KQ Article

We all know it’s a time of uncertainty in banking. And we all know that what the industry needs most is clarity.
We need answers, transparency and protection — three attributes that both banking professionals and everyday people assumed were part of the financial equation only to later discover, quite painfully, that “business as usual” was anything but.

Consider this critical convergence: Sweeping financial reform is happening simultaneously with one of the greatest revolutions in information and communication in our history, social media. Social media is democratizing knowledge, connecting nearly one billion people worldwide.

Combined with the connectedness, speed and reach of social media, financial reform has the potential to radically change the nature of consumer banking. It can unite consumers around a common understanding and renewed confidence in banking.

Change is in the air, but leadership, direction, and answers remain ethereal. Their presence is imminent, but it has yet to take shape. A grand stage has arisen in the form of PCs, tablets and smartphones. The spotlight is cast. The audience is seated. Who will step up? Who will take this opportunity to lead? Will it be you? Or your closest competitor?

Why social media?
Let’s first take a look at what leadership might actually look like. First of all, no matter what happens with regulatory reform, financial institutions still need to compete for the attention, support and investment of consumers and business owners. What’s at stake goes well beyond capital, however.  At the center of everything is trust. Financial institutions who earn customers’ trust will also earn their business and loyalty,
along with — and this is key — the business and loyalty of those to whom customers are connected.

Social media is the key to unlocking consumer relationships that reflect the bygone days of customer appreciation. Now, in a time when service is more critical than ever, these values can reignite customer engagement and fuel a new economy. Everything begins with the desire to engage. The next step is packaging regulatory transformation with useful guidance and brutal transparency. From there, creating an authoritative presence in relevant social networks will provide a hub for connectivity and education.

Whether or not your institution already has a social media presence, you need to think beyond “likes” on Facebook and followers on Twitter. Earning a position of authority requires you to demonstrate unquestionable and relentless expertise. How do you do this?

When it comes to social media, consumers have already spoken. They want tangible value. If you reinforce your social networking with an insight-rich corporate blog, you will be on your way to a new era of community building. It’s one that moves from one-to-many broadcasting to a human-powered, one-toone- to-many network that far, far exceeds the capabilities of traditional media or word of mouth.

Reframing regulatory reform
Regulation is not designed to restrict customer relationships. It is designed to protect and inform customers and guide your efforts to engage them. Social media is critical to this engagement. Yet if you talk to a lawyer, you might come away with serious concerns about using new media as a bridge to building trust. In the face of new regulation, legal teams must learn how to embrace social media rather than dismiss or refute it. Doing so places you on a path to obscurity. Businesses that accept new media and transparency (within the law) will find customer solace and appreciation.

Here’s why: Customers are entitled to truth. Instead of working against progress, we need to find ways to work within existing frameworks to serve customer needs. We are, after all, in the service business. And while the industry at large is risk averse, it is precisely this aversion that can lead to digital Darwinism, making your financial institution irrelevant to an increasingly sophisticated and connected customer.

Your challenge is to take mundane regulatory information and inject meaning into it as you inform customers, helping them learn about their options and make better decisions. To make this happen, staff must be empowered and trained to embrace new regulations and share critical updates and relevant insights with existing and prospective customers.

Social media is perfect for this. Connecting with customers in social networks and providing useful information — instead of the usual marketing messages — will drive profitability. Why? Because customers want to know how financial reform affects them.  They want to know you value their business and that your values align with their own. Social media is important because it represents the present and the future of personal connections, data dissemination and consumption of valuable information. It is the epicenter of finding and sharing.  Whether we like social media or not, it is how people communicate with one another. It is also how customers expect to connect with the businesses that  are important to them.

This is the time for leaders to lead — or step aside to let a new generation take the wheel. We are entering a new era of open leadership, one where information and engagement become competitive advantages — while traditional marketing becomes a commodity.

As your customer or member, I don’t want a free t-shirt or a stuffed animal. I would just like to know that my life’s work is your top priority.

_{© 2010 Brian Solis}