A few weeks back I decided it was time to write a blog post on “How Banks Can Best Use LinkedIn.” But then Jeffry Pilcher at TheFinancialBrand.com wrote this great post: 12 Steps Financial Marketers Can Take To Get The Most From Their LinkedIn Page.

Like most things at TheFinancialBrand.com, it was very comprehensive and informative. So there went my post. I guess I’ll just write about Grumpy Cat again.

But then I thought, do banks belong on LinkedIn? I don’t mean that from a simplistic point of view, I meant that from a philosophical stance. Have they earned the right to be involved in social selling? The answer is no…not yet.

As I have more and more conversations with bankers, investment peeps, realtors, and others in consultative sales, I’m convinced that bankers don’t understand the power of LinkedIn. I don’t believe they know what it means to have a holistic brand that is consistent online and offline and that is centered on delivering focused, relevant, buyer-centered content and assistance. That’s what social selling is about. That’s what LinkedIn is about!  

Forgive me if my soapbox is too high, but I’ve been involved with the selling and marketing of banking products for eight years – holy crap? Is that right? I’m not that old!!!! – and it seems as if many, many, many bankers out there like to believe that the Internet was never invented. They seem to think of themselves as keepers and disseminators of information. And by this I mean they tell people about their products and hand out brochures.

They say they “get mobile” but most think of these channels as new methods to disseminate info, not as part of a revolutionary shift in the balance of sales power and processes.

If you want to better understand how much the sales process and environment has changed in the last decade, please read To Sell is Human by Daniel Pink. One of Pink’s main points is the value of content curation within the new sales environment.

If you don’t understand curation, you don’t know the true value of LinkedIn.  And if you don’t curate, you’re missing out on an unmet need in today’s financial customer. Quite frankly, most of you are missing this.   

Your bank must embrace the role of curating financial information in the lives of its customers and prospects before you can fully realize the power of LinkedIn. Until then, you will only be able to establish a presence but never a meaningful impact.

I’ll talk more about this in a future post and upcoming webinar. If you have specific questions (or gripes) please connect with me before then.

About Mark Zmarzly:

Mark Zmarzly is SVP of Financial Services at ACTON Marketing, and an accomplished marketing, business development, banking, and creative professional with demonstrated success solving customer acquisition, marketing, and profitability problems. He has worked with financial institutions from 1 branch up to 1,700+ branches in the areas of marketing, copywriting, account management, consulting, teaching, social media, and business development.

You can find his insights on issues facing the financial industry at http://ihelpbanks.com/ and on Twitter @BankMarketing. You can also connect with him on LinkedIn at http://www.linkedin.com/in/markzmarzly.

“Many of the big banks have made great strides in listening to what their customers are asking for: reducing the number of problems customers encounter and, more importantly, improving satisfaction with fees,” said our own Jim Miller, senior director of banking here at J.D. Power and Associates

 Below are a few highlights from the study:

• Fees have begun to stabilize and banks have helped their customers better understand their fee structures.  Satisfaction in this area has begun to rebound, and is up by 14 points this year from 2012.
• One-third (33%) of customers say they “completely” understand their fee structure, compared with 26 percent in 2012.
• Fees also have been a major source of customer problems and complaints. The stability in fees, coupled with banks placing more emphasis on preventing problems, has lowered the proportion of customers experiencing a problem by 3 percentage points year over year, to 18 percent in 2013.
• While customers appreciate the personal service they receive at their branch, such transactions are slowly declining, while the numbers of online, ATM and mobile banking transactions are increasing.
• As banks roll out envelope-free ATM deposits and deposits by mobile phone, customers are finding it easier to handle routine transactions without needing to visit their branch.

“Successful banks are not pushing customers out of the branch, but rather providing tools that make it easier to conduct their banking business when and where it is convenient for them,” said Miller. “Customers are quickly adopting mobile banking, making it a critical service channel for banks, not just a ‘nice to have’ option.”

While the abundance of interactions that occur in social media provide a unique opportunity for banks to engage with their customers, many are struggling to keep up. Institutions that utilize social media are challenged in many areas:

• Measuring social media efforts within their industry and comparing them across industries
• Identifying whether the right amount and type of social content is being shared with customers
• Learning which best practices are used by the highest performers within their industry and across industries, and identifying how to adapt them
• Tracking social media performance efforts over time
• Demonstrating the value of social media to internal stakeholders

THE SOLUTION

The J.D. Power and Associates 2013 Social Media Benchmark StudySM, publishing late this month, measures the consumer experience in engaging with companies via social media. The study explores consumers’ social media experiences with both marketing and service across 100 US brands in a number of industries including some of the following:

• Retail Banking: Bank of America, Chase, and Citibank

• Credit Card: American Express and Wells Fargo

• Telecommunications: T-Mobile, Verizon, and AT&T

• Airline: American Airlines, Delta Air Lines, and Virgin America

• Automotive: Toyota, Ford, Kia, Dodge, and Mercedes-Benz

• Utilities: Southern California Edison and Duke Energy

Join our J.D. Power research team for a complimentary preview webcast and be among the first to hear the J.D. Power and Associates 2013 Social Media Benchmark StudySM results.

