests to employ social tools as the main communication tool between customers and their financial providers will also increase. For example, Bank of America now offers a Twitter feed to their customers as a first point of contact. Customers tweet their inquiries, complaints, solutions, etc. and these are transferred to the BOA customer resolution system at a call center. A customer service professional asked me about this recently, “How does the bank prevent customers from tweeting their account number?” My reply? “They can’t.” Last week, I was speaking with one of the largest disability insurers in the U.S. and found that their claimants are asking them to track their recovery on Facebook. To paraphrase the question received from a client: “I am keeping my family and friends updated on my progress by posting on Facebook. Can’t you just follow along?”

These are only two data points, but I suspect there are many more. Customers need their awareness raised about what information should be protected when communicating with a bank or insurer. These institutions have been dealing with privacy and confidentiality protection for decades, but usually in a context where the conversation is more controlled and private. With the broadening use of social networking for operational processes, companies must explain and remind their customers of the sensitivity of data.

I took a look at the Facebook walls of ten U.S. financial institutions and noted that there was no mention of do’s and don’ts or reminders to safeguard information on these front pages. There were plenty of contests I could enter, and a few postings on positive service experiences, but no tips on how to keep financial data safe. There were mentions of confidentiality and privacy on some Info and Guideline pages, but these are the domains of attorneys and dedicated research analysts – not likely where John/Jane Q. Customer is going be.

As social sites become more “operational” in nature, highlighting this issue in high profile places such as the main wall will be necessary, but not sufficient to protect customers from themselves. Look for leading companies to aggressively coach their customers and prospects on how best to use social tools when posting/tweeting/blogging on the same valuable real estate that they now reserve for marketing messages.

(Thanks to Jacob Jegher, Senior Analyst, Celent Banking Team, for an assist on this post.)

BMO Adds “Compare your Spending” to MoneyLogic PFM

BMO Adds “Compare your Spending” to MoneyLogic PFM
There has been some serious PFM activity taking place in the Canadian market. – May 31, 2010: RBC announces its myFinanceTracker solution (see blog entry here) – Dec 3, 2010: Mint.com officially launches in Canada – January 31, 2011: BMO announces MoneyLogic Given that there are only a handful of major financial institutions in Canada, it’s only a matter of time before the others ante up. Additionally, these competitive activities foster innovation and the expansion of feature sets. Lo and behold these feature sets continue to grow as BMO has rolled out a compare your spending tool. Those of you that have spoken to me about PFM know that I don’t rank community features very high up on my PFM and online banking prioritization list (see Bundle.com Requires a Better Bundle). However, it’s great to see a large financial institution embrace the concept of community and open up the data coffers with the intention of providing insightful information. The social features are a draw for consumers because it’s always interesting to know how you stack up. There are a couple of caveats to keep in mind with regards to social and community features:
  • Consumers shouldn’t make financial and budgeting decisions based on the actions of others. I don’t believe that folks should model their spending habits according to others for one simple reason – most people don’t have good spending or budgeting habits. Everyone needs their own custom-made plan and the good news is that banks are in a position to help consumers build this plan.
  • Adoption is critical. The quality of the information displayed by a comparison tool will depend on multiple factors and one of these factors is critical – adoption. In order for relevant info to be displayed folks have to use the tool. The more data points thrown into the pie the better.

BMO is in a position to take advantage of this tool. They have an entry point to provide financial education to their clients. However they have to ensure that it is properly positioned and pitched within online banking and other channels. Additionally, BMO is large enough that with decent adoption of MoneyLogic, they can collect enough data points and provide relevant info to their customers.

Stay tuned for an upcoming report on PFM that will have a section in it that addresses social and community features.

Social Networks Are Not Secure!

