The financial services industry has a love-hate relationship with social media. They like how accountholders can communicate directly with financial institutions but fear how startups use it to threaten traditional relationships.
Almost two-thirds of American adults use social networking sites per the Pew Research Center. Plus, there are almost 1.9 billion active Facebook users and five billion views YouTube daily. Worrisome for financial institutions is an Accenture survey that revealed nearly one-third of its respondents would switch to Google, Amazon or Facebook for banking, if they could.
However, disintermediation presents a greater threat, according to Larry Pruss, SVP Memphis, Tenn.-based Strategic Resource Management, which helps credit unions maximize bottom-line performance.
Pruss explained a credit union core function is serving as intermediary for borrowers and lenders. However, social media platforms get in between, which could hurt revenue streams, brand, and data.
Some nontraditional providers also serve unique verticals and segments previously underserved by traditional financial services, Pruss maintained.
So how are credit unions adapting to social media?
John F. Kilduff, corporate affairs officer at $545 million Chambersburg, Penn.-based Patriot Federal Credit Union, a client of Fiserv for core, and Raddon, a Fiserv company, for research and analytics, said, discussed the importance of engaging members who are increasingly active on social media. This led to Patriot’s launch of a social media initiative last fall.
Kilduff asserted, “You can’t simply ignore social media and have the mindset that if we don’t have a Facebook page or a Twitter channel that your credit union is not in social media. It is, whether you like it or not. You have to address it, manage it, and make it work for you. “
Another Fiserv core client, the $1.04 billion St. Paul, Minn.-based Hiway Federal Credit Union also engages members through social media.
“Social media is the quickest and most accessible way to engage with a company, which is why we felt the need and desire to be a part of this space,” Deb Cariveau-Rogers, marketing manager at Hiway said.
A new partnership between the New York Credit Union Association and Monett, Mo.-based MEA Financial Enterprises, for example, will help New York’s credit unions secure a two-way texting tool that enhances member interaction.
Seattle-based CU Texting, a vendor sourcing consulting firm with two-way SMS core competency, works with credit unions seeking to bring their landline and toll-free number into the texting medium.
Another groundbreaking technology is natural language understanding. Montreal, Canada-based North Side developed VerbalAccess, which enables conversational access – through text or typing or by speaking in plain English – to a financial institution’s APIs.
“We extract the information needed to do a transaction or a query. You don’t click anymore, you don’t type anymore, you converse, you speak normally,” Eugene Joseph, CEO of North Side, explained.
Read more about the social media influence on credit unions in the May 3, 2017 print issue of CU Times.
