Social Media and Reputational Risks

New ICBA Tool Streamlines Social Media Management
Financial institutions, especially community banks, need to know what's being said about them on the Web, whether through social networking sites, blogs or the competition. A new social-media management tool provided by the Independent Community Bankers of America aims to help community banks monitor those communications, streamlining posts and comments that appear about banks on and through a number of channels.

"This means that a bank has to maintain and make sure that it's clean, make sure that the signs are well-lit and make sure if there is any bad press about them," says Chris Lorence, who oversaw the launch of the new ICBA tool, in an interview with's Tracy Kitten [transcript below].

The social media monitor tool was released on Aug. 10; 366 banks have already signed to use the service.

Social media isn't going away any time soon, Lorence says. With people, young and old, flocking to the Internet, there is a greater opportunity to provide feedback and comment about experiences, be it at a restaurant or a community bank. "People can possibly damage your brand if you're not monitoring it," Lorence says.

During this interview, Lorence discusses:

  • The emerging role social media plays in reputational control;
  • Why institutions should actively monitor what's posted about them on the Web;
  • How the ICBA is working with community banks to help them beef up their social media strategies.

Lorence is the executive vice president and chief marketing officer of the ICBA, which is based in Washington, D.C., where he oversees marketing and communications for the association. As a member of the ICBA's senior executive team, Lorence works with management and staff to create strategic vision and initiatives. Before joining the ICBA, Lorence served as chief operating officer of a community based financial organization and has more than 15 years of senior management experience within the financial community.

Social Media Management Tool

TRACY KITTEN: When did the ICBA release the tool and exactly what does the tool offer?

CHRIS LORENCE: We released on Aug. 10 with an anticipation that we would have a very low draw from the community banks, but we've been overwhelmed with great sign-ups. The product basically scans all social media outlets on the Internet, a little over 7 million posts and mentions a day, either from news sites, blogs, forums, Twitter, Facebook etc. and looks for the criteria that we log in. Right now we are logging in based on what the banks tell us. We allow them to give us three terms, names or topics to search on for them, and so far there have been things like the bank's name, the president's name or a particular product they have, either a checking account or a kid's club or something like that which they are looking to track and see what is being talked about in the social media realm.

KITTEN: You've kind of answered my next question a little bit and that was basically how the social media monitor works. It sounds like it basically is scanning the web. Is it actually helping institutions with perhaps the social media sites that they have?

LORENCE: What we are finding is our assumption was that there was not a lot of community banks in the social media platform. We're using it ... more [for] marketing ... and we were pleasantly surprised to find out that while they may not have a Facebook page of their own or a Twitter page, most of their staff has their own personal pages. They were familiar with social media and the entire concept of monitoring and the importance of monitoring their bank's brand. They just needed the tool to be able to do it.

Community Banks and Social Media

KITTEN: Why did the ICBA see a need to provide a better way for community banks to manage social networking sites, and that would be managing these posts or responses that come from consumers?

LORENCE: Up until this point community banks as an industry have used social media as either a fad or something that did not relate to their business, which is lending and financial advisory. We all know at this point that social media has become a new platform for communication for everyday citizens regardless of your age. We're making sure that community banks understood the importance of at a minimum listening to what is being said, either about themselves or their competitors. Because it could be a great opportunity for them to find out that a particular competitor of theirs was having issues, that their customers were complaining about long lines or the rates were not so great or their staff was not as friendly, which would be a great opportunity to promote either on social media or in their own regular marketing and advertising that they have great service, or they have shorter lines or they have more branches.

KITTEN: Now you mentioned earlier that the assumption was that many community banks were not actively involved in social media. Now that you've actually launched this tool, that you are looking at it a little bit more closely, do you have a handle on how many community banks are actively using social media to communicate with customers?

LORENCE: Again, it's still new at this point, but we had anticipated about 25 banks to sign up in the first month. We definitely had set our sights because social media is something in our own listening we're not seeing or hearing a lot of community banks for example having Facebook pages, talking about social media or putting their Twitter handle out there. We've been searching for quite a while. In the first week that the product was out we've signed up 366 banks. What we ask as part of the sign-up form is to tell us do you currently have a Facebook page or a Twitter account and what the handle is. We've been pleasantly surprised that about two thirds of them have Facebook and Twitter, both.

KITTEN: Wow, that is impressive, and it's very impressive that you had so many of them sign up in a short period of time. Now one thing that we've talked about is that this tool basically streamlines social media management. But does the tool offer any recommendations as far as security or any other things that might help financial institutions, especially in the community realm, that want to perhaps get more involved in social media?