Register now to learn:

• How do retail banking and credit card brands perform in their social media efforts relative to other brands within and across industries?
• What are the biggest challenges holding financial service companies back from better social performance?
• How do top performing companies across industries “do what they do” to deliver customers the best social experience possible?

WEBCAST DETAILS

DATE: Tuesday, January 29, 2013

TIME:  2:00-3:00 pm ET

As announcements go, it wasn’t a very big deal when the British Bankers’ Association said at the end of the year that it is urging its 200 member banks to participate in a broad, two-pronged initiative to boost the industry’s image. Part of the plan is to monitor “people’s concerns before they become massive scandals”—a worthy goal, to be sure. But this wasn’t an isolated symptom of the problem. At around the same time, a Financial Times survey of 93 Members of Parliament revealed that fully two-thirds of the legislators believe British banks should be required to create a stronger barrier between investment banking and what’s known as ‘high-street’ operations. More worryingly, this wasn’t a liberal push for more regulation—the number of Conservative MPs backing the idea is actually higher than their Labour counterparts. There’s already a proposal to create a ‘ringfence’ around retail banking, but the new research indicates that many think the changes don’t go far enough.

That’s really the recurring theme here. If 2012 was a year of major change for banking institutions and individuals around the world, then 2013 will require even more.

A tsunami of bad news throughout the year was capped off by the news late in December of massive fines levied against UBS. The Swiss banking conglomerate ponied up $1.5 billion to global regulators, including $700 million to the Commodity Futures Trading Commission (CFTC) alone, the largest such settlement in the agency’s history. The fines stemmed from the charges of manipulation directed primarily at the bank’s Japanese securities subsidiary, all part of the mushrooming Libor scandal.

Some are even calling for the company to be shut down—an action that would surely cause ripples throughout financial markets worldwide. This brought up unpleasant memories of a similar situation earlier in the year, when HSBC was accused of money laundering and other transgressions. In that case, the company agreed to pay $1.2 billion in restitution, yet calls for more stringent penalties met with strong resistance even from regulators. The reason: more criminal charges could destabilize the global financial system. Moving forward, it should be apparent that regulators, and the public at large, will lose patience with a ‘too-big-to-charge’ environment in which massive institutions are able to avoid serious penalties because of their size and clout.

Continuing with the bad news global tour, Japan got a new Prime Minister around Christmastime, and he promptly sent signals that he will bring pressure on the Bank of Japan to essentially monetize the national debt outright. Whatever the merits of his strategy—which goes beyond any stimulus spending in the U.S.—the feeling is that it goes a long way toward taking away the Bank of Japan’s independence. This is a major story that hasn’t received much attention so far. Expect that to change in 2013.

While these are established institutions, there was also evidence that new players with different business models have a hard time breaking in. TandemMoney was an interesting idea designed to meet the needs of the unbanked and underbanked by providing a line of credit that required customers to sign up for direct deposit. A combination of savings and credit would thereafter deal with unexpected expenses. The company saw itself as an innovative startup that would protect consumers from institutional loan sharks. Instead, it will be seen as a cautionary tale—unable to satisfy regulatory scrutiny, it soon shut its doors.

Despite this seeming litany of bad news, it definitely isn’t all gloom and doom. In fact, the industry as a whole is not exactly suffering—the four largest banks in the U.S., particularly Bank of America, had quite a good year, and according to reports some regional banks did even better. A few greatly outperformed their much larger competitors, and that trend is expected to continue. Cautionary tales aside, nimbleness and innovation are still being rewarded.

Other aspects of change are equally welcome, at least to non-Luddites. For one thing, the move toward mobile banking continues to escalate.

We all know about the trend in developed markets, but it seems to be spreading far beyond those borders. The State Bank of Pakistan just announced that between July and September alone, the number of new mobile banking accounts spiked by an astonishing 25%. The news provides more evidence that in developing nations where the lack of infrastructure is a serious hurdle to economic growth, the building of mobile capabilities allows them to leapfrog traditional foundations and gain a major advantage through the proliferation of mobile technologies. (Neighboring India has already taken significant steps forward in this regard.)

