From early days, Brazilian banks leveraged social media to communicate a wide range of ‘brand building’ messages to promote their sustainability actions, charity programs, hiring opportunities and new service offerings.
But Brazilian clients saw social networks somewhat differently. They recognized the power of social media to motivate their banks to provide faster, more responsive customer service. Before long, banking customers were not just tweeting about their complaints with banks, they were posting photos and videos too, creating a much larger impact and capturing the imagination of friends and the general public.
As a result, most Brazilian banks now view social media as a significant risk and – in response – many have created departments dedicated to monitoring and responding to social media conversations. But while there has been much activity in this area, Brazil’s banks seem to still be divided on just how to respond to negative comments posted on social networks; some re-route clients through to appropriate customer care channels, while others try to engage directly over phone, email or social media (though, in part, this may be a ploy to reduce the amount of ‘paperwork’ that comes with following the official customer complaint process).
However, there is still a small yet significant group of banks that have yet to develop their responsive media strategy. These banks face the biggest risk of all. It takes a matter of minutes for a customer complaint to become a ‘top trending’ issue on Twitter or to go viral on Orkut (a popular social networking site in Brazil). Banks simply do not have the time to mount an effective response within the timelines that social media demands, so any banks that have not prepared a strategy to deal with emerging issues in a fast and effective way will – almost certainly – find themselves drawing unnecessary criticism from their customers.
Brazil’s banks are also starting to sharpen their focus on security. In some cases, cyber criminals have been targeting customers with ‘phishing’ attacks based on their interaction with banks over social media. Criminals are also starting to leverage the wealth of public information available on many people’s social media profiles to ‘engineer’ passwords or provide positive identifications during call centre requests (common security questions include names of first pets, primary school teachers, or mother’s maiden names, all of which can easily be harvested from public profiles).
Interestingly, a number of Brazilian banks have started to recognize that security and privacy can be a double-edged sword. On the one hand, managing the reams of data and multiple channels will stretch the bank’s security processes to the brink. But on the other, a strong security and privacy record can easily become a point of differentiation for banks.
So while Brazil’s banks seem to be taking a somewhat cautious approach to social media at this time, the country’s rapid consumer adoption of the technology points to significant changes on the horizon for banks in the near future.
By Frank Meylan, Head of IT Advisory, KPMG Brazil
||Gareth Jones Crisis management over social media is a critically important topic for banks. One only need look at the social media backlash against US banks considering rate increases last year or – outside of the industry – the 800,000 people who joined together on the Boycott BP Facebook site after the Deepwater Horizon disaster to recognize that social media use during a crisis requires deliberate planning and deep consideration in order to gain the speed of process required to minimize and mitigate brand damage.|
||Stephen Bonner Brazil’s experience with phishing and hacking attacks enabled by social is shared by banks around the world. Hackers are becoming increasingly persistent and sophisticated and – as a result – so too must the security measures of banks. Frank’s point about the potential competitive advantage of strong security protocols is keen: those banks that fall victim to attack will lose the trust of their customers, and those that are able to demonstrate better, user-friendly measures will benefit from their competitors’ loss.|
||John Hair Banks should also be prepared for regulators to take a stand in mandating basic security requirements for customer data. Already, we are seeing existing regulation related to security and privacy being adapted to social media and this trend is set to continue. Banks will therefore want to get out ahead of the regulators and pay close attention to the trends already underway around the world.|
||Daniel Knoll While banks have every reason to be trepid about the power of social media during a crisis, there are also a significant number of cases where companies have used the new medium to dull the impact of a crisis. That’s because social media can be a much more targeted, responsive and transparent communication channel than most others, meaning that banks must plan how they might use social media in a crisis long before the event actually hits.|