Financial institutions are increasingly (albeit still slowly) jumping on the social media bandwagon. They know they must have a presence on Twitter and Facebook, but they have no way of measuring ROI.
And they still don't know how to best use social media sites to communicate with their clients. But they still need to do it, experts argued at the recent Finextra Social Media Days conference in New York.
"We use social media to drive traffic to events and to our site. The question is, can we deliver meaningful data to our sales team, that is useful?" Alexandra Tyler, VP, branded and social media marketing, CITI GTS, said.
Many banks still forbid their employees from using Facebook, Twitter or any other social media tools.
But for Daniel Marovitz, MD, head of product management, Global Transaction Banking, Deutsche Bank, it is "nonsense" for banks to ban their employees from using these sites.
"They're using them anyway. You should empower employees to tweet what their bank is doing, to talk about a new product launch," he said on a panel on B2B social media.
Deutsche Bank currently has over 500 separate Facebook pages set up by employees, he noted, explaining that these might include a group of Deutsche Bank employees who joined the firm in 2009 and are located in London, UK, and another group set up by those who joined in 2010 in Moscow.
Marovitz argued that it is essential for banks to dive into social media if only to really gauge how their clients view their services and offerings.
He noted that Deutsche Bank executives regularly travel to meet clients and hold dinners for 20 or so people at a time and use these meetings to listen to their clients' views on new products and strategies.
But social media is "an amazing democratizing technology," he said, arguing that it enables the bank to gauge the views of thousands of people at a time, rather than just a handful.
For now, there is no real way of measuring the ROI of a social media strategy, experts at the conference agreed.
"It's not only about hits [to the company website]," Citi's Tyler said. Other measures of success include gauging whether clients are engaging in discussions with the bank's thought leaders. There's also the question of whether banks are actually acting on what their clients say.
The main barrier to social media adoption in the financial community remains fears over compliance, the conference heard.
What if an employee discloses information to the public that the bank would like to keep private, or if someone dispenses advice without being authorized to do so?
Only four countries worldwide - the U.S., the UK, Canada and India -- have released compliance guidelines on the use of social media.
Still, for Marovitz, firms' compliance fears are often not justified. Banks don't need specific social media policies, he says. Both financial institutions and their employees just need to use their common sense.
"You should just have a broad-based policy on how to communicate," Marovitz said. And there's no reason to think your employees will go rogue if you allow them to officially join a Facebook page or have a Twitter feed.
There are plenty of other avenues potentially rogue employees can take to share information they're not supposed to.
"Banks lock down social media sites, but they have faxes and printers. If you want to, you can meet someone at Starbucks and hand over information you have printed to them," Marovitz said.
"So the theater of control [that banks exert over their employees] is ridiculous," he added.