Defending Your Brand

0 comment(s)

I recently read an interesting article on AmericanBanker.com entitled, Defending Your Brand 2.0: Rapping w/readers, 140 characters at a time, by Sara Lepro. In her article, Sara demonstrates the need for financial institutions to insert themselves into social media conversations in order to have more control over the ‘chatter’ and ultimately to protect and defend their brand.

Historically, banks have been concerned about negative customer experiences and the impact of customer churn, especially when it comes to customers becoming victims of fraud. With the evolution of Facebook, Twitter and other social media forums, negative feedback is not only accelerated but many times exaggerated, thereby making it more of a challenge for banks to protect their brand.

So, now that consumers are armed with the social media as their weapon of choice for voicing complaints, banks must be diligent about their customer service efforts in all areas of their business, including fraud monitoring and alerting. I’d argue that fraud monitoring is especially important, given that 24% of young adults and 17% of all consumers leave their banks after experiencing fraud with that institution, according to Javelin Strategy & Research. That’s a pretty high churn rate.

I agree with the author of the article for encouraging the use of Twitter to participate actively in online consumer conversations. It makes sense. However, I would recommend that FIs take all steps possible to make sure the customer never has a reason to voice their displeasure. Social media makes it more likely that positive and negative news will get out. I believe it’s important to treat the source of the problem!

I see two main avenues available to FIs for reducing fraud. First, with the growth in technology and superior fraud solutions available to banks, now is the time for banks to step up and add layered security to protect their consumers…and ultimately protect their brand. Additionally, FIs should look to use social media tools to create a dialogue with customers about the needs for security and to promote education. Social media isn’t about just defending your brand; it also allows FIs to be proactive. In combination, this could help eliminate a good deal of fraud.

Conversations over social media channels travel at the speed of light, and one piece of negative communication can have severe ramifications for a major brand. I say stop these at the source. In terms of fraud that means investing in better prevention. On the flipside, positive feedback and timely educational information to customers can affect perceptions for the better and have an impact on customer retention and loyalty.

 

Posted in: ACH and Wire Fraud Account Takeover Identity Theft Check Fraud Debit Card Fraud Deposit Account Fraud New Account Fraud Internal Fraud Credit Card Fraud