LORENCE: At this time it does not. It's basically just a reporting tool. We will probably move into the enhancement phase after some time, after some testing and seeing exactly how this is going to work with our banks. The solution that we have does utilize a scoring system, a cloud score, which shows who the influencers are in that particular community. For example, if we have a bank that appears to be very actively talked about in social media, either Twitter, Facebook or some other platform, we would then probably go to the next step some time in the future where we would then allow the bank to learn who the influencers are in there, and who is talking about them in particular and what their cloud score is. But we are trying to take this very step-by-step so that we don't overwhelm our members into learning more about this and perhaps scaring them away from it.

KITTEN: Sure, and we've talked about how critical it is for institutions to stay on top of what's being posted about their businesses on these social networking sites, but I want to ask you about brand loyalty and customer confidence. Of course these are issues that you would definitely want to address in the social media realm, but are there any security or fraud concerns that banks should be mindful of when it comes to the use of social media or the tool generally?

LORENCE: I think community banks or banks in general are in the risk business, and they are naturally suspicious of anything electronic or web-based because of obvious reasons you hear about: viruses, fraud and things like that. In my travels in working with community banks, probably the number-one concern or question that I receive is what if someone becomes a friend on our Facebook page and a perpetrator, a fraudster, gets that person's information or finds out who this person is and creates fraud in our bank, or opens the bank to some sort of security risk by giving us some sort of a virus?

The assurances that I can give at this point are, as it is a web-based product, Facebook, Twitter, any of those are not connected directly to the bank's core systems where information and data is stored. We also hope and cross our fingers that consumers don't put their bank account information in their Facebook page, or their PIN numbers or anything of that nature to open them up to any type of fraud. In all honesty, you are probably going to experience it at some point in some time in life, just like people write their PIN numbers on the back of their debit card and their cards are stolen and somebody cleans out their checking account. There is some accountability that the consumer or the end user has to have and how they treat their information and understand how important it is. But at this point in time, social media is held outside the bank's walls and therefore people are not going to hack into the bank, steal information or steal money as the systems are not connected in any way.

KITTEN: That is a great point that you make. I wanted to ask also about the tool. Does it allow institutions and their employees to track social media posts such as Tweets by a mobile device? Is this something that they can do while they are on the road?

LORENCE: Not at this time. The way that the system works is each day we set up a particular time when we log in the up to three words that we allow our members to give us, and the bank receives an e-mail at 2:00 each day with anything that has been picked up in the last 24 hours about their bank. If the e-mail is able to be read by the mobile device of the employee then the answer would be yes, but the actual platform itself is not. It's not an app so it's not actually activating with somebody's mobile phone or working with someone's iPad or anything like that.

KITTEN: Is that something, perhaps a functionality, that could be added in the future, or do you not see a necessity?

LORENCE: I would hope. The one thing that is very interesting about this platform is that you can choose how often and how frequently you want to be notified. So just like Facebook, you can choose as an end user to say, "I want to be alerted every time somebody posts something on my account or relates to me" or "I want to voluntarily go in and look to see when someone has posted something about me." There are a lot of options. If a particular bank is really big in social media and it has created quite a community that is talking about them and they are engaging with that, I would see where this platform you would want to have more instantaneous information and therefore a mobile app might work for them. But at this time, in this opening stage right now, it's going to be an e-mail every 24 hours.

KITTEN: Before we close, what final thoughts about the new tool would you like to leave our audience with? And you may want to offer some information about how a community bank could sign up.

LORENCE: Probably the biggest thing that we want to make sure our banks understand is social media is something that is not a fad. It's a community of communicators that is sort of age-defiant. It's from children who have cell phones all the way up to grandparents who have access to Facebook and Twitter and are using it to communicate more instantly with other people, and that means providing feedback about their experiences, whether it is at a restaurant or it's your bank. As a bank, you are required as part of your reputational risk requirement for your bank's insurance to monitor what's going on or what's being communicated about your bank outside your walls. This means that a bank has to maintain and make sure that it's clean, make sure that the signs are well-lit and make sure if there is any bad press about them.

Well social media is a new platform where people can possibly damage your brand if you're not monitoring it. What we are advising our member banks at ICBA to do is, rather than start a social media program within your bank and becoming overwhelmed and the signing of a staff person and gearing up to learn how to do this, what you should probably do is visit the ICBA's website which is and check out the service. There is a frequently-asked-questions area for you to review. It's open to ICBA members only and the service actually is able to be purchased. If three words does not work for you and you want to actually do this and go full-stream ahead, you most certainly can and we're able to resell the product to you.

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