Why Online Reputation Management is Critical for Banks and Financial Institutions

In this age of social media where consumers’ opinions have the power to make or break businesses, Online Reputation Management or ORM is very critical for business organisations and their brands.

A negative post or a tweet by a dissatisfied customer, when gone viral, can derail any organisation’s online reputation. The same holds true for the BFSIs too, only that the damages incurred here due to poor ORM are much more than any other industries. Here, the loss of even a few customers means a loss of hundreds of financial accounts.

It is for this reason that organisations in the BFSI industry are making streamlined efforts to build a strong presence on the social media and striving harder to maintain that reputation. Aligning a fool proof online reputation management strategy along with their social media and marketing policies is imperative for BFSIs.

Effects of Bad ORM in BFSIs:

A report in the Huffingtonpost.com about an annual Reputation Management survey conducted by Harris Interactive found that financial institutions like Bank of America, Goldman Sachs and JP Morgan Chase experienced a very bad Reputation Quotient. The study points out that Bank of America’s dismal performance was due to the excessive negative publicity that it garnered for charging customers $5 for debit card usage (the plan was later dropped), alleged foreclosure abuse and inaccurate mortgage practices.

However, Harris Interactive’s Reputation Quotient study 2013 indicates that, though there has been a marginal increase in the performance of individual financial institutions, the overall standing of the banking and financial industry shows 54% and 51% negative reputation respectively.

Jorge Yui, in his research paper on Social Media and Reputation Management in the Financial Services Sector has mentioned some parts of the Financial Service Consumer Experience Survey, 2010. 18% of respondents to a question said that they used social media to express frustration with their personal bank experiences and 17% used it to aid their decisions about purchasing the products and services of the bank.

Measures BFSIs must take:

In order to achieve good ORM, banks and financial institutions must harness the power of Big Data competent Social media Analytics (SMA) tools to closely monitor, analyze and understand the needs, likes and problems of their customers.

Relying on SMAs allows BFSIs to anticipate and even prevent ORM crisis in real time.

So, do you agree with me? Comment with your thoughts or mail to info@shoutanalytics.com