Social Networks Are Not Secure!
I just returned from the RSA Conference in San Francisco. The turnout was quite strong and its encouraging to see the emphasis being placed on security and anti-fraud measures. I attended an interesting session on the security risks presented by social networking sites (e.g. Facebook, Twitter, etc.). Although the presentation was quite basic, it got me thinking about the risks that banks (and their customers) face when they start dabbling with social networking: Fake Sites and Social Engineering. Many banks have decided that they would like to have a presence on Facebook or Twitter. What they often don’t realize is that there may be a few fraudsters out there (or money hungry brand squatters) who will register usernames that contain Bank XYZ’s brand. They may actually call themselves Bank XYZ or they may select a derivative such as BankXYZ_Page. They then have the ability to do one of 2 things:
  • Pretend they are Bank XYZ in order to steal customer information and credentials. I can see this happening on Twitter where a fraudster could setup a fake customer service page. Or a phishing site that looks just like Twitter or Facebook. When a customer makes contact the fraudster could attempt to ask for username/passwords, social insurance numbers, birthdays, addresses – you get the picture. Twitter can be a great tool for banks (see my post on What Banks Can Do With Twitter), but it can also present great danger to unsuspecting customers. This is where customer education comes in. It needs to extend to the risks posed by social networking sites.
  • Sell the handle back to the bank. A squatter may just want Bank XYZ to buy the username they grabbed from them. This is not a new practice – we saw this occur in the early days of the web when domain names were being squatted. This is now moving on to social networking sites. Banks should reserve their brands on Twitter and Facebook (even if they don’t want to use them) and keep on the lookout for fake pages.
Compliance Issues. I wonder how many bank compliance departments are actually aware that their institution has a Twitter page. How is the bank logging interactions on Twitter (they probably aren’t)? What can banks disclose on Twitter and what issues can they address with customers without veering from bank policies? These are all issues that need to be explored. My recommendation is to redirect and reply to questions that come up on Twitter via other mediums such as email or phone. Banks are entering uncharted waters when it comes to social networking. It’s important to get out there, just make sure to proceed with caution and keep educating customers about the risks presented online.

What Banks Can do With Twitter

What Banks Can do With Twitter
I seem to be hearing a lot about Twitter these days. Maybe it’s because I cover Web 2.0 and social media at Celent. Or maybe Twitter is just getting a lot of press/media coverage. It’s probably a bit of both. For those who are in the dark, Twitter is a tremendously popular micro blogging site. On Twitter, one can send out “tweets” which are basically short status updates. These updates are available for other users to see and appear in the feed of those who are your “followers.” Updates can be about anything – a link to an interesting article you read, linking people to your blog, updating people about an event or city you will be visiting, or just announcing what you had for dinner. Let’s face it – posts on Twitter can either be helpful or horribly useless to both the sender and receivers. It’s important for Twitter users to understand how they can tweet productively. Now for the interesting part – Twitter can be used for much more than personal use. Corporations, senior executives, marketers, etc. can use Twitter as a channel to stay in contact with customers, prospects and the general public. Banks are no exception and many are out in full force on Twitter. What should banks be doing on Twitter?
  • Marketing. New product announcements, press releases, events should be promoted on Twitter.
  • Building and solidifying relationships. Twitter can have a more personal feel to it, particularly if messages are exchanged. Customers value individualized attention and appreciate having their questions answered.
  • Solving customer service issues. Why not provide a way for customers to reach out to you? Twitter is another channel that can be used by customers to message someone at their bank. It’s certainly not going to take over for the good old telephone, but it is a quick way (if the bank uses it in a timely manner) to assist customers.
What are banks doing on Twitter (a few examples)?
  • Ask_WellsFargo – A Wells employee answering questions about products and dealing with customer service issues
  • chasebank – Occasional product promotion
  • 1stMarinerBank – A bit of everything. Even smaller banks are using Twitter!
  • Wachovia – Customer service, links to Wachovia blog posts, (2420 followers as of the time of this post!)
  • INGDIRECT – Tips, customer service, links to articles. Often refer issues to their customer support telephone line
  • BofA_help – Customer support
Others are developing strategies (WellsFargo is a good example). They have reserved their name so that squatters don’t grab it but are still trying to figure out how they want to use Twitter. I am not suggesting that Twitter take over for other channels. In fact banks should have support on their primary channels down-pat prior to embarking on experimental adventures. Twitter is a great way to communicate as long as it is used properly and in conjunction with other channels. Analysts can use Twitter too! On a side note, I have recently joined Twitter and plan to use it to broadcast what I am working on, what conferences I will be at, etc. If you would like to follow me on Twitter you can find me at jjegher.

PFM Meets Social Networking?

PFM Meets Social Networking?
There was an interesting article this morning in American Banker called, “E-Banking, Meet Social Networking.” After reading the article I came up with 2 conclusions: – Banks need to improve their personal financial management offerings (PFM). The article talks about how Geezeo is offering a white label version of its PFM software to banks. While many banks have PFM tools that they make available to their customers, they pale in comparison to those offered by non-banks in this space (e.g. Mint.com, Wesabe, Geezeo). I would like to see a few banks come up with more competitive offerings (either on their own, or using a 3rd party). Customers really value these tools and they are being demanded, particularly in tough economic times when folks carefully track their spending. – Social networking can be an interesting component of PFM but is not an absolute requirement. This is a nice to have feature, but not one that will keep customers coming back, particularly in the short term. Basic community features would be nice, or at least some spending stats from the overall user base. However, I see customers gravitating more towards the functional component of PFM as opposed to the social networking aspect. In fact, some banks may be scared off if they have to deploy PFM and social networking features in one swift motion. Banks will want to have the option of choosing the features they want to turn on or off.