For many banks, social media represents an innovative and cost-effective channel for ‘pushing’ out marketing messages and promoting their brands. A tell-tale sign is banks whose social media strategy is being led by Sales and Marketing, rather than Customer Service or Experience professionals.

At RBS, we see social media as much more than a simple marketing tool. It is also an unprecedented opportunity to listen to our customers, improve our service and rebuild trust.

Getting the whole picture

Take complaint handling for example. Anyone that has worked in customer service knows that only a fraction of customer complaints travel through official channels. Customers are, overall, much more likely to tell their friends about substandard service than their bank manager or corporate help line. But with the advent of social media, suddenly banks are able to listen in on their customers’ public conversations, identify complaints and – where appropriate – make contact in an effort to resolve the issue.

And that is where the revolution starts: instead of waiting for customers to become irate enough to lodge a complaint, banks now have the opportunity to actively seek out dissatisfied customers and resolve their issues before they turn into full-blown complaints.

The death of customer complaints?

But this is only the first step in transforming the customer service delivery model for banks. The next evolution comes from leveraging the information from social media to anticipate and mitigate future complaints.

Say, for example, that over the course of a few weeks we were to see multiple tweets from customers saying they are standing in line at one of our branches, we could quickly move to flag the potential problem to the branch manager and re-examine the resourcing at that branch to speed up customer service and enhance overall satisfaction.

Of course, talking isn’t always bad either; social media also offers customer service representatives a fast and effective way to alert customers to potential issues such as service disruptions. And by getting ahead of the issue, banks will not only stem the flood of calls to the call centre, but can also rebuild much needed trust with their customers.

In other words, social media provides an incredibly rich channel that allows banks to anticipate customer service problems before they arise rather than just reacting to them after they happen.

Crowd-sourcing service improvements

At RBS, we are adopting the same principles to solicit service improvement suggestions from our customers. Through a recently developed website, we are effectively converting our customers into advisors by providing a more interactive forum where they can not only submit suggestions but also see how their ideas are being progressed and incorporated into our business strategy. The network can also be used to test ideas and essentially ‘crowd-source’ new service models and offerings.

At the end of the day, social media will not only enable customer service managers to deal more efficiently and effectively with clients, it will also allow customers to play a significant role in the way the bank develops services. And given that customer service is at the heart of RBS’s value proposition, I suspect it is fair to say that our social media journey is just beginning.

By Tim Oakes, Senior Manager, Service, Analysis & Reporting, Royal Bank of Scotland.

Andrew Dickinson (KPMG in Australia): Social media will require banks to evolve the way they approach their communications and reorganize their internal systems and processes to respond to the shifting demands of their customers.

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Marty Carroll (KPMG in the UK): RBS’s approach to using social media for customer complaints offers many potential opportunities for enhancing banks’ customer service proposition. As Tim rightly notes, the next level of customer service involves using social channels to anticipate customer needs and concerns, and then using the same channels (as part of a multi-channel approach) to realign services to eliminate sources of discontent. Customer service leads and banks will need to amplify their voice at the executive level to ensure that their value is being properly harnessed.

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James McKeogh (KPMG in China): Privacy will also be a key concern for banks in this regard. Some customers will indeed be expecting their banks to respond to their online gripes and complaints, but others may find the response to be intrusive into their (seemingly private) conversation with their friends. Setting the right expectations and knowing when and how to respond will be an important consideration for banks’ customer service teams.

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Sanjaya Krishna (KPMG in the US): One of the biggest debates for customer service professionals is whether social media is the right avenue for responding to complaints, or whether the medium should rather be used to redirect dissatisfied customers to the traditional channels of call centers and branches. Responding online carries a significant risk as irate customers are sometimes inconsolable and may use the public conversation as an opportunity to lash out. That said, those that are able to appropriately respond on social networks can quickly prove their transparency and willingness to engage.

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Gareth Jones (KPMG in the UK): Of course, bank management must also consider how social media can be used (even hijacked) by people who want to damage the brand and influence other users or stakeholders. Already, we have seen alleged instances of competitors filling their peers social networking pages with fake complaints and rumors that – once out in the open – are difficult for banks to mitigate. For their part, we have also seen damaging reputational results for organizations who have – incognito – entered the social media domain to post counterarguments.

The views and opinions expressed herein are those of the authors and do not necessarily represent the views and opinions of KPMG International or any KPMG member firm.