Also, despite the buzz, mobile isn’t the technology paradigm changing the face of the industry—cloud computing is another. To give just one example, National Australia Bank just provided an update on its highly ambitious 10-year technology transformation plan drastically improve the customer and banker experience and avoid obsolescence in the process. The bank has already upgraded its network from eight voice and data networks to one, and will virtualize employee desktops, among many other advances. At the heart of the change is the core banking overhaul, which will enable it to retire more than 100 legacy applications. In December, the bank opened a social media command center with cloud-based technologies that enable the staff to field thousands of comments and service requests every month. This is exactly the kind of ground-level change that forward-thinking banks around the world need to undergo.

In fact, one interesting trend to monitor this year will be changes in the CEO position. It’s a safe bet that those executives who get the ax will get it not because they’re resisting change but because they’re not changing fast enough.

Which brings us back to where we started. If the year just ending was a challenge, the next one will be even more so. From presidential elections and regulatory reform to emerging markets and mobile apps with startling capabilities, we’re all in transition mode. Organizations everywhere can see that there must be a transformation in foundational principles, bedrock strategies and longtime operating practices. It’s scary but exciting, and institutions that can change with the times will find more opportunities and better returns than ever before.

Banking.com is blog is run by Intuit Financial Services, and provides access to insights from industry experts as well as resources for tapping into important customer segments.  Visit their homepage at www.banking2020.com or on Twitter at @bankingdotcom.

In a recent blog on Banking.com, we explored how small businesses don’t always get the respect they deserve from the banking world. There’s no question that this sector of the economy is always vital, and increasingly optimistic. In fact, the number of businesses that report being ‘better off’ jumped from 16 percent in 2009 to 33 percent in 2012. This is also a market rich with possibility: on average, small businesses hold deposits four times greater and loan balances 15 times greater than retail banking customers.

And yet, this market continues to rank near the bottom in banking satisfaction.  So what’s going on—and what can the industry do to make thing better? The new J.D. Power and Associates 2012 US Small Business Banking Satisfaction Study, a comprehensive research report that identifies and highlights the situation described above, digs deeper into the problems and identifies many of the pain points.

As mentioned in the previous blog, credit is still the primary issue, but it’s not the only one.  The J.D Power study lays out more fundamental problems too. In particular, while small businesses are sometimes lumped in with retail banking, there are major differences between the two.

First, small businesses expect greater competence and responsiveness from their bank, since their needs are more complex needs and they bring greater value. Second, relationships are everything: they want an account manager who understands their needs and provides customized solutions. In both these areas, the study shows, banks come up short.

In routine transactions conducted both face-to-face and on the phone, small business customers say their experience either mirrors that of retail customers or doesn’t even rise to that level. By the numbers, 21% of retail banking customers have problems in a given year; 36% of small business customers say the same. Similarly, only 43% of small business customers say their assigned account manager (if they actually have one) ‘completely’ understands their needs. The latter problem is particularly acute: the J.D. Power study outlines the ways in which a good relationship with an understanding account manager makes a significant difference in terms of discussing loan options, receiving regular updates, etc.

The problems extend past business issues to even more basic headaches. The data shows that small business customers are less likely to experience in-person best practices than retail customers when they visit a branch, are less likely to be greeted by name, and are more likely to experience longer wait times.

The study does take into account equivalent concerns on the banks’ side: It’s perhaps unrealistic to expect that every account manager will have a full understanding of every small business account they handle, and it is only natural to assign bank personnel to accounts where they offer the greatest value. However, there’s also no question that there is plenty of room for improvement here.

The study does lay out some remedies. First, while there can (and should) be some discussion around whether to have a dedicated commercial-only window in particular branches, there needs to be more training staff-wide on paying greater attention to small business customers. Second, in the era of Big Data, we have more information at our fingertips now than ever before on each account and the market in general. This should be used more effectively to develop a greater focus on this critical market segment. Finally, while many institutions fully intend to create small business specialists within call center groups—with experienced representatives and specialized training—the final product often falls short. If, as the J.D. Power study makes clear, “a dedicated small business team is established—and the data suggests it should be—it needs to be sourced and managed appropriately.”

Ultimately, of course, any list of best practices runs the risk of being too generic, the same problem that frequently afflicts this market. The small business market is undeniably both vast and fragmented. It’s also vital—and for the banking industry’s purposes, potentially very lucrative.  It deserves respect, and that will come through customized solutions backed with knowledge and dedication.

Banking.com is blog is run by Intuit Financial Services, and provides access to insights from industry experts as well as resources for tapping into important customer segments.  Visit their homepage at www.banking2020.com or on Twitter at @bankingdotcom.

For more information about the J.D. Power and Associates 2012 US Small Business Banking Satisfaction Study, please contact: Holly Zagresky at (248) 680-6319 or via email at Holly_Zagresky@jdpa.com

In the meantime, take a look at the topline findings from the study pilot in the whitepaper titled “Understanding the Impact of Social Media on Companies.”

Download the Whitepaper

What else would you like to see out of this study?